A method of producing ethyl alcohol from whey involves removing the protein, e.g. by ultrafiltration, concentrating the deproteinized whey (preferably by reverse osmosis) to >8 g lactose (preferably to 12-24 g)/100 ml, fermenting the concentrate, preferably with Candida pseudotropicalis NCYC 744 to produce ethyl alcohol, and distilling the liquor. In tests with whey permeates containing 8.3-18.7 g lactose/100 ml, the average yield of ethyl alcohol was >80% of the theoretical yield.

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