BackgroundDriven by a range of sustainability challenges, e.g. climate change, resource depletion and expanding populations, a circular bioeconomy is emerging and expected to evolve progressively in the coming decades. South Africa along with other BRICS countries (Brazil, Russia, India and China) represents the emerging bioeconomy and contributes significantly to global sugar market. In our research, South Africa is used as a case study to demonstrate the sustainable design for the future biorefineries annexed to existing sugar industry. Detailed techno-economic evaluation and Life Cycle Assessment (LCA) were applied to model alternative routes for converting sugarcane residues (bagasse and trash) to selected biofuel and/or biochemicals (ethanol, ethanol and lactic acid, ethanol and furfural, butanol, methanol and Fischer–Tropsch synthesis, with co-production of surplus electricity) in an energy self-sufficient biorefinery system.ResultsEconomic assessment indicated that methanol synthesis with an internal rate of return (IRR) of 16.7% and ethanol–lactic acid co-production (20.5%) met the minimum investment criteria of 15%, while the latter had the lowest sensitivity to market price amongst all the scenarios. LCA results demonstrated that sugarcane cultivation was the most significant contributor to environmental impacts in all of the scenarios, other than the furfural production scenario in which a key step, a biphasic process with tetrahydrofuran solvent, had the most significant contribution.ConclusionOverall, the thermochemical routes presented environmental advantages over biochemical pathways on most of the impact categories, except for acidification and eutrophication. Of the investigated scenarios, furfural production delivered the inferior environmental performance, while methanol production performed best due to its low reagent consumption. The combined techno-economic and environmental assessments identified the performance-limiting steps in the 2G biorefinery design for sugarcane industry and highlighted the technology development opportunities under circular bioeconomy context.Electronic supplementary materialThe online version of this article (doi:10.1186/s13068-017-0761-9) contains supplementary material, which is available to authorised users.