Different types of biomass, whether these are primary crops or residues, are applied nowadays as the raw material for biofuels. These raw materials are used just for their caloric value. Both direct (oil) and indirect use, after conversion of the biomass into a liquid component, preferably with an increased caloric value per volume, are distinguished. Ethanol or butanol are good examples of the latter.

Other components that are present in the biomass crops or their residues are often regarded as primary residues, however, these components could have significant value, and their valorisation could well contribute to the economic feasibility of the overall biofuels production process as well (Brehmer et al, 2009).

Thermal processing of biomass has the advantage that the heterogeneous biomass components are converted towards a much more homogeneous mixture, i. e. syngas or pyrolysis oil (Manurung et al., 2009). These processes, however, will not benefit from the presence of the specific components that are not easily converted into biofuels but could create value because of their functionality on a molecular level or on a macroscopic level, e. g. as construction material or as a product to make paper.

Functionalised bulk chemicals offer great economic potential, if one wants to substitute fossil raw materials by biomass, since these chemicals need to be synthesised using, apart from oil, large quantities of energy. The production of these chemicals conventionally also requires high capital costs due to the fact that many conversion steps are necessary to convert raw oil via naphtha and ethylene to these more complex functionalised chemicals (Sanders et al., 2007).

In plant material often molecular functionality is present that can be used to make the same bulk chemicals as nowadays by petrochemical processes, but now with short synthesis routes starting from biomass (Haveren, 2007; Scott, 2007). Certainly not all components in biomass represent these high values; also biofuels, power, heat and soil improvers like fertilisers will contribute to the overall valorisation of raw biomass materials.

When more than one product is produced from a biorefinery unit, the logistics and pre-treatment become more important (Bennett, 2009). Because the transport of water and minerals is not very sustainable, the first pre-treatment and fractionation steps will be performed close to the biomass production fields. This favours small scale operations close to the fields that make intermediate products that are easy to transport and that do not deteriorate in time. Questions that still have to be solved are: (1) how can small scale processes that do not suffer from diseconomy-of-scale, and preferably can operate more economically on small scale than on large scale, be developed? and (2) how sustainable are these processes taking into account People, Planet and Profit issues?