Abstract One of the major justifications for bio-energy systems is their low greenhouse gas (GHG) emissions compared to fossil-energy ones. Transforming a sugar mill into a bio-energy plant would contribute to climate change mitigation via the extraction of renewable electricity and ethanol. This study takes the case of the sugar industry in Thailand and identifies scenario options that offer GHG reduction benefits. Improving efficiency in electricity generation from sugar cane residues e.g. excess bagasse and cane trash is such a beneficial option. Furthermore, extracting ethanol in a so-called bio-refinery, where the co-product stillage is utilized for energy, tends to magnify the potential benefit. The largest savings potential achieved with extracting ethanol from surplus sugar versus current practice in the sugar industry in Thailand amounts to 14 million tonnes CO 2 e a year. This cannot be realized in practice until the carbon debt from land conversion is repaid, which takes 4.5–7 years, assuming that the land converted is grassland.