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Direct conversion of lignin into alkanes and methanol was carried out in a two-step process (hydrogenolysis and hydrogenation) involving initial treatment of white birch wood sawdust with H2 in dioxane/water/phosphoric acid using carbon supported Ru, Pd, Rh, or Pt as catalysts. The resulting monomers and dimers obtained by selective C-O hydrogenolysis were then hydrogenated in near-crit. water empolying Pd/C as the catalyst. The study is of interest with respect to prodn. of biofuel from lignin.