A. PROCESS BACKGROUND A2. PRODUCT MARKET SURVEY A2.1 INTRODUCTION The principle fuel used as a petroleum substitute is bioethanol.

Bioethanol is mainly produced by the sugar fermentation process, although it can also be produced by the chemical process of reacting ethylene with steam. The main source of sugar required to produce ethanol comes from fuel or energy crops. These fuel crops are normally grown specifically for energy use and include maize, corn and wheat crops, waste straw, willow, sawdust, reed canary grass, cord grasses, Jerusalem artichoke, myscanthus and sorghum plants. There is also ongoing research and development into the use of municipal solid wastes to produce ethanol fuel. Starch content of Biomass feedstocks like corn, potatoes, beets, sugarcane, wheat, barley, and similar can be converted by fermentation process into alcohol (ethanol). Fermentation is the biochemical process that converts sugars into ethanol (alcohol). In contrast to biogas production, fermentation takes place in the presence of air and is, therefore, a process of aerobic digestion. Ethanol producers use specific types of enzymes to convert starch crops such as corn, wheat and barley to fermentable sugars. Some crops, such as sugar cane and sugar beets, naturally contain fermentable sugars. Ethanol may also be used as a hydrogen source for fuel cells. Because ethanol is easier to transport and store than hydrogen, fuel reforming (using a chemical process to extract hydrogen from fuel) may be a practical way to provide hydrogen to fuel cells in vehicles or for remote stationary applications. Latin America, dominated by Brazil, is the worlds largest production region of bioethanol. Alcohol fuels have also been aggressively pursued in a number of African countries currently producing sugar - Kenya, Malawi, South Africa and Zimbabwe. Others with great potential include Mauritius, Swaziland and Zambia. In developing countries interest in alcohol fuels has been mainly due to low sugar prices in the international market, and also for strategic reasons. In the industrialized countries, a major reason is increasing environmental concern, and also the possibility of

solving some wider socioeconomic problems, such as agricultural land use and food surpluses. As the value of bioethanol is increasingly being recognized, more and more policies to support development and implementation of ethanol as a fuel are being introduced.

A2.4 BIOETHANOL PRODUCTION Bioethanol is produced by fermentation of sugars followed by distillation to produce pure alcohol. The basic steps for large scale production of ethanol are: fermentation of sugars, distillation, dehydration and denaturing (optional). Prior to fermentation, some crops require saccharification or hydrolysis of carbohydrates such as cellulose and starch into sugars. Saccharification of cellulose is called cellulolysis. Enzymes are used to convert starch into sugar. Ethanol is produced by microbial fermentation of the sugar. Microbial fermentation will currently only work directly with sugars. Two major components of plants, starch and cellulose, are both made up of sugars, and can in principle be converted to sugars for fermentation. Currently, only the sugar and starch portions can be economically converted. However, there is much activity in the area of cellulosic ethanol, where the cellulose part of a plant is broken down to sugars and subsequently converted to ethanol. For the ethanol to be usable as a fuel, water must be removed. Most of the water is removed by distillation. The purity is limited to 95-96% due to the formation of a low-boiling water-ethanol azeotrope. This may be used as fuel alone but unlike the anhydrous ethanol it is immiscible in Petrol meaning it cannot be mixed. The water fraction is typically removed in further treatment in order to burn with in combination with petrol in petrol engines. Currently, the most widely used purification method is a physical absorption process using a molecular sieve. Another method, azeotropic distillation, is achieved by adding the hydrocarbon benzene which also denatures the ethanol, to render it undrinkable for duty purposes. A third method involves use of calcium oxide as a desiccant. There are two biochemical production routes for bioethanol: 1. First Generation Technologies (Starch Ethanol)

It utilizing crops rich in starch (e.g.: corn, grain, sugar cane, etc.). Starch is a glucosecontaining polymer which can readily be hydrolysed by industrially produced enzymes and fermented by yeast. This is a well-known process and is presently used for production of bioethanol in many parts of the world, especially in the USA and Brazil. However, the feedstock costs are high and still rising due to rising demand for both food and fuel, limited area of cultivation and bad harvests. The ethical question of using food for fuel has become more and more relevant and thus the sustainability of first generation bioethanol production is questioned. 2. Second Generation Technologies (Lignocellulosic Ethanol) Second generation technologies utilizing lignocellulosic biomass (e.g.: wood, bagasse, straw, stover, etc.). Lignocellulose is a complex molecule consisting of cellulose, hemicellulose and lignin. The complexity of the lignocellulosic biomass makes it difficult to utilize lignocellulose compared to starchy biomass. This difficulty is overcome by introducing an additional step to the production strategy: pre-treatment. Most often the pre-treatment is a thermo-chemical treatment of the biomass, making the glucose containing polymer susceptible to the enzymatic hydrolysis. Afterwards, the sugar released during the pretreatment and the enzymatic hydrolysis is then fermented to ethanol.

A3. PROJECT FEASIBILITY STUDY A3.2 MARKET DEMAND In last years, the world ethanol market witnessed an important development mainly due to its fuel sector supported by the majority of the national governments (as an important substitute to gasoline used in transport). Indeed, from a total ethanol demand of around 99.5-100 bln litres (as of 2011), about 83.5% is fuel ethanol while the rest is non-fuel (food & beverages, industrial or ethanol used in cosmetics & pharmaceutical, etc.). In terms of world ethanol production (approximation of 100.5 bln litres), about 83.65% is fuel ethanol while the rest is non-fuel.

Considered as a renewable fuel, ethanol demand is expected to further increase and according to the EIA forecast the world fuel ethanol is to displace 5.3% of total gasoline demand in 2016. The main fuel ethanol markets are the US, Brazil and the EU-27 representing together about 89-90% from global consumption and more than 92% from world production.

A3.6 ENVIRONMENTAL PROTECTION If youre using federal money to construct an ethanol plant or any associated facility, such as an access road or water supply, then your plant is subject to the National Environmental Policy Act (NEPA). NEPA requires federal agencies to incorporate environmental considerations in their planning and decision-making and to prepare a detailed

statement assessing the environmental impact of activities and alternatives that significantly affect the environment. The NEPA assessment for ethanol plants should include all potential environmental and human health impacts. Resources such as wetlands, water quality, hazardous waste, and air quality are commonly analyzed. Ethanol plants should also consider potential impacts to road and railway capacity; water supply and local municipal water systems; and handling and deposition of byproducts (wet or dry cake) from the plant operation. Significant effects that are identified and determined to be unavoidable, may require mitigation to reduce or minimize the environmental or human health impacts. Ethanol plants can have significant air emissions including volatile organic compounds, sulfur dioxide, nitrogen oxides, hazardous air pollutants and particulate matter. Selection of the plant location should focus on minimizing air quality impacts to downwind residents and consider other air emission sources in the area. As part of the environmental evaluation, EPA recommends completing a thorough emissions accounting and air quality modelling analysis, including fugitive emissions from haul roads and storage piles. We also recommend evaluating any projected capacity increase or phased construction approach to consider the total potential air impacts to the project area.