Wood Pellet Production Research Articles

Analysis of the efficiency of wood pellet production in 2018-2022, on the example of a small capacity company located in southern Poland

Analysis of the efficiency of wood pellet production in 2018-2022, on the example of a small capacity company located in southern Poland. This paper is devoted to analyzing the efficiency of wood pellet production in 2018-2022, on the example of a small production facility located in the southern part of Poland. The first part includes definitions of key terms, i.e. answers to the questions of what a pellet is, what it is used for and what is the main idea of biomass pelletization. In addition to clarifying the most relevant terms, the section also indicates the current importance of the form of fuel under discussion and predictions for its future. The next section presents a description of the pellet production line and production efficiency data. The conclusion, in turn, presents the results of the above analyses, and also indicates the most important problems in the biomass market, which - especially in the last two years - have significantly affected the production market and, consequently, the level of sales.

Sentiments toward use of forest biomass for heat and power in canadian headlines

Replacement of fossil fuels with bioenergy, often in concert with carbon capture and storage, plays an important role in published low-emission pathways from the Intergovernmental Panel on Climate Change (IPCC) and other agencies. National and regional net-zero greenhouse gas emission commitments have caused a dramatic increase in forest biomass consumption globally, and the rise has been accompanied by debates in the scholarly literature and in society at large about the ecological and climate change impacts of forest biomass. This paper presents a quantitative analysis of media headlines about forest bioenergy published in 75 Canadian newspapers from 2010 to 2020. Using a lexicon and rules-based sentiment analysis tool, we explore negative and positive media headlines about forest biomass. Despite our finding that Canadian headlines about forest bioenergy were twice as likely to be positive as negative, media items document reversals away from forest biomass-generated domestic electricity. Our analysis found that increases in electricity costs following the introduction of forest biomass as a fuel type for Canadian electricity generation was a primary cause of these reversals. Headlines also critiqued the expanded production of wood pellets, citing forest ecological impacts and the debate about the net carbon impacts of forest biomass-generated energy. Safety issues, including stories about workplace injuries, and pellet plant fires, and economic issues, such as fiber supply and mill closures, were also featured. This research contributes a social science lens to understand perceptions over time about forest biomass for heat and power.

Forestry based products as climate change solution: Integrating life cycle assessment with techno-economic analysis

This study establishes an integrated life cycle analysis and techno-economic assessment to evaluate costs and carbon footprint impacts of an integrated forest biorefinery that produces lumber, industrial sugar and wood pellets in a planned biomass conversion center in the Pontiac region of Quebec (Canada). An integrated evaluation approach combining levelized cost and carbon footprint accounting was adopted for assessing the implementation of this novel advanced biorefinery concept taking into account different biomass feedstock, diversified product portfolio (sugar, lignin, bio-oil, electricity and lumber) and multiple biomass conversion technologies. The conclusion of this study is that if the GHG emission is considered as the basis of the ranking system, the production of wood pellets would emit less (1.2 kg/T) and that of lumber, and sugar would emit most respectively (3.3 kg/T and 98.4 kg/DT). This is whereas if the ranking would be performed based on the cost, the sequence would be the production of lumber, pellet, and sugar.

Application of Post-Flotation Dairy Sludge in the Production of Wood Pellets: Pelletization and Combustion Analysis

The amount and variety of waste increases every year. One of the places where biodegradable waste is generated is the agri-food industry, where it is possible to utilize it for the purpose of energy production. The aim of this research was to determine the possibility of using post-floatation dairy sludge as a raw material for co-pelletization with sawdust. The scope of this work included physical and chemical characterizations of the feedstock, the co-pelletization process, and the combustion of the produced pellets, combined with an exhaust analysis. The obtained values of the pellets’ density at each level of sludge addition allowed us to conclude that the obtained pellets had a good market quality and constituted a full-fledged, innovative solid fuel, in accordance with the guidelines of the latest, currently applicable ISO 17225 standard. Furthermore, adding ca. 20%wt of sludge to sawdust resulted in a 30% decrease in the pelletization power demand, and still, the combustion characteristics of the pellets met the European Ecodesign emission limitations in terms of the CO and NOx content in the exhaust. The addition of post-flotation dairy sludge to sawdust has a beneficial influence on the production of fuel pellets by decreasing the energy consumption of the pelletization process and improving the pellets’ kinetic durability. Due to legal requirements and the pursuit of the circular economy principle, one should expect an increased interest in the use of agri-food waste for the production of biofuels.

