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<p>Commonly referred to simply as alcohol or spirits, ethanol is also called ethyl alcohol, and drinking alcohol.</p>

Liquid biofuels for transport have to a certain extent been in use for a very long time. In recent years however, they are enjoying renewed interest in both developed and developing countries as a result of the need to curb rising emissions from the transport sector, reduce dependence on increasingly expensive fossil oil imports and increase farm incomes. An important advantage of biofuels is that they can easily be integrated into the existing transport infrastructure, thus avoiding the significant investment costs associated with other renewable options for the transport sector.

Depending on the feedstock and conversion route, we can distinguish 1st and 2nd generation bioethanol (lately, even 3rd generation options are starting to emerge). 1st generation bioethanol, also known as carbohydrate ethanol, can be produced from sugar or starch based crops. When replacing gasoline in transport, it can lead to substantial reduction in CO2 emission. The main countries producing 1st generation bioethanol are the US and Brazil.


1st generation bioethanol, also known as carbohydrate ethanol, can be produced from sugar or starch based crops. Bioethanol is mostly used in transport applications. It is mixed with gasoline in proportions varying from 5 to 85%. The lower blends are compatible with conventional gasoline engines. Blends above 10% ethanol content are only suitable for use in modified engines. The least complicated way to produce ethanol is to use biomass that contains so-called six-carbon sugars that can be fermented directly to ethanol. If producing ethanol from starch based crops another processing step is required. The two conversion routes are described below:

Ethanol produced from sugars

This conversion route starts by grinding up the feedstock to extract the sugar, which is then added to yeast for the fermentation process. In a closed anaerobic chamber, the yeast secretes enzymes that digest the sugar, yielding several products, including lactic acid, hydrogen, carbon dioxide and ethanol (WWI, 2007). The most common feedstocks include sugarcane, sugar beet, sweet sorghum and other plants containing a large proportion of simple sugars.

Ethanol produced from starches

Producing ethanol from starch-based crops requires another step in the process called saccharification, which entails breaking the large starch molecules into simpler sugars. There are two main methods for refining starches into sugars, primarily differing in the pre-treatment of feedstock. In the “wet milling” process the grains are soaked in water, usually with a sulphurous acid, to separate the starch-rich endosperm from the high-protein germ and high-fiber husks. In addition to ethanol, the process results in a number of high-value co-products, such as grain oil, gluten feed, germ meal, starches, dextrin and sweeteners. (WWI, 2006)

The simpler “dry milling process” entails grinding the unprocessed heterogeneous seed into granules. Compared to wet mills, dry mills are less capital intensive and produce fewer co-products; however a very important co-product is the dried distillers grains with solubles (DDGS), a high quality, nutritious livestock feed. “Both wet and dry mills also sometimes sell the CO2 released during fermentation to the carbonating soft beverage industry” (WWI, 2006).

Feasibility of technology and operational necessities

Biophysical conditions

Production of bioethanol depends mainly on sufficient provision of economical biomass used as feedstock. The production of 1st generation bioethanol (as well as the production of most other biofuels) is limited by the availability of suitable land and water resources and crop yields.

Currently, some 1.6 billion hectares of land area are used as cropland (Fischer, 2008). After excluding forest land, protected areas and land needed to meet increased demand for food crops and livestock, estimates of the amount of land potentially available for expanded crop production lie between 250 and 800 million hectares, most of which is found in tropical Latin America or in Africa (Fischer, 2008). The other source of increased feedstock supply is the increase of yields: intensification of land use through improved technologies and management practices. In most African countries yields are only a fraction of their potential and significant improvement can also be achieved in Asia and most parts of Latin America (even in Brazil, where sugar cane yields are already among the highest in the world) (FAO, 2008). However, yield improvements require significant investment into fertilizers, mechanization and training of farmers to improve agricultural practices.

Logistical conditions

The production of bioethanol involves moving and storing large amount of feedstock. Therefore a bioethanol production plant should be located close to the source of feedstock (fields of the crop used for bioethanol production) or in (or very close to) a logistical hub, such as a harbor, if the biomass needs to be imported.

