Wood pellets are compressed biofuel generally produced of sawdust. Wood pellets are a modern form of heating fuel which has more potential to reduce CO2 emissions. Wood pellets are cylindrical in shape, usually measure between 6-10mm in diameter and are 10-30mm long. Wood pellets moisture content is less than 10% that allows them to be burned with very high combustion efficiencies.

Biomass (shaving) is milled onto fine sawdus and then fed into a pelletising machine (granulator) where it is compressed under immense pressure and extruded through a die. This process is accompained by lignin melting, contained in the biomass, which serves as a binding matergial forming the pellets as they dry. The glaze observed on the exterior of the pellets is also the result of lignin melting. The process of forming pellets is called extrusion. When pelleting sawdust raises its temperature to 90oC. When producing wood pellets no additives are used. After cooling the pellets are either bagged or loaded into container lorries for bulk distribution.

Wood pellets as biomass are basically used for residential heating and burned in high efficiency stoves, fireplaces, and central heating systems. There is very little ash from burning premium wood pellets.