This study comprises a technical and economic analysis of the production of fuel ethanol by fermentation of a pentose‐rich hydrolysate with recombinant Escherichia coli, strain KO11. Hydrolysate from steam‐pretreated willow was used as raw material in calculations regarding the fermentation. The calculations were based on a feed capacity of 10 metric tons of dry willow per hour to the pretreatment stage, providing 35 metric tons of hydrolysate per hour, consisting of 45 g of sugars/L, to the pentose fermentation plant. A detoxification step was included, since the hydrolysate has been shown to have an inhibitory effect on the E. coli KO11. The technical data used in the calculations were based on a kinetic fermentation model, which was developed from laboratory‐scale experiments in a previous study. The economic analysis predicted an ethanol production cost of 48¢/L in the pentose fermentation plant, indicating potentially good economy. The detoxification cost constitutes 22% of this cost. Sensitivity analyses revealed that if the concentration of sugars in the feed to the fermentation was decreased by 40% to 27 g/L, the ethanol production cost was increased to 54 ¢/L. The production cost was increased to 50 ¢/L ethanol if the cell mass was recirculated to the fermentation stage 5 times instead of 20.