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Bioethanol is a fuel-grade ethanol made from trees, grasses, and waste materials. It represents a sustainable substitute for gasoline in today's passenger cars. Modeling and design of processes for making bioethanol are critical tools used in the U.S. Department of Energy's bioethanol research and development program. We use such analysis to guide new directions for research and to help us understand the level at which and the time when bioethanol will achieve commercial success. This paper provides an update on our latest estimates for current and projected costs of bioethanol. These estimates are the result of very sophisticated modeling and costing efforts undertaken in the program over the past few years. Bioethanol could cost anywhere from $1.16 to $1.44 per gallon, depending on the technology and the availability of low cost feedstocks for conversion to ethanol. While this cost range opens the door to fuel blending opportunities, in which ethanol can be used, for example, to improve the octane rating of gasoline, it is not currently competitive with gasoline as a bulk fuel. Research strategies and goals described in this paper have been translated into cost savings for ethanol. Our analysis of these goals shows that the cost of ethanol could drop by 40 cents per gallon over the next ten years by taking advantage of exciting new tools in biotechnology that will improve yield and performance in the conversion process.

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