Application of Process Hazard Analysis and Inherently Safer Design in Wood Pellet Production.

Wood pellets are a fuel used for heat and power generation. Wood pellets are manufactured from forest residues and byproducts of other sectors in the wood processing industry, such as sawmilling. Wood pellet production generates combustible wood dust, which presents the risk of fire and explosion. The objective of this research was to incorporate the principles of inherently safer design (ISD) for the management of combustible dust hazards associated with wood pellet production. Using bow tie analysis to explicitly consider ISD within process hazard analysis (PHA), ISD barriers were successfully identified, including the use of paved surfaces to store feedstock to minimize rocks entering the process and presenting a risk of ignition sources, the use of reduced-size silos to minimize the inventory and increase the turnover frequency, the removal of unnecessary or hazardous equipment, such as fans, following a redesign, and the relocation of hazardous equipment, such as cyclones, outside and away from personnel. A summary of example-based guidance for combustible dust hazards was collected to support additional ISD implementation within PHA as part of the process safety management (PSM). The research also highlights learnings for conducting virtual PHA workshops, as well as identifying opportunities for incorporating ISD within operating wood processing facilities through the incident investigation and risk assessment elements of PSM.

Investigating solids present in the aqueous stream during STEX condensate upgrading—a case study

Abstract Steam explosion (STEX) of woody biomass is an efficient pretreatment method in the production of water-resistant wood pellets. The STEX process also generates an aqueous condensate stream containing dissolved organic compounds, with furfural as the most abundant and valuable component. An industrial-scale recovery process for furfural and other organic by-products is therefore in the process of being developed and built. One challenge in the process has turned out to be the formation of solid particulate matter that can clog filters in the process unit. We have analyzed both the solid deposits and the fluids present at different points in the process unit to try to identify the origin of the particles using spectroscopic and chromatographic analysis, elemental analysis, and scanning electron microscopy.The aqueous fluids deriving from condensed steam contain furfural and other small organic molecules, with a separate low-density organic layer occurring at some points. This layer largely consists of wood extractives, typically terpenoids. In addition, a heavy organic phase comprising mostly furfural was found at one sampling point. The particles comprise a black, largely insoluble material with a H/C ratio of 0.88 and an O/C ratio of 0.26 and a very low ash content. IR spectra show a low content of C–H functional groups, and chromatographic analysis supports an interpretation that the particles are dominantly furfural-sourced humin-like polymers with adsorbed or co-polymerized terpenoids. Particle formation has been reproduced in a laboratory setting with conditions similar to those in the full-scale process.

Role of biomass as low-carbon energy source in the era of net zero emissions

• Prospects of biofuels to replace fossils fuels in thermal power plants is discussed. • Status of power generation facilities that can support this growth was analyzed. • Use of biofuels in existing thermal power plants is proposed. • Biomass from unused forest resources is ideal to meet wood pellet production demand. Since the Renewable Portfolio Standards (RPS) policy was introduced in 2012, the use of biomass and its import has significantly increased in the power generation sector of Korea. Currently, biofuel-fired electricity production is fifty-fold compared to before the implementation of the RPS. However, the rapid growth of bioenergy at the initial stage of the RPS and institutional changes for equity with other renewable energy industries brought about significant changes in the bioenergy market and related industries in a short period. For example, the effect of the policy amendment to reduce dependence on foreign bioenergy and expand the use of domestic biomass had an immediate effect on the market. As a result, the imported biomass and bio-SRF began to shrink, and these markets had −1 % and −36 % CAGR between 2018 and 2020, respectively. Meanwhile, the policy contributes to revitalizing the domestic bioenergy industry, and it is predicted that the domestic biomass utilization will be more than 6 million tons in 2050. This paper reports the impact of changes in Korea's bioenergy policy on the power generation sector over the past ten years. When carbon neutrality is essential in all energy fields, the result can be a good reference for establishing bioenergy policies.

