HTL, also called hydrous pyrolysis, is a process for the reduction of complex organic materi­als such as bio-waste or biomass into crude oil and other chemicals. It mimics the natural geological processes thought to be involved in the production of fossil fuels. HTL is one of the processes of a general term of TCC which includes gasification, liquefaction, HTL, and pyrolysis. There is a general consensus that all fossil fuels found in nature—petroleum, natural gas, and coal, based on biogenic hypothesis—are formed through processes of TCC from biomass buried beneath the ground and subjected to millions of years of high tempera­ture and pressure. In particular, existing theories attribute that petroleum is from diatoms (algae) and deceased creatures and coal is from deposited plants. Gasification of biomass produces a mixture of hydrogen and carbon monoxide, commonly called syngas. The syngas is then reformed into liquid oil with the presence of a catalyst. Pyrolysis is a heating process of dried biomass to directly produce syngas and oil. Both gasification and pyrolysis require dried biomass as feedstock, and the processes occur in an environment higher than 600oC. HTL involves direct liquefaction of biomass, with the presence of water and perhaps some catalysts, to directly convert biomass into liquid oil, with a reacting temperature of less than 400oC.

HTL has different pathways for the biomass feedstock. Unlike biological treatment such as anaerobic digestion, HTL converts feedstock into oil rather than gases or alcohol. There are some unique features of the HTL process and its product compared with other biological processes. First, the end product is crude oil which has a much higher energy content than syngas or alcohol. And second, if the feedstock contains a lot of water, HTL does not require drying as gasification or pyrolysis. The drying process typically takes large quantities of energy and time. The energy used to heat up the feedstock in the HTL process could be recovered effectively with the existing technology.

HTL may have two pathways from biomass to biofuel: (1) direct conversion of biomass or (2) pretreatment of biomass and then fermentation. For the biomass with little lignocellulosic fraction—such as waste streams from animal, human, and food processing—it can be directly converted into biofuel thermochemically. Pretreatment is currently a bottleneck in the conversion of cellulosic feedstock. HTL may hold a sub­stantially greater potential to shorten the fermentation time of lignocellulose. Traditionally, acid hydrolysis was commonly used to convert lignocellulosic materials to monosac­charides, but the high concentration of acids used in hydrolysis requires extensive waste treatment or recovery costs.