Pyrolysis oil from lignocellulosic biomass (bio‐oil) is a promising renewable energy carrier that can be utilized for the production of second‐generation drop‐in biofuels. Co‐processing bio‐oil with petroleum feeds in existing refinery processes, such as fluid catalytic cracking (FCC), has been proposed as a cost‐effective way of transitioning to the production of such biofuels without the need for significant capital‐intensive investments. Several routes are available for the production of bio‐oil, such as fast pyrolysis of biomass (raw bio‐oil), catalytic fast pyrolysis of biomass (catalytic pyrolysis oil, CPO), and fast pyrolysis of biomass followed by hydrogenation of the produced bio‐oil (hydrodeoxygenated oil, HDO). Research has shown that co‐processing raw bio‐oil is challenging but it can be carried out after adoption of appropriate reactor modifications in the commercial scale. A significant body of work has also focused on the co‐processing of HDO and CPO, and has demonstrated that these types of bio‐oil can be co‐processed with less operational issues. Co‐processing bio‐oil results in a liquid hydrocarbon product that contains only a small amount of oxygenates from bio‐oil. A noticeable increase in coke formation is also observed when bio‐oil is introduced in the FCC feed. However, this increase is lower than what would be expected from the conversion of the pure bio‐oil fraction. This has been attributed to the presence of the petroleum feed, which has a beneficial synergistic effect on the cracking of bio‐oil due to hydrogen donation reactions that inhibit coke formation and promote the conversion of the oxygenates to liquid hydrocarbons.This article is categorized under: Energy and Climate > Climate and Environment Bioenergy > Systems and Infrastructure Bioenergy > Economics and Policy