NOVELTY - Apparatus comprises a material processing chamber for torrefying water containing cellulose material cascading through the chamber, material supports, an outlet, an inlet, at least one fan, a burner and a heat exchanger. The chamber includes an upper drying zone and a lower torrefying zone in communication with the upper drying zone. The material supports are arranged within the zones for receiving the cellulose material cascading downwardly through each zone. The outlet is in communication with the processing chamber for exiting exhaust gas from within the processing chamber.    USE - The apparatus is useful for the torrefaction of cellulose containing material (claimed) such as hardwood or softwood to produce wood chips, where the apparatus rotating tray type apparatus.    ADVANTAGE - The apparatus precisely and accurately controls the drying and torrefaction of the wood under atmospheric pressure without controlling the final moisture content from the drying section such that the lignin present in the cellulosic material is neither broken down nor driven off, maintains carbon monoxide in the system rather than outside, easily adjusts the temperature and velocities of the heating medium, and retains he water evaporated from the processed material in the upper drying section to prevent the wood from burning at temperatures in which it the wood normally combust in air.    DETAILED DESCRIPTION - Apparatus comprises a material processing chamber for torrefying water containing cellulose material cascading through the chamber, material supports, an outlet, an inlet, at least one fan, a burner and a heat exchanger . The chamber includes an upper drying zone and a lower torrefying zone in communication with the upper drying zone. The upper drying zone removes water from the cellulosic material. The lower torrefying zone torrefies the cellulosic material received from the upper drying zone. The material supports are arranged within the upper drying zone and the lower torrefying zone for receiving the cellulose material cascading downwardly through each zone, where each material supports has an opening for the passage of material to process on the supports, and the material cascades downwardly through the processing chamber from one material support to another underlying material support. The outlet is in communication with the processing chamber for exiting exhaust gas from within the processing chamber. The exhaust gas includes steam formed in the upper drying zone and at least one volatile gas component formed in the lower torrefying zone. The steam at least partially provides an inert atmosphere within the processing chamber. The inlet is in communication with the processing chamber. The fan within the processing chamber circulates heated gas over the material processed with the material supports in the upper drying zone and the lower torrefying zone. The burner is in communication with the at least one volatile gas component of the exhaust gas from the outlet for creating combustion gas by combustion of at least a portion of the at least one volatile gas component. The heat exchanger is in communication with the combustion gas from the burner and the exiting exhaust gas from the processing chamber for heating at least a portion of the exiting exhaust gas for recycling to the processing chamber through the inlet. An INDEPENDENT CLAIM is included for torrefying material containing cellulose and water, comprising using the apparatus for drying the material in the upper drying zone and torrefying the material dried in the upper drying zone in the lower torrefying zone.