Production cost assessment was based on palm oil mill of 30 metrics tons FFB/h capacity that produced EFB residue at app. 20% wt of the initial FFB fed to the plant. The bio-oil plant will be located in the palm oil mill complex to eliminate the transportation cost of the EFB feedstock. The process included in this calculation is chopping, drying, grinding, pyrolysis, solid removal, bio oil recovery, and storage. The production cost is influenced by the amount of bio-oil production, material cost, operational cost including labor and utility cost. The sensitivity analysis shows that feedstock price drives the production cost. The result concludes that for the current condition, the bio-oil production cost from palm empty fruit bunch seems promising to be implemented in Indonesia. The best option is to have the bio-oil plant integrated with the palm oil mill, where in this case the EFB can be kept at no cost, off the market influence.