The production of cellulosic ethanol is on the rise in Iowa, New York and South Dakota according to the Department of Energy.

The DOE says that while 2009 is starting out as a difficult year for the ethanol fuel industry, so far it's been a landmark year for cellulosic ethanol.

Produced from non-food plants and agricultural residues, cellulosic ethanol is expected to yield significant benefits in terms of energy savings and greenhouse gas emissions. So far this year, Poet and Mascoma Corporation have started up pilot plants in South Dakota and New York, while Poet is already planning ahead for its construction of a commercial facility in Iowa.

In January, Poet started producing cellulosic ethanol at its research center in Scotland, South Dakota. The company can convert corn cobs into about 20,000 gallons per year of cellulosic ethanol at the $8 million facility, and the company claims to have validated its processes while producing the first 1,000 gallons of fuel at the pilot plant. The company is now looking forward to the development of a $200 million commercial facility in Emmetsburg, Iowa, that will the capacity to produce 25 million gallons per year of cellulosic ethanol from corn fiber and corn cobs.

The facility is being jointly funded by Poet, DOE, and the State of Iowa, and the company recently gained $14.75 million in funding from the Iowa Power Fund Board. It will be located at the site of an existing corn ethanol facility, and by adding cellulosic ethanol production, Poet will be able to produce 27% more ethanol from an acre of corn, while reducing fossil fuel consumption and water use. The com pany expects to begin production next year and plans to eventually add cellulosic ethanol production to its six other facilities in Iowa.

In late February, Mascoma Corporation began cellulosic ethanol production at its pilot facility in Rome, New York. The pilot plant is capable of producing 200,000 gallons of cellulosic ethanol per year from a variety of biomass sources, including wood chips, grasses, and corn and sugar cane residues.

The plant was funding in part by grants from the State of New York, and construction of the plant proceeded throughout most of 2008. Mascoma's affiliate, Frontier Renewable Resources, is developing a commercial-scale facility in Kinross, Michigan.