Notwithstanding the plentiful published work on the production of ethanol from lignocellulosic materials this comprehensive review relates how the basic research of a commercially viable industrial production strategy is still lacking. The objective of this review is to compile information on the different strategies and to consolidate the biologically mediated events involved in the conversion of pre-treated lignocellulose to ethanol and associated expenses so that some generalized information can be developed that could help policy makers and other stakeholders in designing a policy framework to promote second generation biofuels. The review also discusses the potential of process integration, its cost competitiveness and role in establishing commercial facilities for the production of ethanol from lignocellulosic biomass.