POET is apparently making progress on bringing down the cost of producing ethanol from corn cobs.

POET – the nation's largest ethanol producer -- has been making ethanol from corn cobs at its 20 million gallon/year pilot plant at Scotland, S.D. The company, which is headquarfered in Sioux Falls, plans to start up a 25 million gallons commercial plant at Emmetsburg, Iowa, next year.

POET says it current costs them $2.35 per gallon to make ethanol from corn cobs – that's down from $4.13 just a year ago.

The company has gotten the price down to $2.35 per gallon today. It hopes to have the cost down under $2 when it starts the commercial plant.

The industry average for producing ethanol from corn kernels is $1.50 to $1.70 per gallon.

"POET has been working on cellulosic ethanol for close to a decade and there were some days that I wasn't sure we'd be successful," said Jeff Broin, POET CEO, in a statement issued by the company. "While we still have some challenges ahead, I can say unequivocally that Project LIBERTY will be commercially viable by the time we start up the plant."

Broin pointed to several areas of progress in the production process that helped them achieve the overall cost reduction, including:

Chemical raw materials required in the process have been reduced, resulting in an operating cost savings of $0.20 per gallon.

The energy used in the pretreatment process has been reduced by more than half.

Alternative energy technology has been demonstrated to provide all of the energy for the cellulosic ethanol plant and at least 80 percent of the adjacent corn-based plant.

Enzyme cost has been cut in half and is expected to decline by start-up of Emmetsburg plant.

Through continuous optimization of the process, entire unit operations have been eliminated, reducing overall capital cost by over 40%.

Mark Stowers, said in a statement that there are some promising areas for future cost reductions in the cellulosic production process.

"There are still several opportunities to make the process more efficient, particularly in fermentation," said Mark Stowers, senior vice president of science and technology for POET, "Additionally our enzyme partners have committed to significant additional cost reductions. But significant gains can also be made once we start up the commercial facility and POET uses its 20+ year history in biorefining to drive cost reductions and efficiency improvements in the process."

POET's pilot-scale plant is in Scotland, S.D. and has produced approximately 20,000 gallons of cellulosic ethanol since it started producing on November 18, 2008. To see a documentary about POET's pilot cellulosic ethanol plant visit www.poet.com/cellulosedocumentary.htm

For more information, visit http://www.poet.com or http://www.projectliberty.com.