AbstractThe Cauca River Valley region has traditionally been the main sugarcane production area for the sugar and ethanol industries in Colombia. This area is not expected to expand its agricultural frontiers, mainly due to social, geographic, and water limitations.This study is part of the Bioenergy Contribution of Latin America, the Caribbean and Africa to the Global Sustainable Bioenergy Initiative (LACAf) project, which assessed potential regions for the expansion of ethanol production in Colombia and Mozambique. Studies linked to the LACAf project have identified the Llanos Orientales (eastern savannas) region as the most appropriate option for sugarcane expansion in Colombia, due to its favorable climate and a significant amount of arable land available for agriculture. The main goal of this study was to assess the economic benefits and environmental impacts of several simulated ethanol biorefineries in the Llanos Orientales region. The study was performed using the Virtual Sugarcane Biorefinery, which allows the evaluation of integrated new alternatives for sugarcane and ethanol production. The results of this research showed that all the first‐ and second‐generation biorefineries assessed were profitable and attractive. Furthermore, the results of the simulations for the Lanos Orientales region have shown great potential for reducing environmental impacts compared to the current production in the Cauca River Valley. Consequently, the ethanol produced could qualify as ‘advanced’ in terms of the US Environmental Protection Agency criteria, and it meets the requirements of the European Parliament, representing a business opportunity to enter into the largest ethanol markets, and increasing biofuel production in Colombia. © 2018 Society of Chemical Industry and John Wiley & Sons, Ltd