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.
