The availability of compact and cost-efficient solutions for sustainable production of platform chemicals and higher value compounds is essential for renewables to become Europe’s dominant primary carbon source. NoviCo will contribute to achieve EU’s ambitious objectives, by providing an innovative technological solution for the sustainable and socially acceptable conversion of low-value lignocellulosic residues, such as thinnings, sawdust into biobased chemicals and materials precursors. The core of NoviCo is the separation and functionalization of lignin from lignocellulose, specifically from pine and spruce. The former step consists of ionic-liquid based extraction. Functionalization by electrochemical oxidation and fungal conversion will be explored with respect to conversion, yield of valuable products, and complexity of product mix. Promising results can widen the feedstock portfolio to agricultural residues. The experimental work will be complemented by evaluating integration options for those processes into established and new biorefinery infrastructure. Efficient, compact, and safe processes will be developed, operating at mild conditions, and targeting high carbon yields. The experimental development is supported by a broad sustainability analysis including economic feasibility, environmental footprint and impact on society, innovation potential, and development in rural areas with high biomass availability. NoviCo will validate the new technology at lab-scale (TRL2-3), using an integrated approach covering the entire process and variable feedstock, minimising separation costs, and increasing resource and carbon efficiency. The lab-scale process developed will be the prototype for a future production system of biobased chemicals. The NoviCo consortium provides complimentary world-class expertise along the entire value chain and a strong commitment to maximise wide dissemination, communication, and exploitation of the results through industrial implementation.