Carbon dioxide is produced during ethanol fermentation. In order to prevent CO2 emission, gas CO2 is compressed, dried, liquefied, and injected into the reservoir for enhanced oil recovery. Under the operating condition of 2200 kPag and -20°C, the entrained ethanol is dropped out of liquefied CO2. The separated ethanol phase at local site resulted in trans-granular stress corrosion cracking of carbon steel piping and heat exchangers. The investigation involves CO2/ethanol phase behavior study, sourcing contaminants, and failure analysis. It is concluded that 1) ethanol stress corrosion cracking (SCC) is the root cause of the failure in presence of water, chloride and oxygen at pH of 3.0. 2) hydrogen stress cracking is the secondary damage mechanism. Trace of H2S originated from sulfate reducing bacteria (SRB) in ethanol plant and was carried over to the liquefied CO2. Its concentration was increased in the ethanol phase. Mitigation of SCC is approached by reducing ethanol carry-over, minimizing O2 ingress, and lowering the level of other contaminants.