The current or “conventional” paradigm for producing process energy in a biorefinery processing cellulosic biomass is on‐site energy recovery through combustion of residual solids and biogas generated by the process. Excess electricity is then exported, resulting in large greenhouse gas (GHG) credits. However, this approach will cause lifecycle GHG emissions of biofuels to increase as more renewable energy sources (wind, solar, etc.) participate in grid‐electricity generation, and the GHG credits from displacing fossil fuel decrease. To overcome this drawback, a decentralized (depot‐based) biorefinery can be integrated with a coal‐fired power plant near a large urban area. In an integrated, decentralized, depot‐based biorefinery (IDB), the residual solids are co‐fired with coal either in the adjacent power plant or in coal‐fired boilers elsewhere to displace coal. An IDB system does not rely on indirect GHG credits through grid‐electricity displacement. In an IDB system, biogas from the wastewater treatment facility is also upgraded to biomethane and used as a transportation biofuel. The GHG savings per unit of cropland in the IDB systems (2.7–2.9 MgCO2/ha) are 1.5–1.6 fold greater than those in a conventional centralized system (1.7–1.8 MgCO2/ha). Importantly, the biofuel selling price in the IDBs is lower by 28–30 cents per gasoline‐equivalent liter than in the conventional centralized system. Furthermore, the total capital investment per annual biofuel volume in the IDB is much lower (by ~80%) than that in the conventional centralized system. Therefore, utilization of biomethane and residual solids in the IDB systems leads to much lower biofuel selling prices and significantly greater GHG savings per unit of cropland participating in the biorefinery system compared to the conventional centralized biorefineries.