Cellulosic ethanol is obtained from sugar-poor material such as switchgrass.

The tough cellulose is harder to break down.

The ground material is steamed and treated with special enzymes to break down cellulose into sugar subunits.

Yeast is added to ferment the sugars, producing ethanol and CO₂ as a byproduct.

Another byproduct is indigestible lignin; this must be separated and can be used as biomass fuel.