The Russian forest industry: declining wood production and emerging opportunities in bioenergy

The aim of the study is to describe the main trends and possibilities in Russian forestry. Based on statistical data, the authors analyze general trends in the Russian forest industry like woodworking, roundwood and wood pellets production. Russia's output of roundwood, sawnwood, wood pellets, wood-based panels and veneer sheets has been growing steadily over the past 5 years. The production of only two wood-based panel types – hardboard and other fiberboard – is either absent or in decline. The results include decline in roundwood export and the growth rates in wood pellets, sawnwood, wood-based panels, and veneer sheets exports. The Russian forest industry has room to grow its export of forest products. This requires technology upgrading, which could be facilitated by proactive government policies. Keywords: forest industry, woodworking industry, bioenergy, Russia

A Flexible Robust Possibilistic Programming Approach toward Wood Pellets Supply Chain Network Design

Increasing energy demand and the detrimental environmental impacts of fossil fuels have led to the development of renewable energy sources. Rapid demand growth for wood pellets over the last decade has established wood pellets as a potential renewable energy source in a globally competitive energy market. Integrated decision making including all stakeholders in the wood pellet supply chain (WPSC) is essential for a smooth transition to commercially viable wood pellet production. In this aspect, this study aims to suggest a decision support system for optimizing biomass-based wood pellet production supply chain network design (WPP-SCND). The WPP-SCND decision system minimizes the total supply chain (SC) cost of the system while also reducing carbon emissions associated with wood pellet SC activities. All objective parameters, including biomass availability at the supply terminals, market demand, and biomass production, are considered fuzzy to account for epistemic uncertainty. A fuzzy flexible robust possibilistic programming (fuzzy-FRPP) technique is developed for solving the suggested uncertain WPP-SCND model. The case findings show that the imprecise nature of the parameters has a significant impact on the strategic and tactical decisions in the wood pellet SC. By investing almost 10% of the total cost, robust decisions within the wood pellet SC can be obtained. It is established that the fuzzy-FRPP technique successfully provides robust decisions and achieves a balance between transportation costs, emissions costs, and economies of scale when making capacity decisions. Although the suggested decision support system is used to manage the production and distribution of wood pellets, the insights and solution methodology may be extended to the production of other biofuels. The proposed research may be valuable to authorities involved in planning large-scale wood pellet-related production-distribution projects.

Assessment of Trends in the Global Wood Pellets Market and Opportunities of the Russian Federation in this Market

In connection with the adoption of the concept of sustainable development and the creation of bioenergy, the world market of wood pellets was formed. Pellets have received the status of a renewable energy source. Developed countries in Europe and Asia have launched a state policy to stimulate the production and consumption of wood pellets. Forest-rich countries, including Russia, have built production facilities and become exporters of "green" fuel. The purpose of the paper is to study the demand and assess trends in the global market of wood pellets, to determine the position of Russia in this market and the opportunities for the development of the industry. The materials of the study were the statistics of the UN FAO for 2012-2020 and the German DEPI Pellet Institute, scientific and industrial sphere publications. The study showed that the global market of wood pellets is growing. This is a buyer's market which is formed by two large regional markets — European and Asian. In 2020, Russia ranked the 5th place among the world producers and exporters of pellets. Russian production is export-oriented, and the domestic demand for pellets is minimal. The dynamics of world prices for pellets has been studied, a significant growth in prices in European countries since the end of 2021 and the factors of price increases have been established. In 2022, after the rise of political tensions and the imposition of sanctions, the situation of Russian manufacturers became difficult. The assessment of export opportunities showed a high degree of uncertainty, and a conclusion was made about a decrease in business profitability, about the possible shutdown and liquidation of pellet production in Russia.

Semi-automatic detection and segmentation of wooden pellet size exploiting a deep learning approach

The production of wood pellets was born as a response to the need to manage the residual sawdust of wood processing. Nowadays, the standard UNE EN ISO 17225-2:2021 determine the general requirements of the fuel specifications and their classes. Among these, the length of the pellet plays an important role in defining its behaviour in different contexts, starting from the way the spaces are occupied both in static (storage) and dynamic (feeding) conditions. The geometric-dimensional aspects of pellets are of particular importance for the density, the energy density, and the effective thermal capacity of thermal plants, affecting also the flowability. Despite the extreme importance of such parameters, the pellet measurement is carried out using a precision caliper on a group of individual pellets taken from laboratory samples. This method is time-consuming and returns dimensional values in very small quantities, raising the issue of sample representativeness. Considering the impact of the quality parameters, it is important to examine alternative solutions. In this light, this work has the task of testing and verifying the efficiency of a system that uses a deep neural network, to determine the geometric-dimensional parameters of wood pellets. Thus, the implemented system detects, segments, and determines the dimensions of wood pellets in a bunch. This problem is not trivial, due to the irregular lighting conditions that affect the quality of the images and the overlapping of the wood pellets. To evaluate the performance of the deep neural network approach, several experiments have been carried out, in different lighting conditions and for validation purposes, we considered also PVC pellets, which have a known and fixed dimension. The comparison between real environment data and the validation set, despite a slight tendency towards underestimation in length, shows great performances in terms of RMSE.

