The hydrogen production process is known to be important to a fuel cell system. In this study, a carbon free hydrogen production process is proposed by using a two-step ethanol-steam-reforming procedure, which consists of ethanol dehydrogenation and steam reforming, as a fuel processor in the solid oxide fuel cell (SOFC) system. An addition of CaO in the reformer for CO2 capture is also considered to enhance the hydrogen production. The performance of the SOFC system is analyzed under thermally self-sufficient conditions in terms of the technical and economic aspects. The simulation results show that the two-step reforming process can be run in the operating window without carbon formation. The addition of CaO in the steam reformer, which runs at a steam-to-ethanol ratio of 5, temperature of 900 K and atmospheric pressure, minimizes the presence of CO2; 93% CO2 is removed from the steam reforming environment. This factor causes an increase in the SOFC power density of 6.62%. Although the economic analysis shows that the proposed fuel processor provides a higher capital cost, it offers a reducing active area of the SOFC stack and the most favorable process economics in term of net cost saving. (C) 2015 Elsevier B.V. All rights reserved.