This paper examines the history, methods, costs, and future prospects of Cuba's attempts to develop the energy potential of sugarcane. An overview of the main factors affecting the current sugarcane agro-industry in Cuba is provided, along with an analysis of why, despite attempts by the Cuban government to revive the country's sugarcane agro-industry, the industry continues to decline. The prevailing conditions and degree of modernization in Cuban sugar factories are evaluated. The sugar-agro industry's main production bottlenecks are studied. The fall in sugarcane yield from 57.5 ton/ha in 1991 to 22.4 ton/ha in 2005 and its relation to land use is explained. The socio-economic impact of the sugarcane agro-industry's downsizing is assessed. The governmental and quasi-governmental entities in charge of sugarcane energy use development and the country's legal framework are analyzed. The Cuban sugarcane agro-industry's opportunities in the growing international biofuels and bioenergy market are evaluated. To situate Cuba within the global bioenergy market, international best practices relating to the production and commercialization of biofuels are examined to determine the degree to which these experiences can be transferred to Cuba. The analysis of the Cuba sugar industry's biofuel potential is based on a comparative technical-economic assessment of three possible production scenarios: (1) the current situation, where only sugar is produced; (2) simultaneous production of sugar-anhydrous ethanol; and (3) production of sugar-ethanol and simultaneous generation of surplus electricity exported to a public grid. Some of the key assumptions underlying these analyses are as follows: Ethanol production and operation costs for a 7000 ton/day-sugar mill are estimated to be 0.25 and 0.23 USD/l, respectively. The influence of gasoline prices on sugar-ethanol production is also assessed. The kWh production and operation costs starting from sugarcane bagasse are estimated at 0.06 and 0.04 USD, respectively. Cuba's potential Sugarcane cogeneration capacity is estimated to be 9006 GWh/year. Investment-profit analyses are offered for two scenarios: annexing a 300,000 l/day distillery to a sugar mill, and enlarging the cogeneration capacity of a 7000 ton/day mill. Added production cost/added-value analysis was carried out. The main environmental issues associated with sugarcane-based fuel production are also analyzed. (C) 2008 Elsevier Ltd. All rights reserved.