WASHINGTON -- General Motors Corp. said Thursday it has taken an ownership stake in a renewable energy company that is working to develop ethanol from wood chips, waste paper sludge and switch grass.

It is the automaker's second partnership with a startup this year that is attempting to create an alternative fuel from something other than corn.

The extent of GM's investment and ownership stake in the companies has not been disclosed.

Mascoma Corp., based in Boston, is developing a single-step method of breaking down plant matter for fuel, hoping to reduce the cost.

GM said the new collaboration will further develop non-grain forms of ethanol for flexible-fuel vehicles, which run on a mix of gasoline and ethanol.

"It's absolutely critical to our future," said GM President and Chief Operating Officer Fritz Henderson. He said ethanol was the "only near-term solution" to reduce the use of petroleum during the next five-to-10 years.

Lawmakers have touted the development of biofuels, including ethanol from corn and cellulosic feedstock such as switch grass and wood chips, as a substitute for gasoline. President Bush signed energy legislation last year that requires a major increase in ethanol use as a fuel to 36 billion gallons a year by 2022.

The Detroit-based automaker has said it intends to double its annual production of flexible-fuel vehicles to 800,000 by 2010 and make half of its annual vehicles capable of running on E85 ethanol by 2012. The fuel is a blend of 85 percent ethanol and 15 percent gasoline.

GM and other automakers such as Ford Motor Co. and Chrysler LLC have pushed flexible-fuel vehicles as an alternative in the face of rising gasoline prices and tougher fuel efficiency standards.

GM announced a partnership with Illinois-based Coskata Inc. at the North American International Auto Show in Detroit in January, a renewable energy company that plans to produce ethanol from agricultural leftovers and municipal and industrial waste.

Mascoma executives said they hope to mass-produce ethanol for about $1 to $1.50 a gallon and begin producing millions of gallons of the fuel around 2010. But Bruce Jamerson, Mascoma's chairman and chief executive, said the company's approach "can be economic at relatively small volumes."

Mascoma, which was founded by two Dartmouth College professors in 2005, has a research facility in Lebanon, N.H., and announced plans last year to build a cellulosic ethanol biorefinery in Michigan. The company also is building a demonstration plant in Rome, N.Y., and a pilot biofuel refinery near Knoxville, Tenn., in a partnership with the University of Tennessee.