Whey is produced during the manufacture of cheese and casein and the major constituents of whey are lactose, minerals and protein. The large mass of whey produced (typically 7 to 9 tonnes and 25 tonnes per tonne of cheese and casein, respectively) and its high biological oxygen demand (BOD), from 35,000 to 60,000 mg/l, make it necessary for dairy companies either to process whey or to dispose of it in some environmentally acceptable manner (Hobman, 1984). Increasingly, the dairy industry is recognising whey as a by-product rather than as a waste product. The extraction of soluble proteins from whey using ultrafiltration is now well established but has only a minor effect on the volume and BOD of the whey. The disposal of deproteinated whey thus can still present a considerable environmental problem and cost to the dairy industry. The lactose content of the whey ultrafiltrate (40-50 g/l) may be regarded as a potential fermentation substrate. The options of producing compounds, such as lactic acid, propionic acid, citric acid, butanol, enzymes, and vitamins by fermentation have been proposed to the industry. Despite these many options, production of ethanol has developed as the only important fermentation process for whey utilization. Ethanol is an important industrial solvent and can also be used in internal combustion engines as a substitute fuel or as an octane booster (Coombs 1984). Potable grade ethanol is used for spirit manufacture and wine fortification.