Hydrothermal liquefaction (HTL) refers to the conversion of carbonaceous resources into oily substances in hot pressurized liquid water.

The objective of this paper is to address the issue of the production cost of second generation biofuels via the thermo-chemical route. The last decade has seen a large number of technical–economic studies of second generation biofuels. As there is a large variation in the announced production costs of second generation biofuels in the literature, this paper clarifies some of the reasons for these variations and helps obtain a clearer picture. This paper presents simulations for two pathways and comparative production pathways previously published in the literature in the years between 2000 and 2011. It also includes a critical comparison and analysis of previously published studies. This paper does not include studies where the production is boosted with a hydrogen injection to improve the carbon yield. The only optimisation included is the recycle of tail gas. It is shown that the fuel can be produced on a large scale at prices of around 1.0–1.4 € per l. Large uncertainties remain however with regard to the precision of the economic predictions, the technology choices, the investment cost estimation and even the financial models to calculate the production costs. The benefit of a tail gas recycle is also examined; its benefit largely depends on the selling price of the produced electricity.

This paper addresses the techno-economic evaluation and optimisation of processes converting lignocellulosic biomass into liquid fuels, through the development of a suitable framework and the modelling and design of Biomass to Liquids (BTL) processes. In particular, the focus is on the production of drop-in fuels through gasification and Fischer–Tropsch (FT) synthesis. Several conversion technologies are presented and evaluated in the literature, but the comparison of different options is hazardous because of the different assumptions and methodologies adopted in each study. A systematic and consistent approach is therefore developed to explore the trade-offs of alternative process configurations and of the operating conditions. The comparison presented in this study explores the trade-offs of different technological options in terms of competing economic and thermodynamic objectives. Results show that for 200 MW_th biomass input plant capacities, production costs are in the range of 1.0–1.4 € l⁻¹ for technologies producing up to about 0.5 kJ_FT kJ_th ⁻¹ and close to being neutral in terms of electricity balance. For technologies using electrolysis the conversion can increase to 0.8 kJ_FT kJ_th ⁻¹ with production costs of 1.8 € l⁻¹. The electricity storage capacity, in this case, is of 0.5 kJ_e kJ_FT ⁻¹, corresponding to a net electricity requirement of about 0.4 kJ_e kJ_th ⁻¹.