Wood pellets are a type of fuel, generally made of compacted sawdust. They are usually produced as a byproduct of saw milling and other wood transformation activities. The pellets are extremely dense and can be produced with a low humidity content (below 10%) which 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 rational transport over long distance. They can be conveniently blown from a tanker to a storage bunker or silo on a customer's premises.

Heating with wood-pellets is cheep and clean. In many countries the costs of heating can be cut up to 50%. In terms of energy value, 2 tonnes of pellets are the equivalent of 1,000 litres of oil. Replacing 1000 litres of oil with wood pellets reduces carbon emissions with Pelleted wood bio-fuels are a convenient, clean and easily managed replacement for oil. They are handled in much the same way, with tanker delivery and refilling, tank storage and automatic feeding, and minimal ash production.