In a method and apparatus for thermal processing of slurry, the slurry is combined with a bio-mass to produce a mixture which is then subjected to a cracking temperature in a receiving tank, thereby liquefying and allowing the mixture to catalytically undergo a cracking reaction. The cracking reaction which the liquefied mixture undergoes is continued in a mixer pump to thereby produce a reaction mixture. The reaction mixture is outgased in an intermediate tank to separate an outgased fraction from a non-outgased fraction. Subsequently, the outgased fraction is allowed to cool down, thereby producing fuel, while the non-outgased fraction is returned to the receiving tank and subjected again to the cracking temperature. Residual matter of the non-outgased fraction settles in the intermediate tank and is periodically removed.