IEA Bioenergy (2009) sums up the critical issues in biomass logistics as:

  • “The specific properties of biomass: low energy density, often requiring drying and densification; seasonal availability and problematic storage requiring further pre-treatment.
  • Factors limiting the supply: availability and appropriateness of mechanized equipment; and inadequate infrastructure to access conversion facilities and markets.”

The main solutions to these issues, according to the IEA Bioenergy (2009) are “the development of advanced densification and other pre-treatment technologies, diversifying procurement geographically and in terms of biomass types, and the optimisation of fuel supply chains from field to plant gate (including the development of specialized harvesting and handling equipment), leading to lowest delivered costs” (IEA Bioenergy, 2009).

Status of the technology and its future market potential

Status of the technology

Production of ethanol through biological fermentation of sugars extracted from sugar and starch crops is a technically mature and commercially available process. However, a number of technical improvements can still be made to several steps of commercial ethanol production routes, e.g. “improved enzymes to convert starch to sugars (hydrolysis), improved bacteria (fermentation), water separation methods, process and plant optimisation, and greater value-added co-products, e.g. development of biorefineries” (IEA Bioenergy, 2009).

Market penetration in different regions / countries and future market potential

Ethanol is mostly used in low to medium blends (5% to 20% blend with gasoline, also referred to as E5 or E20). Higher blends are also available, however they require dedicated or adapted vehicles. Biofuels are generally not yet competitive with fossil fuels, therefore many governments around the world offer special incentives for non-fossil based fuels, or have set obligations to bring biofuels, including bioethanol, to the market. In Brazil, the successful Proalcool ethanol program and the introduction of flex-fuel vehicles, which can run both on ethanol and gasoline, eventually resulted in 2008 bioethanol contributing some 50% of fuel consumption in the gasoline market from sugar-cane ethanol (Pelkmans et al., 2009). In Colombia, as of 2006, there is a mandate the use of 10% ethanol in all gasoline sold in cities with population over 500 000. In Venezuela, the state oil company is supporting the construction of 15 sugar cane distilleries as the government phases in a national 10% blending mandate. In Bolivia, 15 distilleries are being constructed and the government is considering authorizing blends of E25. Costa Rica and Guatemala are also in the trial stages for expanding production of sugar cane ethanol. Argentina, Mexico, Paraguay and Peru are all considering new biofuel programmes as well. In Asia, Thailand has mandated a 10% ethanol mix in gasoline as of 2007, while the Philippines introduced a similar mandate to 5% blend. In India, the sugar industry has been calling for E5 blends which the government means to increase to E10 and eventually E20. In China, the government has made E10 blends mandatory in five provinces. In Africa, efforts to expand production and use of ethanol are under way in several countries (WWI, 2007).

Despite the wide spread interest in bioethanol, production is still highly concentrated. Global production of ethanol as fuel was around 84.6 billion litres (22,36 billion gallons) in 2011. Of that amount, about 87% was produced in Brazil and the United States alone (Renewables Fuels Association, 2012).

How the technology could contribute to socio-economic development and environmental protection

Bioenergy, of which bioethanol is only one form, can represent great promise or a great threat at the same time. If developed sustainably, it offers a number of benefits to the environmental, social and economic circumstances of a producing country, including:

  • Social development opportunities:
  • Job creation in the agriculture and forestry sectors, which is particularly relevant for developing countries with significant unused land resources and a large pool of unskilled workers;
  • Job creation in the industrial sector (e.g. a 125 million liter ethanol plant would employ cca 270 people (Gnansounou et al., 2005);
  • Increasing farm incomes: provided the additional income is distributed equitably, increasing the income in the primary sector, which employs the majority of the workforce, can support rural development and significantly improve living standards;
  • Increasing inclusion in the economic system: well-organized farmers unions can gain access to energy markets.
  • Economic development:
  • Increasing energy security by producing and using biofuels locally, thus reducing the dependence on imported fossil oil;
  • Saving foreign currency by displacing fossil oil imports;
  • Earning foreign currency by producing biofuels for export.
  • Diversifying the industrial sector.
  • Environmental benefits
  • GHG savings: most biofuels offer a net GHG savings compared to fossil fuels, unless land area containing high carbon stocks (eg. rainforest, peatland) is cleared to make way for biofuel feedstock plantations. Figure 4 shows estimated GHG reduction benefits of bioethanol according to the IEA (2004).

