Poet Grabs $14M from Iowa for Cellulosic Ethanol

The Iowa Power Fund, which doles out millions of dollars for clean power projects, has just made a $14.75 million commitment to help corn-ethanol maker Poet build its first commercial-scale cellulosic ethanol plant in the state. Add that to the $5.25 million from the Iowa Department of Economic Development, and the state has now pledged $20 million to help Poet build its cellulosic plant.

When fully completed the Emmetsburg, Iowa, plant (dubbed Project Liberty) will produce 125 million gallons per year of ethanol, of which 25 million gallons will be made from corn waste. The plant will need a total capital investment of more than $200 million, Poet says, and it will create at least 35 new jobs. Poet also says that the technology used for Project Liberty could be added onto its six other ethanol plants in Iowa, as well any biorefinery in the state — if that were the case the investment needed would total $2 billion and create 2,700 new jobs in Iowa.

Project Liberty, which will start construction in 2009 and will be operational by 2011, is an important milestone for the biofuel industry. As one of the established corn-based ethanol producers, Poet has decided to start producing cellulosic ethanol in a measured approach, by using corn fibers and cobs (corn waste) taken from conjoined traditional corn ethanol plants. Compared to companies building cellulosic ethanol plants from the ground up and having to secure feedstocks, Poet’s approach could be more economical, less risky and quicker to production.

Poet is moving relatively quickly for a large, older company — it already plans to start churning out cellulosic ethanol at a $4 million pilot-scale cellulosic ethanol facility in Scotland, S.D., which is supposed to be completed and operational within 2008.

Perhaps the biggest questions are, What are the details of how Poet will convert its corn waste into fuel? Is the process itself economical or advanced, and can its IP compete against pure cellulosic firms that have been cropping up? Some form of cellulosic ethanol will eventually replace corn ethanol, so Poet’s future will depend on the answer to these questions.

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