Strong dependence on imported energy sources, growth of fossil fuel and electricity prices, and environmental concern are the main reasons for the increased use of the new renewable energy technologies in the Latvian energy sector. The collective target that is set for the member states of the European Union for renewable energy usage is defined in Directive 2009/28/EC. The Directive states that the Latvian goal for the share of renewable energy sources in the transport end-use is 10 % by the year 2020. Fast pyrolysis is one of the most perspective route for production of liquid fuel from solid biomass. The aim of the study is to understand which steps of biomass pyrolysis resulted in the highest energy or mass conversion losses. The research was done base on the theoretical mass and energy transfer process for 1 kg of wood biomass conversion during biomass drying, fast pyrolysis and bio-oil improvement process. The results show that obtained biofuel mass is 5.4 times smaller than the mass of process feed materials. The same calculation of energy balance shows that decrease of energy value is small. These results are based on the fact, that fast pyrolysis process is a physical state change process with mass decrease and in the same time with energy density increase in biofuel.