Biofuels that are produced from biobased materials are a good alternative to petroleum based fuels. They offer several benefits to society and the environment. Producing second generation biofuels is even more challenging than producing first generation biofuels due the complexity of the biomass and issues related to producing, harvesting, and transporting less dense biomass to centralized biorefineries. In addition to this logistic challenge, other challenges with respect to processing steps in converting biomass to liquid transportation fuel like pretreatment, hydrolysis, microbial fermentation, and fuel separation still exist and are discussed in this review. The possible coproducts that could be produced in the biorefinery and their importance to reduce the processing cost of biofuel are discussed. About $1 billion was spent in the year 2012 by the government agencies in US to meet the mandate to replace 30% existing liquid transportation fuels by 2022 which is 36？billion gallons/year. Other countries in the world have set their own targets to replace petroleum fuel by biofuels. Because of the challenges listed in this review and lack of government policies to create the demand for biofuels, it may take more time for the lignocellulosic biofuels to hit the market place than previously projected. 1. Introduction to Biorefineries Biorefineries are manufacturing facilities that convert biobased materials (such as agricultural residues) to various products such as food, feed, fuels, chemicals, and energy [1, 2]. Biomass processing is analogous to petroleum refineries, which refine crude oil into several products including fuels (e.g., petrol, diesel, and kerosene) and chemical precursors like butanol for manufacturing different materials [3]. According to renewable energy policy network [4], in 2011, roughly 78% of energy consumed in the world was from fossil fuel, 3% from nuclear energy, and the remaining 19% from renewable energy that is obtained by renewable resources (wind, solar, geothermal, hydrothermal, and biomass). About 13% of the renewable energy is harnessed from carbon rich biobased materials available on earth either by directly burning biomass or by the thermochemical conversion of biomass to heat and power. Currently, the majority of biofuels are produced using sugars extracted from agricultural feedstock or by converting starch into sugars primarily from edible grains (Figure 1). The sugars from both the sources are then fermented into ethanol using yeast [5]. Figure 1: Contribution of renewable energy and biofuels in the total energy
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