Efficient sugarcane ethanol produced in bagasse-fired distilleries typically achieves an EROEI of about 2–4, whereas grain-based ethanol generally ranges between 1.2 and 2 because of higher fossil-energy inputs. Water-footprint studies estimate that producing one litre of sugarcane ethanol may embody approximately 2,000–3,500 litres of water, depending on local climatic conditions and irrigation practices. Without careful resource accounting, expanding ethanol production risks replacing dependence on imported crude oil with growing dependence on increasingly scarce freshwater resources. The consequence is not merely inefficient resource use but also the possibility that public subsidies inadvertently encourage ethanol production in regions where its true social cost is high. A more efficient approach would be to support farmers directly through income transfers while allowing electricity, irrigation water and fertiliser prices to better reflect their economic and environmental costs.