Wood pellets are compressed wood particles that are used as fuel. Pellets are already commonly used in some areas of the country, but they are growing in popularity as the cost of primary fuels increases and concerns about global climate change build. Because pellets are made from wood, they have the same advantages as firewood â?? they are a local, renewable, low-cost fuel. Wood pellets are very low in moisture (water) and ash content, so they burn hot and cleanly. Fuel pellets are limited to 1 percent (Premium grade) to 3 percent (Standard) ash. Regular firewood has more ash due to the presence of bark. Wood pellets are also small and easy to handle. They are generally available in 20-kg bags, but in some areas, they are available in bulk. There is very little dust and no bark.