SIOUX FALLS, S.D. (AP) -- Poet LLC, the nation's top ethanol producer, says it is has reduced its cellulosic ethanol production cost during the past year from $4.13 per gallon to $2.35 per gallon.

The Sioux Falls-based company plans to produce 25 million gallons of ethanol each year from plant waste typically left behind in farmers' fields at its corn ethanol plant in Emmetsburg, Iowa.

A pilot-scale plant in Scotland, S.D., has produced about 20,000 gallons of cellulosic ethanol since it began operations a year ago Wednesday.

Privately held Poet says it has reached the cost savings by reducing energy usage, enzyme costs, raw material requirements and capital expenses.

Copyright 2009 The AP.