This is a review of work on the potential of biorefineries. First, it considers the concept of a refinery, the differences between biomass and oil, and the advantages of a biorefinery over a refinery. It goes on to describe the bio‐based economy and biorefinery concepts, and to discuss its origin as a promising alternative to dependence on non‐renewable feedstocks. It provides an exhaustive description of the classification of biorefineries, considering aspects such as systems, technological implementation status, size, feedstocks, platforms, products, and conversion processes. It outlines the main methodologies for designing biorefineries – conceptual design, optimization, and the ‘early stage’ method. Methodologies for the economic, environmental, and social assessment of a biorefinery are presented. Finally, challenges linked to the implementation of biorefinery projects at industrial level are discussed. The authors conclude that the methodologies of conceptual design and optimization must complement each other to achieve a robust design from a conceptual and mathematical point of view. © 2018 Society of Chemical Industry and John Wiley & Sons, Ltd.