The above mentioned benefits will materialize only within a comprehensive adequate policy framework. In absence of a clear and consistently enforced set of policies promoting sustainable production of feedstock and the equitable distribution of proceeds from biofuel sales along the whole supply chain, increased development of biofuels can lead to the following problems:
  • Direct and indirect land use change causing deforestation, loss of biodiversity and conflict with food production;
  • Land grabbing and displacement of rural communities;
  • Concentration of production and income by a small number of large farmers and agribusinesses;
  • Loss of livelihood by poor rural communities;
  • Increased GHG emissions from land clearing and unsustainable farming practices

Financial requirements and costs

Depending on the feedstock used and scale of the plant, production costs can differ significantly. Because of lower average costs, larger plants (of capacity greater than 200 million liters per year) have dominated among new installation. In Brazil, ethanol can be produced from sugar-cane at less than US$0.31/l, whereas the production cost of ethanol from corn in the USA is approximately US$0.75/l and that from wheat in the UK is about US$0.87/l (IEA Bioenergy, 2009).

Feedstock costs represent the highest share of production costs for 1st generation bioethanol. In Brazil, sugar-case accounts for approximately half of the cost of sugar-cane ethanol production (IEA Bioenergy, 2009), while in China, it was found that the cost of supplying required corn feedstock represents about 72% of the production cost of ethanol (Gnansounou et al., 2005). Figure 5 shows indicative production costs of 1st generation bioethanol based on exemplary project specifications. Figure 6 gives a range of costs for ethanol and gasoline production.


  • E4tech (2008). Internal analysis, [[1]].
  • E4tech (2009). Internal analysis, [[2]].
  • FAO (2008). The State of Food and Agriculture 2008 – Biofuels: prospects, risks and opportunities. Available at [[3]]
  • Fischer, G. (2008). Implications for land use change, Paper presented at the Expert Meeting on Global Perspectives on Fuel and Food Security, 18–20 February 2008. Rome, FAO.
  • F.O. LICHTS (2008). The global ethanol market continues to expand at a rapid race, F.O. Licht’s World Ethanol & Biofuels Report, 8 May 2008
  • Gnansounou, E., Bedniaguine, D. and Dauriat, A. (2005). Promoting Bioethanol Production through Clean development Mechanism: Findings and lessons learnt from the ASIATIC project, Swiss federal Institute of technology, Lausanne (EPFL) and ENERS Energy Concept, Lausanne, Switzerlands
  • IEA (2004). Biofuels for Transport: an International Perspective, IEA/OECD, Paris, France. Available at [[4]]
  • IEA Bioenergy (2009). Bioenergy – a Sustainable and reliable Energy Source, available online on [[5]]
  • Pelkmans, L., Govaerts, L. and Kessels, K. (2009). Inventory of Biofuel Policy measures and their Impact on the Market, Report of ELOBIO subtask 2.1-2.2, available online on [[6]]
  • Renewable Fuels Association (2012). Acelerating Industry Innovation – 2012 Ethanol Industry Outlook. Renewable Fuels Association. pp. 3, 8, 10 22 and 23.
  • Walter, A., Rosillo-Calle, F., Dolzan, P., Piacente, E. and Borges da Cunha, K. (2007). Market evaluation: Fuel ethanol. Deliverable 8 for IEA Bioenergy Task 40. January 2007, p.75.
  • World Watch Institute (2006): Biofuels for Transport, Global Potentials and Implications for Sustainable Energy and Agriculture, prepared by Worldwatch Institute for the German Ministry of Food, Agriculture and Consumer protection (BMELV) in coordination with the German Agency for Technical Cooperation (GTZ) and the German Agency of Renewable Resources (FNR), published by Earthscan, London


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