In a method and apparatus for thermal processing of catalytically active biomass, the biomass is subjected in a receiving tank to a cracking temperature to undergo a cracking reaction. The biomass is transferred to a mixer pump to produce a reaction mixture which is directed into an outgassing chamber of an intermediate tank to produce an outgassed fraction and a non-outgassed liquid fraction. The outgassed fraction to produce fuel is cooled down, and a first portion of the non-outgassed liquid fraction is returned and subjected again to the cracking temperature in the receiving tank. A second portion of the non-outgassed liquid fraction is conducted in a bypass to the outgassing chamber of the intermediate tank for outgassing while fresh biomass is added. Residual matter settling in the intermediate tank is periodically removed.