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This report provides an outline of the current state-of-the-art conversion of lignocellulosic (the major natural polymer components of plants and wood) materials to second generation biofuels. Rural industries, local, state and federal governments, policy makers, first generation biofuels producers, investment bodies, communities and the general public can all benefit from this information. Concise yet thorough summaries of lignocellulosics to biofuels are difficult to come by and the information presented in this report has been gleaned from a wide variety of sources. It is the aim of this report to provide an overview of the second generation biofuels field in an Australian context and to describe the barriers to wider adoption of these biofuels. It builds on RIRDC reports published in 2007 that covered many aspects of current biofuel production and demonstrated the need for new sources of biomass to satisfy a larger scale of biofuel production.