The oxygenated compounds in bio-oil can lead to several problems in its direct combustion, such as instability, low heating value, and high corrosiveness. Although higher water content can improve the flow properties and reduce NOx emissions in the fuel combustion process, it causes many more problems. It not only decreases the heating value of the fuel, but also increases the corrosion of the combustor and can result in flame-out. The low pH value of bio-oil also aggravates corrosiveness problems, which may lead to higher storage and transportation costs. Many researchers have tested the combustion of bio-oil in gas boiler systems, diesel engines, and gas turbines (Czernik & Bridgwater, 2004).

Fresh bio-oil from different feedstocks can generally achieve stable combustion in a boiler system. One problem, however, is the difficulty of ignition. The high water content of bio-oil not only decreases its heating value, but also consumes a large amount of latent heat of vaporization (Bridgwater & Cottam, 1992). Thus, the direct ignition of bio-oil in a cold furnace is not easy, and an external energy source is needed for ignition and pre-heating of the furnace. The combustion of bio-oil in diesel engines is more challenging. Its long ignition delay time, short burn duration, and lower peak heat release have limited its combustion properties (Vitolo & Ghetti, 1994). Experiments employing bio-oil in gas turbines have proved largely unsuccessful. The high viscosity and high ash content of bio-oil result in severe blocking and attrition problems in the injection system. Moreover, acid in the bio-oil is harmful to the mechanical components of the gas turbine.

Even though many combustion tests of bio-oil have shown its combustion performances to be inferior to those of fossil fuels, the environmental advantages of bio-oil utilization cannot be ignored. Comparative tests have shown that the SO2 emissions from bio-oil combustion are much lower than those from fossil fuel combustion.

Bio-oil is a mixture of many organic chemicals, such as acetic acid, turpentine, methanol, etc. Many compounds in bio-oil are important chemicals, such as phenols used in the resins industry, volatile organic acids used to produce de-icers, levoglucosan, hydroxyacetaldehyde, and some agents applied in the pharmaceutical, synthetic fiber, and fertilizer industries, as well as flavoring agents for food products (Radlein, 1999). Besides, bio-oil can also be used in a process that converts traditional lime into bio-lime (Dynamotive Corporation, 1995).