Abstract An experimental plasma-chemical reactor equipped with a novel hybrid gas–water stabilized torch is available at IPP Prague for the innovative and environmentally friendly plasma treatment of waste streams with a view to their sustainable energetic and chemical valorization and to a reduction of the emission of greenhouse gases. Gasification/pyrolysis of biomass was experimentally studied using crushed wood as a model substance. The experimental results demonstrate homogeneous heating of the reactor volume and proper mixing of plasma with treated material in spite of the low plasma mass flow rate and constricted plasma jet. The conditions within the reactor ensure complete destruction of the tested substance. The economical viability, environmental performance and safety of biofuels/hydrogen produced from syngas resulting from the plasma-thermochemical gasification of a very broad range of second generation biomass feedstock will be investigated. The performance of several types of plasma torches and of possible combinations of torches will be compared. The final biofuels will be tested in the existing Internal Combustion Engine (ICE) test stands.