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Twin-screw compressors are widely used in industry, especially in compressed air, refrigeration, air-conditioning and process gas which consume a significant part of the world’s energy. Nowadays, oil-injected compressors represent the majority of twin-screw compressors in the market due to their high efficiency and reliability. The oil-free compressor is potentially a better solution in the context of the net-zero CO2 target in 2050. However, due to its high thermal deformation and small clearances, this technology still suffers from reliability issues. To remedy this problem disruptive innovative solutions are required. In this purpose, the present study uses a systematic engineering design process to develop new concepts for the improvement of the oil-free twin-screw compressor. The paper is focused on the first two phases of the design process which are the definition of problem and the conceptual design. In the problem definition, main objectives are expressed and are divided into sub-objectives and weighed using an objective tree decomposition. Moreover, a thorough functional model of the oil-free compressor is detailed with a focus on the leakage paths and heat transfers. For the conceptual design, engineering characteristics extracted from the functional analysis have been assessed against the most important objectives using Quality Function Deployment matrices (QFD). Based on the developed problem definition, new concepts have been generated and three distinct concept categories have been further explored: Secondary flow; Surface features; Clearance control and monitoring. The evaluation, embodiment and detailed designs of the concepts, using experimental and numerical analyses will follow.