An Examination of Excess Wood Pellet Supply in the United States

Abstract The US wood pellet exports—mostly to Europe, Japan, and South Korea—comprised 85 percent of its wood pellet production in the past 20+ years. In this article, we estimate the regional excess supply of wood pellets in the United States using annual data from 1996 to 2021.We use Seemingly Unrelated Regression (SUR) analysis in a profit maximization framework for the South, North, and West regions of the United States. We also include some clean energy policies of the European Union (EU) to examine their potential impact on US wood pellet export volume. Our results show that after application of the low-carbon energy target in the EU, the export volume of the United States has increased, especially in the South region. Elasticity of excess wood pellet supply from the United States was approximately 0.15 in all three regions, and interest rates and energy costs have negative impacts on regional excess supply. Therefore, the recent increase in interest rates and energy costs could slow down the growth of excess supply of wood pellets in the United States.

Environmental externalities of wood pellets from fast-growing and para-rubber trees for sustainable energy production: A case in Thailand

Wood pellets are one of biomass-based energy carriers considered important as renewable energy source. This study considers wood pellets for heat and power generation from fast-growing Leucaena and Acacia trees and para-rubber trees in a life cycle perspective. The objectives of this study are to estimate the actual cost (including environmental externalities) of heat and electricity production from wood pellets, and comparison with the external cost of fossil fuels, as well as forecasting the external cost arising from the increase in wood pellet demand. For both heat and electricity production, it was seen that when external costs are included, wood pellets are cheaper than lignite and fuel oil although the latter are cheaper when only internal costs are considered. Four recommendations for reducing the external costs of wood pellet production are: 1) to support sustainable agriculture for para-rubber trees and fast-growing trees, 2) to consider clean transportation in the supply chain, 3) wood pellet factory zoning, including good logistics, and 4) considering the external cost of wood pellets for polluter pays principle. These results and recommendations of the study can provide important information to consider towards adjusting the national energy plan and to have strict measures for avoiding problem shifting from the use of non-renewable resources (fossil fuels) to issues related to the use of biomass-based fuels (use of agro-chemicals, forest encroachment, and so on).

Modelling and optimization of material flows in the wood pellet supply chain

To reduce the use of fossil fuels, forest-based biomass appears as an engaging source of energy. Nevertheless, logistics costs represent one of the main barriers in the use of forestry residues and wood waste for bioenergy and biofuels production. The relatively low energy density of biomass contributes to a higher transportation cost per unit of energy content compared with fossil fuels. Other issues, such as raw material availability, seasonality, production and storage capacity constraints, and transportation distances for product distribution also are critical in the management of biomass supply chain. The interconnectedness of these factors directly impacts into the movement of materials along the logistics chain. In this way, this paper researches the alternative of using forest residues and wood waste as raw material sources for wood pellet production through the modelling and optimization of all logistics activities performed in the supply chain. The objective is the minimization of the total operative cost, which in turn allows determining the minimum profitable selling price of produced pellets. Besides production and inventory decisions, the proposal determines the more profitable routes for biomass collection and pellets distribution. A standard decomposition technique, consisting in designing routes first and later computing products and raw material flows, is employed to solve the optimization problem. The proposal is tested on a large-size case study designed with real data from the forest industry in the Argentinean Mesopotamia. Due to the close interaction between all logistics decisions in the supply chain, several scenarios are assessed to estimate the impact on the solutions of some changes in the problem configuration.

