Economic calculations for the enzymatic process performed by von Sivers (48) show that the capital cost is the most dominating, amounting to 47% of the totabcost, followed by the raw material cost (30 %). The cost estimate is based on experimental data from the literature using pine as raw material and a plant capacity of 100,000 ton dry matter/year. The calculations are based on separate hydrolysis and fermentation (SHF) and anaerobic fermentation of the waste water. Figure 3 shows the production cost for each process step. The most expensive step, constituting 15% of the total cost, is the steam production, including the lignin dryer, the steam boiler and the anaerobic treatment of the liquid waste, followed by pretreatment (13%) and enzymatic hydrolysis (12%). In the following, four examples of major contributors to the overall process economy are discussed.

Influence of the Raw Material. Since the raw material contributes a large part to the total ethanol production cost, the production cost is greatly affected by the cost of the wood and by the chemical and physical characteristics of the wood. These characteristics determine the difficulty in converting the cellulose and hemicellulose fractions in the wood to fermentable sugars at high yields, which in turn influences capital and operating costs. Softwood has proven to be more difficult to utilise than hardwood (30, 49). The chemical composition of the wood determines how much ethanol can theoretically be produced per tonne of raw material. The difference in composition between hardwood and softwood is that hardwood contains high levels of xylan, low levels of mannan and less lignin than softwood. The high level of xylan in hardwood makes it necessary to include a pentose fermentation step or the production of some co-product such as furfural or methane from the xylose, to make ethanol production from hardwood economically feasible. The pentose fermentation step requires further development before it can be used in a full-scale process, although much progress has been made in recent years. Zymonas mobilis (39), S. cerevisiae (37, 50), and Escherichia coli (38) have successfully been genetically transformed to ferment xylose to ethanol, but the organisms must also tolerate the inhibiting components in the hydrolysates. Otherwise, a detoxification step must be included, which has been shown to be quite expensive (51).

As the cost of the raw material is high, its maximum utilisation is important to lower the final cost of the ethanol. The overall ethanol yield has proven to be the most important factor for the ethanol production cost and it is necessary to develop the various steps in the process, i. e. pretreatment, hydrolysis and fermentation, to achieve as high a yield as possible. As a consequence of this, we have at Lund University a large R&D program focused on the development of these different process steps. However, it is also very important to examine how the various process steps perform in an integrated process, for example, how the accumulation of inhibitors due to recirculation will affect the ethanol yield. This has been investigated in the bench — scale process development unit where the whole process can be experimentally simulated. This is discussed in more detail in the section "Recycling of process streams".

Capital Cost. The enzyme production and the hydrolysis steps are the major contributors to the capital cost. These steps are rate limiting in the process and the high costs are due to the long residence time which requires numerous and large reactors. Decreased residence times in these two steps must be weighed against reduced enzyme and sugar yields. One way of reducing the capital cost for the enzymatic hydrolysis and fermentation steps is to use the SSF concept. There are several advantages with SSF. Only one reactor is needed for both hydrolysis and fermentation, no product inhibition of the enzymes in the hydrolysis arises when the glucose is converted directly to ethanol, and the risk of contamination decreases for the same reason. According to a study performed by Wright et al. (52) the SSF process leads to a reduction in the total production cost of about 30% compared with SHF. One drawback of SSF which remains to be overcome is recycling of the yeast. If the pretreated material is not delignified, it will be very difficult to separate the yeast from the lignin residue after SSF. The capital and productivity advantages attributed to the SSF configuration may decrease drastically due to the cost of producing new yeast in every fermentation batch or the cost of an additional delignification step. An alternative is to run the SSF continuously at low dilution rates (long residence times) so that the yeast has time to grow; but this will require extra-large fermenters. As the hydrolysis is rate limiting, SSF will, in any case, require large fermenters compared with separate hydrolysis and fermentation, where only the hydrolysis tanks are large. Fermenters are more complex and expensive than hydrolysis tanks and the gain in using one reactor instead of two will decrease. The bench-scale unit will, in the near future, be used to compare the SHF and the SSF methods in an integrated process.

Energy. Some operations, such as pretreatment of the raw material, distillation of the product, drying of the lignin, and, if included, evaporation of the stillage for recirculation of process water, are extremely energy demanding. In the steam pretreatment stage, high-quality steam of 20-30 bar is used, while in the drying section and in distillation steam of 3-6 bar is used. The steam consumption in the distillation step is very dependent on the ethanol concentration in the distillation unit. However, in a carefully designed and energy-integrated plant it is possible to reduce the energy costs by a considerable degree. This is described in more detail in the section "Process Integration".

By-products. The primary by-product from the large-scale production of ethanol will be lignin. Lignin can be utilised for many chemical applications, but due to the large amount of lignin which will be produced in a future transition from fossil fuels to fuel ethanol, the most realistic use of lignin is as a solid fuel. An alternative is to use the lignin for electricity production in a back-pressure power plant. The price obtained for the lignin will affect the cost of the ethanol (53, 54) but not as much as the cost of the raw material. Lignin and other by-products are produced in the bench-scale unit for further characterisation as the quality is of great importance for the price.