This paper presents and evaluates different energy efficient options for integrating drying and pelletising of biofuel with a modem energy efficient pulp mill process. When drying biofuel, a large amount of the heat input can often be recovered. One option for heat recovery is to cover low-temperature heat demand in the pulping process. Alternatively available excess heat from the pulp mill can be used for drying. Both alternatives will contribute to a better energy efficiency for the combined pulp mill and biofuel upgrading facility. Pinch analysis tools can be used to estimate the excess heat potential at different temperature levels in the pulp mill. Three different technologies for pulp mill integrated biofuel drying were chosen for the study, namely steam drying, flue gas drying and vacuum drying. The different technologies are evaluated on the basis of energy usage, global CO2 emissions and resulting pellets production cost, using stand-alone pellets production as a reference. The pulp mill assumed for the calculations is the Eco-Cyclic reference pulp mill. The results of the study indicate that the most attractive integrated drying technology option is the flue gas dryer, using flue gases from the black liquor boiler. With the available flue gas stream at the reference pulp mill, a potential pellets production of 70,000 ton/yr could be achieved at a cost of 24.6 E/ton. The associated reduction in CO2 emissions compared to stand-alone pellets production is 31-36 kg/MWh(pellets). (C) 2005 Elsevier Ltd. All rights reserved.