As the global demand for energy rapidly increases and fossil fuels will be soon exhausted, bio-energy has become one of the key options for shorter and medium term substitution for fossil fuels and the mitigation of greenhouse gas emissions. Biomass currently supplies 14% of the world's energy needs. Biomass pyrolysis has a long history and substantial future potential-driven by increased interest in renewable energy. This article presents the state-of-the-art of biomass pyrolysis systems, which have been-or are expected to be-commercialized. Performance levels, technological status, market penetration of new technologies and the costs of modern forms of biomass energy are discussed. Advanced methods have been developed in the last two decades for the direct thermal conversion of biomass to liquid fuels, charcoals and various chemicals in higher yields than those obtained by traditional pyrolysis processes. The most important reactor configurations are fluidized beds, rotating cones, vacuum and ablative pyrolysis reactors. Fluidized beds and rotating cones are easier for scaling and possibly more cost effective. Slow pyrolysis is being used for the production of charcoal, which can also be gasified to obtain hydrogen-rich gas. The short residence time pyrolysis of biomass (flash pyrolysis), at moderate temperatures, is being used to obtain a high yield of liquid products (up to 70% wt), particularly interesting as energetic vectors. Bio-oil can substitute for fuel oil- or diesel fuel-in many static applications including boilers, furnaces, engines and turbines for electricity generation. While commercial biocrudes can easily substitute for heavy fuel oils, it is necessary to improve the quality in order to consider biocrudes as a replacement for light fuel oils. For transportation fuels, high severity chemical/catalytic processes are needed. An attractive future transportation fuel can be hydrogen, produced by steam reforming of the whole oil, or its carbohydrate-derived fraction. Pyrolysis gas-containing significant amount of carbon dioxide, along with methane-might be used as a fuel for industrial combustion. Presently, heat applications are most economically competitive, followed by combined heat and power applications; electric applications are generally not competitive. Copyright (C) 2011 John Wiley & Sons, Ltd.