Ethanol conversion to hydrogen has been investigated by a series of thermodynamic analyses and computer simulations within the context of a cost-effective fuel processor/fuel cell system where heat exchange is of great importance. Two different methods, multi-reaction equilibria and Gibbs free energy minimisation, are used for the thermodynamic analyses. The computer simulations consider the catalytic conversion of ethanol to hydrogen on a bimetallic Pt-Ni catalyst by indirect partial oxidation (IPOX) which consists of total oxidation (TOX), steam reforming (SR) and water-gas shift (WGS) reactions. The results indicate that there is an optimal water:fuel ratio for maximum hydrogen production at each operating condition for hydrogen yields calculated as a percentage of the theoretical value. Mass-based hydrogen yields are also presented considering fuel economy especially for vehicular applications. Finally, the benefits of using a secondary WGS reactor and the comparison of the results of the two thermodynamic methods are highlighted. (c) 2005 Society of Chemical Industry.