Overview of Ethanol Production Plant Capital and Operating Cost

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Researched by Industrial Info Resources (Sugar Land, Texas). As part of our continuing reporting of activity in the ethanol industry, Industrial Info has estimated capital and operating costs for a typical size ethanol plant. Attached are detailed cost estimates. These were generated by Industrial Info and confirmed by other sources, including the U.S. Department of Agriculture, National Corn Growers Association, state corn growers associations, and engineering companies.

The average size of a new ethanol plant being constructed these days is about 50 million gallons per year. The following is a line item listing of the capital cost (in $millions) for a 50 million gallons per year ethanol plant located at a Midwest U.S. location. Major installed equipment in a 50 million gallon per year ethanol production plant includes (3) corn grinders, slurry tank, cooker, (4) fermenters (750,000 gallons each), distillation column (10’x70’), Molecular Sieve Vessel, and enough storage capacity for ten days of corn supply and ethanol product.

Physical Plant (Including offsites)

Equipment (Installed) - $20 million

Design & Engineering - $6 million

Site - $3 million

Grain Handling - $6 million

The subtotal for the physical plant is $35 million. Additional costs includes $15 million for construction labor, and $15 million for construction materials including pipe, conduit, steel, concrete, and rebar. Capital costs for a 50-million gallon per year plant are $65 million for the plant and $10 million for working capital, for a total of $75 million.

The following income statement indicates annual revenue of $154 million and costs of $73 million for a gross profit of $81 million. These numbers indicate a payout for total investment of $75 million and a profit of $81 million to be less than a one-year period to recover plant investment.

Income Statement (Source: USDA)

*Total Income of $154 million, includes $141 million for ethanol sales (50MM gallons/year ethanol @$2.53/gal - $2.53 is spot price – contract price somewhat lower), and $13 million income from Distillers Dry Grain Solubles (DDGS)(18 lbs/bushel, 18MM bushels/yr: 162,000 tons/yr @ $80/ton).

*Total Cost of $73 million, includes $39 million for cost of corn (2.8 gal. ethanol per bushel, 18 million bushels corn/year @ $2.21 per bushel), and $34 million of processing cost, which includes electricity, maintenance, labor, enzymes, water, fuels, administration, and depreciation.

IIR's Ethanol Production Database provides a comprehensive outline of all current development activities in the emerging synthetic fuels market. This database covers 123 ethanol plants currently in operation and 234 plants under development. It also covers 17 operational biodiesel plants and 40 biodiesel plants underdevelopment.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.