NOVELTY - Producing (P1) ethanol, involves providing waste paper process sludge; combining sludge with waste paper process effluent stream to form slurry; adding reducing agent and cellulose enzyme to slurry; cooking slurry to convert substantial portion of cellulose to sucrose; separating cooked slurry into liquid portion and solids portion; filtering liquid portion to form filtered liquid portion; adding yeast to filtered liquid portion; fermenting filtered liquid portion to form beer; distilling beer to form ethanol stream; and removing water from ethanol stream and form pure ethanol product.    USE - For preparation of ethanol from waste paper mill sludge (claimed).    ADVANTAGE - The method prepared ethanol product has purity of greater than 99.99%. The method provides greater than 98% conversion of cellulose to sucrose. The process convert waste byproducts from the paper making process into useful ethanol at reasonable cost.    DETAILED DESCRIPTION - Producing (P1) ethanol from waste paper mill sludge, involves providing waste paper process sludge; combining the sludge with a selected waste paper process effluent stream to form a slurry containing cellulose; adding reducing agent to the slurry; adding cellulose enzymes to the slurry; cooking the slurry to convert substantial portion of the cellulose to sucrose; separating the cooked slurry into a liquid portion and a solids portion; filtering the liquid portion to form a filtered liquid portion; adding yeast to the filtered liquid portion; fermenting the filtered liquid portion to form a beer where a substantial portion of the sucrose has been converted to ethanol; distilling the beer to form an ethanol stream; and providing the ethanol stream to a separator to remove water from the ethanol stream and form substantially pure ethanol product. An INDEPENDENT CLAIM is included for a system for producing ethanol, comprising source of waste paper mill sludge containing cellulose; a selected effluent stream containing dissolved organic compounds; a reactor for receiving the sludge and the effluent stream and forming a slurry; a source of cellulose enzymes for providing cellulose enzymes to the slurry; a second reactor for receiving the slurry; a heater for heating the second reactor at 140 degrees F for 16-24 hours; a solids removal line for removing solids from the second reactor; a pipe connected to the second reactor for removing liquid from the second reactor; a fermentation tank connected to the pipe for receiving the liquid removed from the second reactor; a source of yeast for supplying yeast to the fermentation tank; a second pipe connected to the fermentation tank for removing fermented liquid; a distillation tower connected to the second pipe for receiving the fermented liquid from the fermentation tank; a heat source for heating the distillation tower; a third pipe connected to the distillation tower for removing an ethanol mixture from the distillation tower; a molecular sieve attached to the third pipe for receiving the ethanol mixture; and a pipe that removes a substantially pure ethanol product from the molecular sieve.