A summary is presented on the developments in the state of the art of experimental direct liquefaction of biomass, and the technoeconomic studies carried out within the IEA Biomass Agreement liquefaction activities from 1983 to 1991. The objectives of the study are: to identify potential improvements in developing process concepts, and to evaluate technically and economically the processes in direct thermal liquefaction. The principal instrument utilized in assessing the new technologies was a technoeconomic assessment. A standard procedure was constructed. Balances were calculated for a 1000 dry t/d plant size. Feedstocks included wood, peat, and straw. The thermal efficiency in the fuel oil substitute and gasoline production from woody biomass is above 60 % and 50 %, respectively. At a wood cost of US$ 30/wet t (US$ 3.4/GJ), and with a capital recovery factor of 0.12, a fuel oil substitute could be produced at US$ 8/GJ. The estimated cost for the least expensive transportation fuel process would be US$ 12/GJ. Areas where more research is needed are highlighted.