Wood pellets are a clean, CO2-neutral and convenient fuel, mostly produced from sawdust and wood shavings, compressed under high pressure using no glue or other additives. They are cylindrical in shape and usually 6-10 mm in diameter and 10-30 mm in length. As a highly standardized and high-density fuel, pellets allow cost-efficient transportation and automatic operation for heat and power, from private homes to large-scale plants.

Developments in the European pellet market are once again very positive. Growth of about 25%–30% is expected in countries such as in Germany and Austria during 2009.