Softwoods are generally considered to be one of the most difficult lignocellulosic feedstocks to hydrolyze to sugars for fermentation, primarily owing to the nature and amount of lignin. If the inhibitory effect of lignin can be significantly reduced, softwoods may become a more useful feedstock for the bioconversion processes. Moreover, strategies developed to reduce problems with softwood lignin may also provide a means to enhance the processing of other lignocellulosic substrates. The Forest Products Biotechnology Group at the University of British Columbia has been developing softwood-to-ethanol processes with SO2-catalyzed steam explosion and ethanol organosolv pretreatments. Lignin from the steam explosion process has relatively low reactivity and, consequently, low product value, compared with the high-value coproduct that can be obtained through organosolv. The technical and economic challenges of both processes are presented, together with suggestions for future process development.