This paper reports on the state of research and development in respect of the CO2-neutral steam generation for decentralized bioethanol production project sponsored by the German ministry for food, agriculture and consumer protection. The project is scheduled to run for two years and is being carried out by Professor Christof Wetter of the Münster University of Applied Sciences and his co-workers. Its focal points are the investigation of the technical conduct of steam generation from exhaust gas heat in biogas-fired communal combined heat and power plants, determination of the plant efficiency factor, assessment of bioethanol production with CO2-neutral process steam, and small-footprint closure of the material and energy loops.