BACKGROUND: In North America, compared with sugar, starch is a more economical raw material to produce ethanol. Recently low temperature processing of starch granules directly to ethanol has been commercialized. With a view to minimizing process costs while maintaining a satisfactory ethanol yield, an inexpensive medium that does not require the addition of commercial alpha-amylase has been developed for low temperature, direct fermentation of starch particles. RESULTS: Compared with an expensive medium that contained both yeast extract and alpha-amylase, the inexpensive medium resulted in identical and 10% higher ethanol yields using glucose and starch granules as the raw substrates, respectively, but required longer processing times. Based on the different ingredient prices for expensive and inexpensive media, the operating cost to produce 10 million litres per year of ethanol utilizing simultaneous raw starch hydrolysis and fermentation is reduced over $2 million (Cdn) per year when using inexpensive medium. CONCLUSION: The new inexpensive medium and simultaneous raw starch hydrolysis and fermentation is considered the best strategy to produce ethanol directly from starch particles in North America. (C) 2009 Society of Chemical Industry