Bio-oil is a renewable, which is produced from biomass through a process known as fast pyrolysis. Fast pyrolysis represents a potential route to upgrade the biomass to value added fuels and renewable chemicals. There is an urgent need to develop a sustainable energy supply as the impact of burning fossil fuels on our climate is becoming ever more obvious and the availability of fossil fuels is decreasing. Bio-oil contributes to the reduction of greenhouse gas emissions and it offers several advantages, as it is easy to use, to store, and to transport. Bio-oil that can be extracted from dried biomass including dried oil palm wastes is currently under investigation as a substitute for petroleum [65]. Bio-oil contains fragments of cellulose, hemicelluloses, lignin, and extractives and they are typically brown liquids with a pungent odor. For woody feedstocks, temperatures around 500°C together with short vapour residence times are used to obtain bio-oil yields of around 70%, and char and gas yields of around 15% each [66]. Bio-oil is a high density oxygenated liquid, which can be burned in diesel engines, turbines or boilers, though further work is still required to demonstrate long term reliability [67]. It is also used for the production of speciality chemicals, currently mainly flavourings. Renewable resins and slow release fertilisers are other potential applications, which have been the subject of research [68]. At this stage, fast pyrolysis is a novel and relatively untested technology. There are several pilot plants in North America and Europe, but no consistent track record yet outside of the manufacture of flavourings.

To date, fast pyrolysis of biomass has received very limited attention by researchers in Malaysia. Normally, fibre and shells are burnt in the palm oil processing plants to generate fuel to produce power for running the mill (self-sufficient) [13,69]. So far, research involving fast pyrolysis has been carried out by Universiti Teknologi Malaysia and Universiti Malaya on oil palm shell, rubber waste and rice husk waste, scrapped tyres and tubes [70-74]. One of the authors of this book and the research group from MPOB investigated on the fast pyrolysis of empty fruit bunches (EFB) [75,76].

The utilisation of bio-oil derived from pyrolysis process of oil palm wastes to substitute for synthetic phenol and formaldehyde in phenol formaldehyde resins is possible. Phenol can be used to manufacture moulding products for automotive parts, household appliances, and electrical components; in bonding and adhesive resins for laminating, plywood, protective coating, insulation materials, abrasive coating; in foundry industries for sand moulds and cores. However, producing resins from bio-oil has received very limited attention by researchers in Malaysia and still in research stage. A group of researchers from Universiti Teknologi Malaysia had studied the extraction of phenol from oil palm shell bio-oil [77]. They found that the quantity of phenol in the extracted oil was 24.2 wt% of total extracted oil.

In 2005, with the co-operation between Malaysian based Genting Sanyen Bhd and BTG Biomass Technology Group BV from The Netherlands, the first commercial bio-oil plant has already started production in Malaysia on a scale of 2 t/hr [78,79]. The main achievements of this project are more than 1,000 tonnes of bio-oil have been produced, the bio-oil is co-fired, replacing conventional diesel in a waste disposal system located 300 km from site, maximum capacity of the plant so far is about 1.7 t/hr on a daily continuous basis, the bio-oil quality can be controlled by the operating conditions, the drying of EFB to 5 wt.% moisture is possible using the excess heat from the pyrolysis process, the energy recovered from the process can be used effectively for drying the wet EFB, and potentially to generate the electricity required. Indeed, this is a breakthrough step in Malaysia for the utilisation of oil palm wastes as a source of bio-oil [80].