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Given the high temperatures (>500°C) involved in creating pyrolysis oil (not exactly the same as diesel: https://en.wikipedia.org/wiki/Pyrolysis_oil ), I don't see why there could be a hygienic concern regarding to the process itself. The problems will be in transport&storage and I guess that given the high volume to low weight ratio of such waste, it will not be economic to use such material as the feedstock for a pyrolysis plant.