The requirement for sustainable development has prompted the researchers to explore solutions for better utilization of renewable energy resources in the future. Biomass is a promising resource and it can be converted to multiple products and services including fuels, chemicals, heat and electricity via different conversion routes. Hence, replacement of fossil-based services with biomass-based services is critical to mitigate fossil CO2 emissions, and innovative design of new and efficient energy conversion systems is necessary. Different industries need heat for their operations at different temperature levels. Today, these demands are satisfied using conventional natural gas boilers by imposing a CO2 tax to account for their emissions. In this study, we discuss the potential of replacing conventional boilers with a combined heat and fuel (CHF) plant design which utilizes lignocellulosic biomass in thermochemical conversion to generate heat for different industrial sectors together with biofuels cogeneration. Heat is generated due to the exothermic nature of the thermochemical conversion processes that operate at high temperatures. Gasification process produces syngas which is converted into fuels such as synthetic natural gas, Fischer-Tropsch crude, methanol and dimethyl ether and electricity. Different scenarios are evaluated considering the CO2 produced via this system is either released, sequestrated, or stored and used in a co-electrolysis unit in which surplus renewable electricity available during summer is converted into additional syngas. A parametric analysis has been performed considering type and size of plants, CO2 tax, and purchase and transportation costs of wood to compare the price of heat for the industrial sectors. Natural gas and wood boilers are used as the basis to calculate the breakeven CO2 tax values for the same heat prices for the proposed CHF systems. The results of this study present a state-of-the-art renewable energy system as an alternative to conventional boilers. (C) 2019 Elsevier Ltd. All rights reserved.