What is disclosed is a biorefining process and system including the steps of extracting, hydrolyzing, and/or digesting a lignocellulosic biomass feedstock, or a component thereof, with a liquid or vapor solution comprising reactant sulfur dioxide or a derivative thereof, to generate cellulose-rich solids and an intermediate liquid stream; combusting or gasifying a sulfur-containing fuel to generate heat and an exhaust gas stream comprising produced sulfur dioxide; contacting the exhaust gas stream with the intermediate liquid stream to dissolve the produced sulfur dioxide into the intermediate liquid stream; and then recycling the intermediate liquid stream to reuse the produced sulfur dioxide as the reactant sulfur dioxide. The sulfur- containing fuel may be sulfonated lignin generated by reaction of lignin (derived from the feedstock) with the reactant sulfur dioxide, resulting in a closed loop for sulfur dioxide in the biorefmery.