The burgeoning 21stcentury wood pellet industry is led by Sweden, the USA and Canada, the latter alone producing round 1.3 million tons of pellet fuel in 2008. Europe produced around 9 million tons of pellets in 2007, led by Sweden and Austria. An innovative source of renewable energy, if the source is sustainably managed woodland or a clean waste wood, these small pellets are recognized as a virtually carbon-neutral fuel. Wood pellet technology has evolved rapidly since the early 1980s when it was first developed in Sweden as a practical and efficient way to use the timber industry’s waste wood and the country’s indigenous forest resource. Since then, the issue of climate change has reared its ugly head and wood pellets now provide a cost-effective, carbonneutral and convenient alternative to fossil fuels such as coal and fuel oil for space heating and, increasingly, renewable electricity generation in the form of combined heat and power (CHP) where the power can be sold to the grid and the heat distributed to buildings and/or used as process heat.