Pellet fuels (or pellets) are biofuels made from compressed organic matter or biomass. Pellets can be made from any one of five general categories of biomass: industrial waste and co-products, food waste, agricultural residues, energy crops, and virgin lumber. Wood pellets are the most common type of pellet fuel and are generally made from compacted sawdust and related industrial wastes from the milling of lumber, manufacture of wood products and furniture, and construction. Other industrial waste sources include empty fruit bunches, palm kernel shells, coconut shells, and tree tops and branches discarded during logging operations. So-called "black pellets" are made of biomass, refined to resemble hard coal and were developed to be used in existing coal-fired power plants. Pellets are categorized by their heating value, moisture and ash content, and dimensions. They can be used as fuels for power generation, commercial or residential heating, and cooking. Pellets are extremely dense and can be produced with a low moisture content (below 10%) that allows them to be burned with a very high combustion efficiency.

Further, their regular geometry and small size allow automatic feeding with very fine calibration. They can be fed to a burner by auger feeding or by pneumatic conveying. Their high density also permits compact storage and transport over long distance. They can be conveniently blown from a tanker to a storage bunker or silo on a customer's premises.

Pellets are produced by compressing the wood material which has first passed through a hammer mill to provide a uniform dough-like mass. This mass is fed to a press, where it is squeezed through a die having holes of the size required. The high pressure of the press causes the temperature of the wood to increase greatly, and the lignin plasticizes slightly, forming a natural "glue" that holds the pellet together as it cools.

High-efficiency wood pellet stoves and boilers have been developed in recent years, typically offering combustion efficiencies of over 85%. The newest generation of wood pellet boilers can work in condensing mode and therefore achieve 12% higher efficiency values.

Emissions such as NOx, SOx and volatile organic compounds from pellet burning equipment are in general very low in comparison to other forms of combustion heating. (Wikipedia)