BACKGROUND Bioethanol, an important biofuel, obtained from biomass fermentation is dilute and unsuitable for direct use as fuel for transportation. Its recovery and dehydration to similar to 99.5 wt% ethanol is energy-intensive because of dilute feed (similar to 10 wt% ethanol) and occurrence of ethanol-water azeotrope. From an energy efficiency perspective, hybrid separation processes consisting of a membrane-based module coupled with distillation are a promising alternative to conventional separation by distillation alone. RESULTS The present article proposes the novel process of double-effect distillation with vapor recompression (DED) for bioethanol recovery followed by vapor permeation (VP) for bioethanol dehydration (to 99.8 wt% ethanol) from a ternary feed of ethanol (10 wt%), water (89.9 wt%) and CO2 (0.1 wt%) and compares it with the process of simple distillation followed by vapor permeation (D-VP). Multi-objective optimization is performed for both processes, and the obtained Pareto-optimal solutions for minimizing fixed capital investment and annual operating cost are presented and discussed. Compared with the optimal D-VP process, the optimal DED-VP process is found to be better, with 17 and 11% savings in energy consumption and total annual cost (TAC) respectively. CONCLUSION Specific energy consumption (SEC) of the DED-VP process is 5% lower than that of the hybrid process of distillation for recovery followed by pressure swing adsorption for dehydration (D-PSA) used industrially. Continued developments in membranes that can provide high permeance, selectivity and/or operating life can further reduce TAC and SEC of the DED-VP process. (c) 2018 Society of Chemical Industry