Pellet fuel is a type of solid biomass fuel made by compressing organic materials, most commonly sawdust and wood waste, into small, dense cylinders. These pellets are typically 6 to 12 millimeters in diameter, pack around 8,250 BTU per pound, and burn far more cleanly and consistently than traditional firewood. They’re used in specially designed stoves and boilers for home heating, commercial buildings, and industrial power generation.
What Pellets Are Made From
The most common raw material is sawdust, a byproduct of lumber mills and woodworking operations. Sawdust works especially well because lignin, a natural compound in wood, acts as a built-in glue that holds each pellet together under pressure without needing synthetic binders. Bark and logging leftovers also work, though they produce more ash when burned.
Wood isn’t the only option. Pellets can be made from agricultural waste like wheat straw, barley straw, corn stalks, and perennial grasses such as switchgrass and miscanthus. Even distillers dry grains, a byproduct of corn ethanol production, can be mixed with ground grass to form pellets. The raw material matters because it directly affects how much energy the pellet contains, how much ash it leaves behind, and what kind of equipment it’s suited for.
How Pellets Are Manufactured
The process starts with drying and grinding the raw biomass down to a uniform particle size. Moisture needs to drop to roughly 5 to 10 percent, well below the 20 to 50 percent moisture typical of freshly cut wood. Once the material is dry and ground, it’s forced under high pressure through a metal die with small holes, essentially extruded into cylindrical shapes. The heat and pressure from this step activate the lignin in wood-based feedstocks, which softens and then resolidifies to bind the pellet. After extrusion, the pellets are cooled and screened to remove dust and broken pieces before packaging.
The result is a fuel that’s remarkably uniform. Unlike firewood, which varies wildly in size, moisture, and species, every bag of pellets delivers roughly the same heat output. That consistency is what makes automated feeding systems in pellet stoves and boilers possible.
Types of Pellet Fuel
Wood Pellets
These are the standard for residential heating. Premium wood pellets have an energy content of 16 to 19 megajoules per kilogram, very low ash content (typically 0.3 to 1 percent), and moisture around 8 to 10 percent. Data from the U.S. Energy Information Administration shows average heat content for premium and standard wood pellets ranging from about 8,125 to 8,410 BTU per pound depending on the region, with moisture content around 5 to 6 percent. Low ash means less frequent cleaning and fewer emissions, which is why wood pellets dominate the residential market and are also used in commercial buildings like hotels and hospitals.
Agricultural Residue Pellets
Made from crop waste like straw, corn stalks, or grass, these pellets cost less but come with trade-offs. Their energy content is lower (14 to 17 megajoules per kilogram), and ash content is significantly higher, ranging from 5 to 15 percent depending on the crop. That makes them better suited for industrial boilers, cement plants, and brick kilns where the equipment can handle more ash and where cost savings matter more than ultra-clean performance.
Torrefied Pellets
These are biomass pellets that have been heat-treated in a low-oxygen environment, giving them coal-like properties. The process boosts energy density to 20 to 23 megajoules per kilogram and makes the pellets water-resistant, which solves one of the biggest challenges with standard pellets. Torrefied pellets are primarily used as a direct coal replacement in power plants and are easier to grind and transport over long distances.
How Pellets Compare to Other Fuels
The main advantage of pellet fuel over traditional cordwood is consistency and convenience. Cordwood moisture content varies dramatically, often sitting at 20 percent or higher even after seasoning, which means a significant portion of the energy goes toward boiling off water rather than heating your home. Pellet fuel holds moisture content at 5 to 10 percent, so nearly all the energy in each pellet goes directly to heat.
Pellet stoves also burn more efficiently than conventional wood stoves. The automated feed system delivers a steady, controlled amount of fuel, and the combustion chamber is designed around the pellet’s uniform size. This translates to lower particulate emissions and less creosote buildup in your chimney or vent pipe. For comparison, sawdust pellets contain about 20.1 megajoules per kilogram of energy with only 0.45 percent ash, while something like wheat straw delivers 16 megajoules per kilogram with 6.7 percent ash. Those differences matter over the course of a heating season.
Compared to fossil fuels, pellets occupy a middle ground. They produce carbon dioxide when burned, but because the carbon was recently absorbed from the atmosphere by growing trees or crops, the net carbon impact over time is far lower than burning oil, natural gas, or coal. This is the basis for classifying biomass as carbon-neutral, though the full picture depends on how the raw material is sourced, transported, and processed.
Storing Pellets Properly
Moisture is the enemy of pellet fuel. If pellets absorb water, they swell, crumble, and become useless. Store them off the ground in a dry, covered area. A garage, shed, or basement works well as long as there’s no standing water or persistent humidity. Most pellets are sold in 40-pound plastic bags that provide short-term moisture protection, but once a bag is opened, you should use the pellets relatively quickly or keep them sealed.
For bulk storage in bins or silos, the guidelines get more specific. Pellets should be kept at a moisture content of 7 to 8 percent and stored below 35°C (95°F). Overly dry pellets actually absorb ambient moisture faster than slightly moist ones, which can trigger self-heating, a chemical reaction where the pellets generate their own heat and, in extreme cases, can become a fire risk. Good ventilation helps dissipate heat, but if self-heating has already started, airflow should be cut off immediately to avoid feeding the reaction. Minimizing dust and broken pellets in the storage container also reduces risk, since fine particles trap heat more readily than intact pellets.
Residential vs. Industrial Use
For home heating, you’ll almost always want premium wood pellets. They’re designed for pellet stoves and small boilers, burn cleanly, produce minimal ash, and are widely available in bags at hardware stores and home improvement centers. A typical home might burn 2 to 4 tons of pellets per heating season depending on climate and house size.
Industrial users have more flexibility. Power plants co-fire pellets with coal to reduce emissions. Factories use agricultural pellets as a cheaper heat source for kilns and furnaces. In steelmaking, biomass pellets are being explored as a replacement for coal and coke in blast furnaces, which are among the most carbon-intensive industrial processes. The scale is entirely different: a single power plant can consume hundreds of thousands of tons of pellets per year, and international trade in wood pellets has grown into a multi-billion-dollar industry, with pellets shipped across oceans from producing regions to energy markets in Europe and Asia.