In this paper we show the effects of expanding the system when evaluating well-to-wheel (WTW) CO2 emissions for biomass-based transportation, to include the systems surrounding the biomass conversion system. Four different cases are considered: DME via black liquor gasification (BLG), methanol via gasification of solid biomass, lignocellulosic ethanol and electricity from a biomass integrated gasification combined cycle (BIGCC) used in a battery-powered electric vehicle (BPEV). All four cases are considered with as well as without carbon capture and storage (CCS). System expansion is used consistently for all flows. The results are compared with results from a conventional WTW study that only uses system expansion for certain co-product flows. It is shown that when expanding the system, biomass-based transportation does not necessarily contribute to decreased CO2 emissions and the results from this study in general indicate considerably lower CO2 mitigation potential than do the results from the conventional study used for comparison. It is shown that of particular importance are assumptions regarding future biomass use, as by expanding the system, future competition for biomass feedstock can be taken into account by assuming an alternative biomass usage. Assumptions regarding other surrounding systems, such as the transportation and the electricity systems are also shown to be of significance. Of the four studied cases without CCS, BIGCC with the electricity used in a BPEV is the only case that consistently shows a potential for CO2 reduction when alternative use of biomass is considered. Inclusion of CCS is not a guarantee for achieving CO2 reduction, and in general the system effects are equivalent or larger than the effects of CCS. DME from BLG generally shows the highest CO2 emission reduction potential for the biofuel cases. However, neither of these options for biomass-based transportation can alone meet the needs of the transport sector. Therefore, a broader palette of solutions, including different production routes, different fuels and possibly also CCS, will be needed. Copyright (c) 2009 John Wiley & Sons, Ltd.