Lignin, one of the three major polymeric components of biomass (16% to 33% by weight in wood), has the highest specific heat content. Therefore, it can be burned for process fuel. Compared to coal, its fuel value is 2.2 cents/lb. This report investigates markets for lignin utilization of higher value. After lignin isolation from the process, purchase of replacement fuel (coal was analyzed), lignin sale for the manufacture of solid materials or higher value octane enhancers was evaluated. Polymeric applications evaluated were: surfactants, asphalt, carbon black, adhesives, and lignin plastics; agricultural applications were briefly reviewed. These lignins would generate coproduct credits of 25 cents to 150 cents/gallon of ethanol respectively for 7.5 cents to 60 cents/lb lignin value (isolation and eventual modification costs were taken into account). Overall markets for these polymeric applications were projected at 11 billion lb/year by the year 2000. These projections are intensities of demand and not actual shipments of lignins. In addition, this report investigates the possibility of converting lignins into mixtures of methyls aryl ethers and methyl substituted-aryl ethers which are high value octane enhancers, fully compatible with gasoline. The report intends to show that if fuel ethanol production in the billions of gallonsmore » scale occurs lignin markets would not be saturated. 10 refs., 14 figs., 36 tabs.« less