As a promising sludge handling alternative capable of utilizing the secondary energies in industrial environments, we investigated the use of a novel pilot-scale cyclone dryer for processing industrial mixed sludge from the forest industry. Attainable sludge dry solids contents (%) and respective specific energy consumption of drying (kWhkg-1H2O) were successfully modelled by response surface methodology based on a constructed design of experiments. Predicted sludge dry solids and the specific energy consumption of drying varied between <30-65% and <0.4-1.8kWhkg-1H2O depending on controlled inlet air temperature, sludge feeding rate and humid air recirculation levels. The response models were further optimized for efficient combustion of processed sludge with inlet air temperatures corresponding to potentially available secondary heat. According to the results, energy efficient drying of mixed sludge with a specific energy consumption <0.7kWhkg-1H2O can be performed with inlet air temperatures ≥60°C corresponding with pilot-scale feeding capacities between 300-350 and 550kgh-1 depending on inlet air temperature. These findings suggest that the introduction of novel drying systems capable of utilizing the available secondary energies of industrial environments could significantly improve the energy efficiency of sludge drying and potentially allow considerable cost savings for industrial operators.