Due to the global increase in energy consumption, greenhouse gas emissions, and the depletion of fossil energy resources, the research presented here is focused on finding economically and environmentally competitive renewable energy resources. Fuel production from biomass is an attractive solution in this regard. Competing interests between food and energy have yielded increased interest in lignocellulosic biomass (LGB) as a feedstock. Processes such as biodiesel production from palm oil generate large volumes of LGB residues. Valorization of these residues through biorefineries may bring economic and environmental benefits through substitution of fossil fuels and such options must be studied in a systematic manner. The goal of this research is to propose a methodology for economic and environmental analysis of such biorefineries. A case study of a palm-based biorefinery in Brazil is used to illustrate this. Results indicate that multi-product processes can yield significant cost and environmental benefits.