The chemical properties of the lignocellulosics make them a substrate of enormous biotechnological value. Plant biomass comprising lignin, hemicellulose and cellulose is one of the foreseeable renewable resources on the planet. With depleting petroleum resources and increasing demand on energy, lignocellulose derived ethanol seems to be the future of transportation fuels. Also it is apparent that integrated bio-refineries, analogous to petroleum refineries, would generate chemicals from the biomass thus moving the world towards a carbohydrate based economy. Such biorefineries would be capable of extracting from biomass, building block chemicals such as starch, hemicellulose, cellulose, lignin, proteins and lipids; and then converting them into a wide range of products dealing with almost every possible aspect of our daily life. Development and deployment of efficient and economically viable technologies in commercial scale for production of ethanol from biomass are the major challenges today.

Cost of enzymes, which is one of the critical factors for the process to become economical, needs substantial reduction. Major breakthroughs are needed to reduce the cost of producing cellulases, hemicellulases and to bring improvements in their activity and efficiency. A concerted effort in understanding the basic physiology of cellulolytic microbes and the utilization of this knowledge coupled with engineering principles is imperative to achieve a better processing and complete utilization of the plant biomass.

Hemicellulose constitutes a major portion of the biomass, which plays a crucial role in the quantitative biomass conversion to useful products. The complete bioconversion of hemicellulose to sugar monomers is considered to be the main hurdle in the commercial success of bioconversion processes from the technical as well as the economic point of view.

Cellulases and hemicellulases have numerous applications and biotechnological potential for various industries including chemicals, fuel, food, brewery and wine, animal feed, textile and laundry, pulp and paper and agriculture. Lignocellulose biotechnology from investment perspective could be an attractive option for developing countries since its biodegradation could be achieved by solid-state fermentation, thus making such technology suitable for farms and small industrial plants without the need for large engineering infrastructure. The need for more efficient bio-separation processes leading to pure enzymes with less number of steps and lower costs needs to be developed towards commercialization.

The removal of lignin from woody biomass has attracted a great deal of research, especially due to its importance in the pulp and paper industry as well as for bioremediation. Ligninases, the enzymes of choice encompass a wide range of enzymes viz. laccase, lignin peroxidase and manganese peroxidase that have the capability to degrade a wide range of aromatic substrates thereby holding a great potential for bioremediation as well as Industrial applications.