In industrialized countries, it is expected that the future generation of bioenergy will be from the direct combustion of residues and wastes obtained from biomass. Bioenergy production using woody biomass is a fast developing application since this fuel source is considered to be carbon neutral. The harnessing of bioenergy from these sources produces residue in the form of ash. As the demand for bioenergy production increases, ash and residue volumes will increase. Major challenges will arise relating to the efficient management of these byproducts. The primary concerns for ash are its storage, disposal, use and the presence of unburned carbon. The continual increase in ash volume will result in decreased ash storage facilities (in cases of limited room for landfill expansion), as well as increased handling, transporting and spreading costs. The utilization of ash has been the focus of many studies, hence this review investigates the likely environmental and technological challenges that increased ash generation may cause. The presence of alkali metals, alkaline earth metals, chlorine, sulphur and silicon influences the reactivity and leaching to the inorganic phases which may have significant impacts on soils and the recycling of soil nutrient. Discussed are some of the existing technologies for the processing of ash. Unburned carbon present in ash allows for the exploration of using ash as a fuel. The paper proposes sieve fractionation as a suitable method for the separation of unburnt carbon present in bottom ash obtained from a fixed-bed combustion system, followed by the application of the gasification technology to particle sizes of energy importance. It is hoped that this process will significantly reduce the volume of ash disposed at landfills.