Producing energy and higher value bio-products from waste wood recycled from construction and demolition (C&D) debris has been proposed as an economically viable opportunity in the biomass and bioenergy sectors. However, several challenges associated with the thermal conversion processes remain to be solved. This study introduces a 3D numerical simulation to study thermal conversion of wood chips. Combined biomass combustor, and indirect pyrolysis unit is used to create a self-sustainable biomass unit which does not rely on fossil fuel. Multizone heat distribution in the rotary kiln unit is investigated by employing CFD, an analytical algorithm and measurement tools in different zones of the equipment. A multizone heat transfer concept, the overall yield rate of biochar, thermochemical conversion of the bed, the volume shrinkage in the wood chips during the pyrolysis process, as well as biomass volatile and tar composition, and finally the potential of energy savings is widely investigated. CFD results and experimental evidence confirm that at least 31 % energy saving in drying zone can be achievable if drying and pyrolysis zone are separated in the indirect slow pyrolysis rotary kiln unit. The quality of biochar improved by 21 % increase in fixed carbon content and tar condensation is controlled.