EMMETSBURG, Iowa — A new joint venture between POET, LLC and Dutch partner Royal DSM will create the nation’s first commercial-scale cellulosic plant, located in Emmetsburg, Iowa, to exclusively use corn stalks instead of kernels to produce ethanol.

“This groundbreaking today is a great example of a project that leverages Iowa’s unique strength in agriculture and renewable fuels production to create another new product for the renewable energy marketplace,” said Gov. Terry Branstad at the March 13 groundbreaking ceremony with company executives and other state officials.

“Iowa’s biofuels industries have added $6 billion to Iowa’s economy, generated $3.7 billion in household income, and created and supported 82,000 Iowa jobs,” he added. “The regional economic benefits of this project are significant. This is a facility that will require highly-skilled workers and create high-paying jobs.”

According to POET officials, the EPA estimates that approximately 400 new biorefineries must be built by 2022 in order to produce the 16 billion gallons of cellulosic biofuel required under its new renewable energy regulations. Although the original annual capacity of the Palo Alto County corn stover-fed plant was set at 20 MMgy, Jeff Broin, POET-DSM CEO, said that’s expected to be increased to 25 MMgy “as soon as possible.”

“We have the raw material to make it happen,” he said in a Jan. 23 teleconference with reporters. “There’s more than one billion tons of biomass available every year in the U.S. that could be used to produce enough cellulosic ethanol to replace a third of America’s gasoline.”

In what will be named POET-DSM Advanced Biofuels, LLC, the new Emmetsburg facility – scheduled to open and go online in 2013 – will use an estimated 770 dry tons per day of corn cobs, leaves, husk and some stalk from its already-completed 22-acre stackyard to produce 25 million gallons of ethanol per year during full-scale operations.

Over the past five years, the company has been participating in harvest trials of stover near Emmetsburg. As part of the 2011 harvest, nearly 100 farmers around Emmetsburg baled approximately 61,000 bone-dry tons of corn crop residue, which represented 15 new contracts and an additional 5,000 tons above last year’s total.

Headquartered in Sioux Falls, S.D., POET’s new Iowa plant plans to produce 285,000 tons of biomass per year for its Project LIBERTY, a program that gave many of the farmers an incentive to start harvesting cellulosic feedstock last fall.

In fact, Jim Sturdevant, Project LIBERTY director, said the goal of these early harvests is to streamline the process for harvest, storage and delivery of biomass to Project LIBERTY.

He said about 300-400 bales will be part of ongoing biomass storage research, and up to 1,500 bales could be used for additional research. Some of the biomass will go to POET’s pilot cellulosic ethanol plant in Scotland, S.D. and some will go to other uses.

“Research is paramount to what we’re doing in Emmetsburg,” Sturdevant said. “Not only do we have to keep a consistent flow of biomass to the facility, we need to ensure that farmers know how to harvest in a manner that maintains soil health.”

Under the joint venture agreement, which was inked in January, both POET and Heerlen, Netherlands-based DSM will own 50 percent of the company, an initial capital investment of $250 million, in which the company will be able to decline a $105 million loan guarantee the U.S. Department of Energy offered last September.

“This joint venture brings together two companies leading the transition from a fossil-based economy to a bio-based economy,” Broin said.

“The partnership has set an ambitious goal: to make cellulosic bio-ethanol competitive with corn ethanol, which is the most competitive liquid transportation fuel on the market today. We believe that the joint venture positions us well to meet our ambitious cellulosic ethanol production goals.”

Stephan Tanda, Royal DSM managing board member, said DSM is “a living example of the transformation from a petroleum-based economy to a bio-based economy.” “By joining forces with innovative growers and entrepreneurs right here in Iowa, we all together are pioneering new value chains that produce fuel, and eventually also chemicals and advanced materials from sustainable, renewable resources,” he said.

Jeff Lautt, POET president, said POET has been a leader in growing the corn ethanol industry to about 10 percent of America’s automobile fuel supply.

In addition, an estimated 1 billion gallons of cellulosic ethanol could be produced annually at its 27 U.S. plants “if the technology is deployed at all of them,” Broin said. “I think you’ll see a pretty quick build-out of the cellulosic industry once it’s proven,” he said. “I think the dollars will be available, and I think this product will be very important to our country becoming more independent from foreign sources of oil.”

Broin said DSM and POET expect the joint venture to be profitable in 2014.