Abstract The Brazilian experience of more than three decades in the development and production of fuel ethanol from sugarcane has been an example of the technical and institutional requirements for the sustainable development of second generation ethanol (lignocellulosic ethanol) production. The main goal of this paper is to demonstrate the positive sugarcane conditions for the development of second generation ethanol. In order to do that, different industrial scenarios are considered to discuss technical and economic aspects of present and future sugarcane biorefineries. Furthermore, a carbon balance is performed to assess the added value to the carbon present in different sugarcane biorefinery products. The current Brazilian sugarcane production, which is processed in more than 400 mills, is around 600 Tg y −1 , occupying an area of 78,000 km 2 . It can supply 84 Tg of bagasse at no cost and about 42 Tg of trash, which can be processed as a lignocellulosic material for ethanol production or other higher added value products in a biorefinery – as carbon balance results showed that a biorefinery is able to add value to the carbon presented in the sugarcane – using second generation technologies.