This looks hopeful.
Turning timber residues into biofuels
http://www.csiro.au/people/Steven.Loffler.html
Waste from paper mills
The researchers have found a way of using a novel chemical process to
convert material collected from wastes from paper mills with other
lignocellulose rich wastes and residues into a concentrated liquid
‘biocrude oil’ that can be transported easily to a processing plant.
Dr Loffler said that until now it has been uneconomic to use green
waste materials, such as forest thinnings and straw, to make biofuels
and environmentally friendly chemicals because of the high cost of
trucking the bulky waste many hundreds of kilometres for processing.
'There have been plenty of attempts around the world to do this, but
the bio-oil has been unstable and turns into bitumen in just weeks,'
says Dr Loffler.
Stable oil
'Our process creates a stable oil that can be tankered to the
biorefinery in a similar way as crude oil is carried to conventional
petrochemical refineries.'
'This renewable liquid can potentially be converted into either fuel
replacements or value-added polymers and industrial chemicals, using
current technology.'
'The fuel replacements can be gasoline or diesel substitutes, or
ethanol.'
CSIRO is now selecting trees with more desirable traits for making
biofuels, plastics, and other renewable products that will provide new
value streams from forest-based materials.