Bio-oil produced by fast pyrolysis is very viscous, highly acidic and does not ignite easily as it contains a substantial amount of structural water. To circumvent these problems pyrolytic bio-oil was emulsified in No. 2 diesel fuel. In the current investigation, very heavy fractions of bio-oil were removed from bio-oil by centrifugation prior to emulsification. Emulsions so produced can be very stable depending on processing conditions. A series of emulsification runs was carried out to determine the relationship between process conditions, emulsion stability and processing costs. Of five process variables examined (temperature, residence time, bio-oil concentration, surfactant concentration and power input per unit volume) only the last three had. significant effects on emulsion stability. The tests showed there were optimal operating conditions that produced stable emulsions. The formation of stable emulsions required surfactant concentration ranging from 0.8 to 1.5 wt% of total, depending on bio-oil concentration and power input. The costs of producing stable emulsions using Hypermers (commercial surfactants) were unacceptably high, ranging from 5.2 cents/L for 10% emulsion to 8.9 cents/L for 30% emulsion. However, when the cost of a newly developed proprietary CANMET surfactant was assumed, they could be reduced to 2.6 cents/L for 10% emulsion, 3.4 cents/L for 20% emulsions and 4.1 cents/L for 30% emulsions, respectively. Fuel properties such as heating values, cetane number, viscosity and corrosivity were characterized. The heating value of centrifuged bio-oil was about one third of that of No. 2 diesel, reducing the heating values of emulsions accordingly. A cetane number of pyrolytic bio-oil was 5.6. Emulsion viscosities, particularly in the 10-20% bio-oil concentration range, are substantially lower than the viscosity of bio-oil itself, making these products very easy to handle. The viscosity of emulsion fuels was best described by Einstein's equation for dilute solid dispersions. The corrosivity of emulsion fuels defined by the weight loss of steel is about half of the bio-oil alone. Crown Copyright