Although it is expected that torrefaction of empty fruit bunch (EFB) from Malaysian palm oil mill will provide a useful energy recovery source, a detailed analysis of the process has not yet been conducted. In this study, a process evaluation is made for the three cases of palm mill EFB torrefaction in terms of energy and operating cost. Most of the energy requirement for the torrefaction is heat needed for EFB drying and heat of reaction for the torrefaction. In the first case all the heat is supplied by heavy oil. In the second case flue gas from a palm oil mill boiler is employed for drying. In the third case Vapor Re-Compression (VRC) for heat recovery is employed in the drying process. Mass and energy balance calculations reveal that energy saving by VRC largely improves the energy efficiency. In spite of the initial cost increase and electricity cost requirement, the VRC process results in the lowest unit cost of the torrefied product due to the large reduction of heavy oil consumption.