The industrial effluents should be properly treated in order to control the environmental pollution. The industrial effluent often contains toxic materials like suspended solids and soluble organic compounds, heavy metals, cyanides, non-biodegradable chemical and volatile materials like H2 S and SO2 etc. The soluble organic compounds undergo slow decomposition resulting in oxygen depletion and production of noxious gases. The heavy metals and other toxic organic materials such as chlorinated compounds in effluents from paper industry have adverse effects on the aquatic flora and fauna. The high levels of nitrogen and phosphorus causes eutrophication which leads to undesirable algal growth and death of animals due to lack of oxygen.

Biotechnolgical techniques are being used to address some of these problems. The biological treatment of effluents has been in use for quite sometime in many countries around the world. However some specific problems which are related to conventional treatment are being solved using biotechnology. Among the substances released in effluents are calcitrants which can not be degraded using conventional treatment methods. Biotechnology helps in overcoming this problem. In USA, the company BioTechnica is using lignin degradation for the treatment of substances like polychlorinated biphenyls (PCBs) and dioxin. In Europe, ICI and Ciba-Geigy are working on enzymatic detoxification (breaking down) of substances such as cyanides and also the byproducts from the synthesis of S-triazine herbicides. Microbial transformation of certain substances such as dibenzofurans, biarylketones halogenated bibenzodioxins etc are used to minimize the problem of pollution due to toxic effluents. E.g. certain strains of Pseudomonas have been isolated which selectively deoxygenate the 1,2 positions of substituted biarylethers and biarylketones. Microbial degradation of chloro-, dichloro-, and carbontetra-chloride etc is being also tried to deal with the problem.
The paper and pulp industries release effluents which contain chromophoric compounds and chlorogenated organic materials like chlorolignins, chlorosyringols, chloroaliphatics, catechols etc. which can affect the aquatic system by their inhibitory and mutagenic activities. Certain soil-inhabiting fungi, streptomycetes, bacteria and white rot fungi (Ganoderma lacidum, Coriolus (Trametes) versicolor, P. chrysosporium, Coprinus macrorhizus, Hericium erinaceus etc. have been studied for their ability to decolourise chromophoric substrates. White rot fungi produces a variety of lignin-degrading enzymes (e.g. peroxidases and lacasses) that degrade phenolic substances.