Range Fuels, one of the more successful biofuel startups backed by Khosla Ventures, announced today that it has opened up its first commercial plant to make cellulosic methanol out of non-food feedstocks. Located in Georgia, the facility is expected to pump out 20 million gallons of ethanol and biodiesel every year.

The company’s plan is to use wood waste generated by timber plants located around the Soperton, Ga. site (pictured above). It will convert that waste into synthetic gas using heat and pressure, which is fed into a proprietary catalytic process to produce alcohol-based compounds. The end product can be used for vehicles and jets with existing gas tanks.

This has been Range’s goal for a while. It initially said that the plant would be up and running in 2008, then 2009. Now, finally, it has come to fruition two years after the fact — mostly due to the limping economy and the Environmental Protection Agency’s decision to cut back support for cellulosic fuels.

Still, Range has been able to succeed over a number of venture-backed biofuel operations with generous private funding — more than $100 million in venture capital — as well as an $80 million loan guarantee from the U.S. Department of Agriculture. This has set it on track to be one of the first companies of its kind to commercially scale.

Range’s roadmap has the company producing methanol for biodiesel first, followed up by cellulosic ethanol later in the year. Next year, it hopes to expand the plant’s capacity to 60 million gallons a year, eventually hitting a full capacity of 100 million gallons. The challenge now will be to stick to that time frame.

Based in Broomfield, Colo., Range is also backed by Pequot Capital, Pacific Corporate Group and Morgan Stanley, in addition to Khosla Ventures — which has been one of the most bullish Silicon Valley firms in biofuels, also investing in LS9 and Amyris Biotechnologies.