TECHNOLOGY FOCUS - BIOTECHNOLOGY - Preferred Process: The process (P1) further comprises: recovering volatile products from the vapor phase; and converting the bioreactor back to aerobic conditions, where the process is performed repeatedly, and the fermentation rates are enhanced by pretreating the lignocellulosic biomass. The process is a solid-state fermentation. In the process, the fermentation is performed at at least 37 degrees C. The process (P2) further comprises removing the inhibitor and introducing sufficient oxygen into the bioreactor to establish aerobic conditions, where the process is performed repeatedly. In the process (P2): the wood-rot fungus of the phylum Basidiomycota is cultured in conjunction with at least one fungus that is a member of the Saccharomycetales order of Ascomycota. Preferred Components: The wood-rot fungi include a species within the genus Phanerochaete, Coprinopsis. The mitochondrial inhibitor is a gas. The Saccharomycetales fungi are of the genus Saccharomyces and Kluyveromyces. The members of the wood-rot fungus of the phylum Basidiomycota and the fungus that is a member of the Saccharomycetales order of Ascomycota have differing substrate preferences enabling more complete biomass utilization. EXAMPLE - Phanerochaete chrysosporium was grown from conidiospores in submerged liquid culture. The growth medium was Highley's Basal salts and was supplemented with 0.1% yeast extract and 2% glucose. Conidiospores were inoculated in liquid medium in 3 neck flasks. The temperature was maintained at 37 degrees C. The cultures were mixed using magnetic stir bars and gasses (air, nitrogen, and air supplemented with nitric oxide (NO)) were bubbled through the medium using stainless steel needles. The fungi were grown aerobically, anaerobically and aerobically with NO delivered to a target concentration of 1 mu M. Phanerochaete chrysosporium grew rapidly forming large, encapsulated masses of material. No ethanol was observed in the aerobic culture.