<P><B>Background</B></P><P>Future sustainable energy production can be achieved using mass cultures of photoautotrophic microorganisms, which are engineered to synthesize valuable products directly from CO<SUB>2</SUB> and sunlight. As cyanobacteria can be cultivated in large scale on non-arable land, these phototrophic bacteria have become attractive organisms for production of biofuels. <I>Synechococcus</I> sp. PCC 7002, one of the cyanobacterial model organisms, provides many attractive properties for biofuel production such as tolerance of seawater and high light intensities.</P><P><B>Results</B></P><P>Here, we performed a systems analysis of an engineered ethanol-producing strain of the cyanobacterium <I>Synechococcus</I> sp. PCC 7002, which was grown in artificial seawater medium over 30 days applying a 12:12 h day–night cycle. Biosynthesis of ethanol resulted in a final accumulation of 0.25% (v/v) ethanol, including ethanol lost due to evaporation. The cultivation experiment revealed three production phases. The highest production rate was observed in the initial phase when cells were actively growing. In phase II growth of the producer strain stopped, but ethanol production rate was still high. Phase III was characterized by a decrease of both ethanol production and optical density of the culture. Metabolomics revealed that the carbon drain due to ethanol diffusion from the cell resulted in the expected reduction of pyruvate-based intermediates. Carbon-saving strategies successfully compensated the decrease of central intermediates of carbon metabolism during the first phase of fermentation. However, during long-term ethanol production the producer strain showed clear indications of intracellular carbon limitation. Despite the decreased levels of glycolytic and tricarboxylic acid cycle intermediates, soluble sugars and even glycogen accumulated in the producer strain. The changes in carbon assimilation patterns are partly supported by proteome analysis, which detected decreased levels of many enzymes and also revealed the stress phenotype of ethanol-producing cells. Strategies towards improved ethanol production are discussed.</P><P><B>Conclusions</B></P><P>Systems analysis of ethanol production in <I>Synechococcus</I> sp. PCC 7002 revealed initial compensation followed by increasing metabolic limitation due to excessive carbon drain from primary metabolism.</P><P><B>Electronic supplementary material</B></P><P>The online version of this article (doi:10.1186/s13068-017-0741-0) contains supplementary material, which is available to authorized users.</P>