AbstractIn the future liquid biofuels will need to be renewable, sustainable, as well as technically and economically viable. This paper provides an overview of the challenges that the biochemical production of cellulosic ethanol process still faces. The main emphasis of the paper is on challenges that emerge from the scale of liquid biofuel production. These challenges include raw material availability, other consumables, and side stream handling. The pretreatment, C5 fermentation, and concentration of sugars in processing need improvements, too. Sustainability issues and greenhouse gas reduction also pose a challenge for implementation and require development of internationally recognized sustainability principles and standards, and certification of sustainable operation. Economics of cellulosic ethanol processes are still also an area under development and debate. Yet, the Energy Independence and Security Act mandate together with the European Union Renewable Energy Directive and other local targets are driving the development and implementation forward towards more significant contribution of biofuels in the transportation sector.