The combustion of plant oils in diesel engines, whether or not after esterification to “biodiesel”, is possible but for the future less desirable because they are derived from food crops (first generation biofuels). Fast pyrolysis liquids derived from ligno-cellulosic materials (second generation biofuel type), are superior in terms of sustainability. Combustion in prime movers like turbines or engines is however still troublesome, although demonstrated already on a significant scale. The aim of the project is to adapt a diesel engine and a micro gas turbine to enable the combustion of various bio-liquids including pyrolysis oils and blends. A relatively high electric efficiency can be achieved in comparison to other prime movers (like a gas engine) and, in this case, on the small to medium scale (50 –1000 kWe). The micro gas turbine and diesel engine should be part of a Combined Heat & Power (and Cooling) system. The project focuses on the required modifications of the engine/turbine, fuel preparation, and emission control (especially NOx). Besides, an assessment will be made of market potential, implementation barriers and sustainability, both for the EU and Russia. Diesel engine combustion of fast pyrolysis oil has been part of earlier EU projects. Unfortunately the success was insufficient due to a lack of involvement of real engine researchers who could develop new engine components. This problem is solved now, a.o. by the participation of a well established, large engine research institute in Moscov. A consortium is created of six complementary partners, including two small industries (SME’s), two big research institutes with established connections to large industries, and two universities. To enhance the communication between EU and Russian partners, one of the SME’s being established in The Netherland but owned by persons of Russian origin, will act as a liaison.