GREENHOUSE GAS MITIGATION POTENTIAL OF FOREST BIOFUEL ORIGINATED IN LATVIA

Latvia is one of the largest exporters of pellets in Europe, and at the same time share of biofuel in energy production in Latvia is also one of the largest between the developed countries. Rapid increase of biofuel production and export raises questions about sustainability of forest sector and contribution of the forest biofuel produced in Latvia to the greenhouse gas (GHG) balance in Europe. Sustainability of forest biofuel is broadly discussed issue in Baltic states; particularly, due to continuous increase of production and export of wood pellets. GHG mitigation potential of the forest biofuel is one of the sustainability aspects surrounded by multiple speculations, which has to be addressed by comprehensive comparison of GHG fluxes due to production and use of forest biofuel and substituted fossil fuel. Assessment of the GHG mitigation potential of forest biofuel is complex process requiring multiple activity data and assumptions. Particular complexity of calculation is determined by the need to use harmonized approach for the whole calculation period. The assessment of the climate change mitigation in this study is based on the methods applied in National GHG inventory and literature data on GHG emissions due to production and delivery of substituted fossil fuel and forest biomass including demolition wood. According to the study results substitution effect of the forest biofuel in Latvia continuously increases since 2000, mainly due to export of biofuel, reaching 14323 Gg CO2 eq. in 2020 (by 30% more than the net GHG emissions in Latvia in 2019). Electricity production in pellet factories, in spite of major reduction of GHG emissions in the production process, has minor role in the total substitution effect.

Assessing the potential for unaccounted emissions from bioenergy and the implications for forests: The United States and global

AbstractDevelopment of the bioenergy sector is being actively pursued in many countries as a means to reduce climate change and fulfill international climate agreements such as the Paris Agreement. Although biomass for energy production (especially wood pellets) can replace carbon‐intensive fossil fuels, its net greenhouse gas impact varies, and the production of wood pellets can also lead to intensification in forest harvests and reduction of forest carbon stocks. Additionally, under specific conditions, emissions associated with imported biomass feedstocks may be omitted from national accounts, due to incompatibilities in accounting approaches. We assessed the risks and potential scale of emissions omitted from accounts (EOA) among key trading regions, focusing on the demand for wood pellets under different levels of climate mitigation targets. Our results suggest that the global production of wood pellets would grow from 38.9 to 120 Mton/year between 2019 and 2050 in a scenario that limits global mean temperature increase to 1.5°C above pre‐industrial levels. A large portion of this occurs in North America (36.8 Mton/year by 2050), Europe (47.6 Mton/year by 2050), and Asia (23.3 Mton/year by 2050). We estimate that in a 1.5°C scenario, global EOA associated with international trade of wood pellets has the potential to reach 23.81 MtCO2eq/year by 2030 and 69.52 MtCO2eq/year in 2050. Emissions resulting from European biomass energy production, based on wood pellet imports from the United States, may reach 11.68 MtCO2eq/year by 2030 and 33.57 MtCO2eq/year in 2050. The production of wood pellet feedstocks may also present a substantial carbon price arbitrage opportunity for bioenergy producers through a conjunction of two distinct GHG accounting rules. If this opportunity is realized, it could accelerate the growth of the bioenergy industry to levels that harm forests’ function as a carbon sink and omit actual emissions in national and global accounting frameworks.

Environmental and Economic Assessment of Wood Pellet Production from Trees in Greece

Biomass is a renewable, economic and readily available resource of energy that has potential to substitute fossil fuels in many applications such as heat, electricity and biofuels. The increased use of the agricultural biomass can help the agricultural based societies in achieving energy security and creating employment without causing environmental degradation. However, the viability and feasibility of electricity generation from agricultural biomass depends upon the availability of biomass supply at a competitive cost. The present study investigates the availability of agricultural biomass for distributed power generation in Greece (Kozani). The study concludes with a discussion on significance and challenges of decentralized electricity generation for rural energy supply, including brief description about economical, social, environmental and technical aspects of bioelectricity. With the application of the life cycle analysis applied, the environmental and economic impacts that will occur in the region of Kozani in Greece, where a biomass wood pellets production workshop is operating, have been assessed. The total annual emission of CO 657.9 gr, HC 22.36 gr, PM 67.94 and NOx 8.832,2 gr was calculated. The economic evaluation estimated the payback period for the investment in this plant to be approximately 3 years.

