Cellulosic ethanol is taking another step in its slow march toward commercialization.

Poet of Sioux Falls, the nation's top ethanol producer, is opening the spigots on an $8-million pilot-scale biorefinery at its Scotland research center. It will produce 20,000 gallons of fuel each year from the corn cobs and fiber normally left behind in fields.

Poet's demo plant is a precursor to a larger $200 million commercial-scale bio-refinery scheduled to open in Emmetsburg, Iowa, in 2011.

Poet is one of several companies backed by hundreds of millions of dollars in U.S. Department of Energy grants aimed at jump-starting the evolution to fuels made from such non-corn feedstocks as switchgrass, wheat straw and wood chips.

Poet has been making ethanol from corn for more than 20 years, but Chief Executive Jeff Broin says that adding cobs into the mix will increase the ethanol yield of each corn bushel by 11 percent and the per-acre yield by 27 percent.