As part of the JOULE-programme a project is underway with the aim of 1) generating performance, emission and cost data for flash pyrolysis oil (bio-fuel oil) utilisation schemes focusing on the market quality of the oil, 2) developing downstream units of oil production, improving the oil quality, and establishing fundamental understanding of biomass pyrolysis, and 3) establishing a network of potential oil producers and users. Both the use of bio-fuel oil for heating and as a fuel for diesel power plants are considered. Within the project, ENEL, ARUSIA and Union Fenosa are developing bio-fuel oil production in pilot-scale, and supply oil to utilisation tests. Further process development is carried out by VTT Energy on a PDU scale. Neste and Wartsila Diesel are developing boiler and engine use, respectively. Instituto Motori is generating basic combustion data for these applications. UCL and IWC are carrying on bench-scale work on improving oil quality. Finally, VTT, Neste, Union Fenosa and Finesport Engineering are assessing applications, and report on markets for bio-fuel oils in each country. Straw and pine wood have been pyrolysed in a bench-scale system with hot vapour filtration included. A modest decrease in oil yield resulted. Results so far are very encouraging, and scale-up of the system is underway. Drop tube furnace experiments have confined considerable differences between the behaviour of pyrolysis oils and conventional fuel oils in combustion. Bio-fuel oils have been employed as boiler fuel to replace light fuel oil. Behaviour of these oils under different storage conditions has been studied to be able to improve their stability.