Business Plan for Sustainable Ethanol Cooking Fuel in Developing World

Executive Summary Ethanol is considered as a promising cooking fuel in developing countries, particularly in South Asia and Africa, because of its economic, environmental and health benefits. It can be cheaply produced at lower costs than biomass resources and charcoal; it can reduce indoor exposures to pollutants resulting from indoor combustion; it can eliminate the need of women and children to spend hours every day gathering fuel wood and the dangers that accompany it, such as corporal threats, threats from wild animals, and physical exhaustion. In order to find a clean and ideal solution to meet the cooking demand of developing world, we believe an ideal technology is where stove and fuel can work in harmony to yield benefits cost-effectively. Since our client Project Gaia's Cleancook stove requires local and affordable ethanol supply, we assessed the technical and economic feasibility of a local representative, small-scale ethanol plant, based on a fully-integrated solution, encompassing feedstock supply, which is at the beginning of supply chain, through to ethanol product distribution and retailing plans. The local production of ethanol in a small-scale plant (i.e., 5,000 liters per day) proved to be cost-effective based on estimates developed from a spreadsheet cost model. In the model, the capital requirements were amortized (i.e., including equipment investment requirements, land acquisition costs, fixed operations and maintenance costs, etc.) and variable costs (e.g. feedstock costs, water costs, yeast costs, etc.) were taken into consideration. The results suggest that a small-scale local ethanol plant is economically feasible because the ethanol cost turns out to be $0.65 per liter which compares favorably to alternatives such as charcoal which costs $0.68 per day. Cooperation between plant and local farmers is a win-win situation. The ethanol plant needs to purchase feedstock (e.g. sweet sorghum and sugarcane) from nearby farmers. Generally, 50-75 small farmers can provide enough feedstock supply to keep the plant producing at full capacity. The farmers can earn extra cash from selling the feedstock and improve their life. A core group of farmers and can fully support the production of plant. Plans for the distribution of ethanol fuel and the recycle of ethanol bottles are also considered. Ethanol – in small-sized bottles made of durable plastic – can be distributed through designated stores in villages, towns or at local market places. Additionally, ethanol can be delivered to subscribers in town once or twice a week. Furthermore, we believe selling carbon credits …