What are the capital costs for setting up ethanol to fuel plants?

The answer to this question depends on whether you are looking at deriving ethanol from starch or whether you are looking at putting up cellulose-to-ethanol (called cellulosic ethanol) plants.

Well, right now pretty much all large-scale commercial ethanol plants are running on the starch route, because the cellulosic ethanol route is not yet fully commercial – one could say they are in the late pilot stage. But it is expected that they could be commercialized within the next few years, so it will be good to have data for capital costs for both the starch and the cellulose route.

Starch-to-ethanol plants cost about $1 per annual gallon, using a simple thumbrule. A million gallons per annum capacity plant hence costs about $ 1 million; A million gallons = 3.84 million liters = 3.5 million Kg = 3500 T = approx 10 T per day. Thus, a 10 T per day ethanol fuel plant will cost about 5 crores; a plant with a capacity of 1 T per day will thus cost about Rs 50 lakhs of capex.

For cellulosic ethanol, the capex will be about Rs 1.5 crores per T per day of ethanol produced. Yes, cellulosic ethanol route is far more capex intensive than the starch route. Most of this capital cost difference actually comes owing to the infrastructure required for the pretreatment of the cellulosic biomass before it can be fermented.

Fortunately, data suggest that this high capex for cellulosic ethanol is decreasing fast, accompanied by significant decreases in operating expenses as well.