AbstractThis study explores an integrated biomass conversion system based on a common fast pyrolysis step and two subsequent bio‐oil upgrading pathways. The two options are bio‐oil thermochemical upgrading to drop‐in transportation biofuels through hydrotreating and hydrocracking, and bio‐oil electrochemical conversion for electrical power generation using a direct bio‐oil fuel cell method. The technoeconomic performances of biomass‐to‐biofuels and biomass‐to‐electricity pathways are first examined individually, and then integrated for the analysis of a hybrid biomass conversion system. A biomass facility of 2000 tonnes per day is investigated as a baseline. The minimum fuel‐selling price (MFSP) is estimated to be $ 2.48 per gallon, with biomass feedstock and other operating costs as major contributors. A very high minimum electricity‐selling price (MESP) of $ 5.36 per kWh is projected based on the current laboratory‐scale fuel cell configuration. Sensitivity analysis reveals that the effective reactant content in bio‐oil, the degree of oxidation, and the fuel cell system efficiency play key roles in the MESP. The estimate can be reduced to $ 0.96 per kWh if target values of the three parameters are met. The results of the hybrid system suggest that the MESP can be reduced substantially from $ 0.96 to $ 0 per kWh when the hybrid system increases the bio‐oil fraction for biofuel production from 0 to 75.8 %, given a biofuel MFSP of $ 3 per gallon.