If your core business is making corn ethanol, you’ve got to evolve. Companies producing ethanol made from corn are canceling plant plans and struggling to stay afloat. Poet is one of the larger corn ethanol makers, and it has been trying its hand at producing next-generation cellulosic ethanol; the company said yesterday it has made the leap into pilot production — 20,000 gallons per year — at an $8 million facility in Scotland, S.D.
Poet says it started up the pilot facility, which is located next to a 9-million-gallon-per-year cornethanol production facility, before the end of 2008. The cellulosic run is a test for a much larger $200 million commercial scale plant named Project Liberty that will produce 125 million gallons of ethanol per year, with just 25 million of that being cellulosic ethanol, in Emmetsburg, Iowa. Liberty is supposed to start construction this year and is projected to be in operation in 2011.
While Poet is one of the larger ethanol makers to focus on next-generation cellulosic ethanol, it’s still moving in little by little. It’s building its cellulosic plants as one part of much larger corn ethanol plants. That approach can minimize risk, and cut costs by using the waste from corn ethanol for cellulosic ethanol. But it is also less aggressive and slower-moving than some of the startup competitors, like Range Fuels and Coskata, which are racing to get to larger scale production this year and in 2010.
We’re not sure how innovative or efficient Poet’s cellulosic ethanol conversion process is, either. The company says it spent $20 million on research in 2008, but Poet’s CEO Jeff Broin would only tell us back in September that the company is “pursuing enzymatic conversion for cellulosic material.” Broin did say, though, that Poet’s intention is to “develop our own IP around the process so that it can be licensed to other ethanol producers.” We’ll see if the company ends up keeping Project Liberty on that proposed timeline given the economy. But then again, corn ethanol isn’t exactly a bright spot, so it’s got to evolve somehow.