A process is under development at the University of New South Wales to produce fermentation ethanol faster and more efficiently. The process is based on the micro-organism Zymomonas mobilis, which has higher specific rates of ethanol production and higher yields when compared with the traditionally used yeasts. By using hollow fibre membranes for cell recycle, high productivity continuous processes have been studied at laboratory-scale. Pilot scale evaluations (500 litres) are now in progress through Licence Agreements between the University and industry. Genetic manipulation and recombinant DNA techniques are being used to increase the ethanol tolerance and broaden the substrate range. Most recently glucoamylase genes from Aspergillus niger have been cloned into Escherichia coli K12 as part of a programme to enable direct fermentation of starch to ethanol by Z. mobilis.