Wood Pellet Production with the Inclusion of Rice Hull Derived Bio-oil

Highlights Inclusion of heavy bio-oil (0.5%) improved pellet PDI by 0.4 percentage points when compared to the control. Inclusion of heavy bio-oil (0.5%) improved the HHV by 0.4 MJ kg-1 when compared to the control. Inclusion of heavy bio-oil (at 0.3% and 0.5% levels) improved the NPV over the control by $279K and $959K, respectively. Abstract.Rice hulls or husks have the potential to aid in wood pelletization as they possess high calorific values. However, this material also has a high ash content and is therefore not viable to be of use in the pelletization process without modification. This study focuses on using rice hull-derived bio-oil from pyrolysis, which decreases the overall ash content when compared to the original rice hulls and was postulated as a means to improve wood pellet characteristics (e.g., pellet durability index and the calorific value). Two groups of rice hull-derived bio-oil were used as an additive in wood fiber pelletization: Group 1 consisted of heavy bio-oil (products with a distillation vapor temperature only above 100°C) at a 0.2% (H2) and 0.5% (H5) additive inclusion rate (dry basis) with a matched control group (C1), and Group 2 consisted of bio-oil with light keys (products with a distillation vapor temperature of 20°C to 95°C and above 100°C) added from distillation process at a 0.2% (L2) and 0.5% (L5) concentration (dry basis) with a matched control group (C2). The C1, H2, H5, C2, L2 and L5 treatments had a mean pellet durability index (PDI) of 97.6%, 97.7%, 98.0%, 98.2%, 98.2%, and 98.3%, respectively. The C1, H2, H5, C2, L2, and L5 treatments had average bulk density values of 683.2, 678.4, 678.4, 673.6, 687.2, and 681.6 kg m-3, respectively. The mean higher heating values (HHV) for the C1, H2, H5, C2, L2, and L5 treatments were 24.6, 24.8, 25.0, 24.0, 24.0, and 24.0, MJ kg-1, respectively. The normalized energy requirements for production for the C1, H2, H5, C2, L2, and L5 treatments were 105.7, 96.3, 96.7, 97.9, 97.4, and 93.2 kWh Mg-1, respectively. An economic feasibility analysis showed that the discounted net present value (NPV) at a rate of 12% could be improved when using the H2 and H5 additives when compared to the control. Keywords: Biomass, Bio-oil, Hull, Husk, Pelletization, Pellets, Rice, Wood.

FTIR spectroscopy for determination of the raw materials used in wood pellet production

The research investigates the possibility of distinguishing pellet wood fuels using infrared spectroscopy. It has been applied Attenuated Total Reflectance – Fourier Transform InfraRed (ATR-FTIR) spectroscopy, deemed an analysis technique appropriate for detecting the chemical composition of materials, to determine woody components make up a wood pellet. Considering the large quantities of this solid biofuel on the market, it is necessary to guarantee the safety and traceability aspects of the product, as its origin and source, in addition to the quality parameters indicated by the ISO 17225-2 standards. In this study, a total of 98 samples of the most common wood used for European pellet production, have been selected and collected. This set of samples include also materials coming from the wood industry, as residues of the chemical process. Through clustering analysis Principal component Analysis (PCA) and Hierarchical Cluster Analysis (HCA) techniques applied to spectroscopic analyzer data, it has been seen that ATR-FTIR results provide information on wood pellet typology, hardwood and softwood, and pellet made by woody materials containing high quantity of chemical products like glues.

Small-Scale Biofuel Production: Assessment of Efficiency

Currently, the energy industry is tending toward a global expansion of the use of renewable energy sources, thereby contributing to economic development. In the Russian Federation, such transformation is particularly important in terms of enhancing the involvement of excessive wood waste in production. In this regard, processing wood waste into pellets has proven to be highly beneficial. Apart from increasing the efficiency of the harvested wood and reducing the fire hazard in waste storages, it also positively influences the structure of energy balance in specific regions, creating an impetus for the development of small businesses in the country. This paper aims to assess the economic effects of biofuel production together with the efficiency of processing wood waste into pellets as a factor in the development of small business in the Russian Federation. Net present value (NPV) is used as the main analytical tool to assess economic efficiency. A general scientific analysis of the open data is also applied, including analytical reviews of the Russian ministries and international organizations. As a result, the paper estimates the prospects of using wood biomass in the energy industry, provides options for establishing capacities of microenterprises engaged in pellet production, and considers the expected economic effect for various levels of capacity utilization. The scientific novelty of this paper is centered on the design of a biofuel production scheme from wood waste (wood pellets) for a small-business enterprise with minimum labor and production costs. The paper is highly practice oriented, as it substantiates the economic efficiency of pellet production by small businesses in the Russian Federation in accordance with current legislation and state subsidies. Overall, this paper provides enough evidence to seriously consider the prospects of wood pellet production in order to expand the share of renewable sources in the energy balance of the country.