ABSTRACT Second generation liquid biofuels from lignocellulosic feedstocks are part of a suite of solutions to peak oil and a safe climate economy. Biofuels have technological advantages over electrification for applications with minimal refuelling or recharging options such as air travel, shipping, agriculture and low or intermittent frequency trucking and rail. We examined a fuel production concept combining slow pyrolysis chars and superfine commutation. Char is micronised and suspended in diesel or water to create a reduced cost, quality and energy density liquid biofuel. Process yields and efficiencies were derived from a review of the slow pyrolysis char, coal commutation and combustion literature and used to develop theoretical estimates of process performance. Char structure and composition were also reviewed in the context of commutation and management of ash and alkalis in the fuel. The paper concluded that char based fuels had potential applications where cost was critical, but quality was not, such as diesel engines for agriculture, trucks, trains, shipping and backup electricity supply. Char water fuels increase safety by being non-flammable and are environmentally benign, a valuable trait in sensitive environments such as coastal shipping. © 2011 Curtin University of Technology and John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]