Processes for the production of polyols from sources such as dried distillers grains plus solubles (DDGS) make use of a two-stage reaction scheme. In the first stage, the proteinaceous starting material is reacted with an aminating agent, such as diethanolamine (DEOA), to generate amino-amides and amides. These products are then reacted with an alkoxylating agent, preferably a substituted or unsubstituted epoxide to yield polyols. These polyols may be further reacted with isocyanates to give low-cost rigid polyurethane foams. In alternate forms, lignin may be directly converted to polyols by reaction with an alkoxylating agent, optionally followed by reaction with an isocyanate to produce polyurethanes.

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