Chile depends on foreign sources for energy. A solution for this problem is needed to guarantee stability and economic development. Public policies have been proposed involving diversification of the power matrix with an increasing share for Non-conventional Renewable Energies (NCRE) from unconventional resources in the medium- and long-term. In this framework, new funding strategies are fundamental to encourage applied research in this field. Main research subjects are considered: survey, quantification and characterization of raw materials, introduction of energy crops and studies focused on transportation, management and conversion of lignocellulose for the second-generation biofuel industry. A recent regulatory framework allows the substitution of 2 or 5% of gasoline and diesel by ethanol and biodiesel, respectively; however, this is not mandatory because biofuel supply is still non-secured. On the other hand, the scenario for private initiatives focused on first-generation biofuels is not promising, and this may continue in time depending on the price of imported biofuels and local production costs. In 2015, production of second-generation biodiesel in Chile should be fundamentally based on forestry residues using Fischer-Tropsch processes. Local efforts consider biochemical transformation of lignocelluloses including agricultural wastes. Our group is focused on optimization of local second-generation bioethanol production; preliminary results are presented here. (C) 2010 Elsevier Ltd. All rights reserved.