The. impetus for this paper is Canada's commitment under the United Nations Framework Convention on Climate Change to reduce national greenhouse gas emissions as well as reducing our dependency on fossil fuels. Wood-based ethanol offers an excellent opportunity for greenhouse gas mitigation due to market potential, an ability to offset significant emissions from the transportation sector, a reduction of emissions from CO2-intensive waste-management systems, and carbon sequestration in afforested plantations. While there are technological and economic barriers to overcome, using wood-biomass as a source of ethanol can be an economically viable tool for reducing greenhouse gas levels in the atmosphere. This paper examines the costs and mitigation potential of the production of ethanol from biomass supplied from industrial wood waste as well as from trees harvested from afforested land.