NOVELTY - Method for production of peat-based fuel, involves mixing dry biomass with peat, where the dry matter content of the mixture is high enough for aerobic microorganisms to function, extruding the mixture into pieces, collecting the pieces to a pile, arranging suitable ventilation and preservation of heat in the pile for functioning of aerobic microorganisms for raising the temperature of the pieces and achieving biological drying as well as removal of the moisture evaporated from the pieces, and maintaining biological aerobic drying to dry matter content.    USE - The method is useful for production of peat-based fuel (claimed).    ADVANTAGE - The method produces less peat dust to the environment and peat sludge drifted into the water systems is produced in comparison with the conventional methods. The method reduces the formation of nitrogen oxides in combustion as small amount of water is present in the fuel or in the utilization of the produced material for manufacturing bioethanol or biodiesel. The method replaces the loss of energy of peat in drying process. The fuel value is excellent compared with other corresponding fuels. The combustion temperature is raised which increases energy efficiency and decreases the amount of ash produced during combustion. The transportation cost is reduced in the production and utilization of the fuel.    DETAILED DESCRIPTION - Method for production of peat-based fuel, involves mixing (2) dry biomass with peat, where the dry matter content of the mixture is high enough for aerobic microorganisms to function, extruding (3) the mixture into pieces, collecting (4) the pieces to a pile, where the pile is covered with wide fitting such that there is a wide enough space between the cover and the pile for ventilation, arranging suitable ventilation and preservation of heat in the pile for functioning of aerobic microorganisms for raising the temperature of the pieces and achieving biological drying as well as removal of the moisture evaporated from the pieces, and continuously maintaining biological aerobic drying (5) to dry matter content, preferably 60-70%. The peat is lifted from a bog (1) for supplying into production process.    DESCRIPTION OF DRAWING(S) - The drawing shows a flow chart illustrating the steps involves in production of peat-based fuel.    Lifting of peat from bog (1)    Mixing of dry biomass with peat (2)    Extrusion of mixture into pieces (3)    Collection of pieces in pile (4)    Maintaining and continuation of biological drying (5)