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There has been a significant degree of hype regarding the commercial potential of second-generation biofuels (2GBs; biofuels sourced from lignocellulosic materials). In 2007, ambitious targets for the mass substitution of fossil-fuel-derived transport fuels by 2GBs were put forward in the United States and similar targets exist for other countries. However, as of May 2012, no commercial-scale 2GB facilities are currently operating. The technical and financial obstacles that have delayed the deployment of these facilities are discussed, as are recent advancements in research that may help to overcome some of these. There are six commercial-scale facilities currently (May, 2012) in construction and many more are planned in the near term. The prospects for 2GBs are more promising now than in the past but the delays in getting to this point mean that the ambitious targets of several years ago are unlikely to be reached in the near term.