Wood Pellets: America's Underrated Power Play

Authored by Darrell Smith, Executive Director of the U.S. Industrial Pellet Association via RealClearEnergy,

In an energy conversation dominated by buzzwords and breakthroughs, it’s easy to overlook the quiet, proven solutions that are already delivering results. Exhibit A: wood pellets.

These compact cylinders aren’t flashy or trend on social media. For the uninitiated, they are carriers of renewable carbon and energy, sourced from responsibly managed forests; a real, scalable, domestic resource that delivers energy security, climate value, and rural jobs while sustaining and growing forests. Wood pellets are emerging as one of the smartest plays in America’s energy and climate portfolio.

The Math Works

Let’s be clear: climate solutions need to scale. We need terawatts of clean power, gigatons of carbon removal, and a replacement for fossil carbon in sectors where options are limited. Think steel mills, cargo ships, aviation fuel, and cement plants — industries that can’t rely on solar panels and wind turbines.

Enter forest biomass. Every year, America’s 360 million acres of privately-owned forests grow more wood than we harvest. Driven by strong markets for wood products, these forests are powerful carbon sinks that have been growing since the 1950s when regenerative forestry practices became the norm.

Responsible forest management, the kind that thins out fuel for wildfires, not only keeps forests healthy but also supplies feedstock for wood pellets. These pellets burn clean, emit fewer particulates than coal, are carbon-neutral, and have the potential to be carbon-negative when sourced sustainably. In other words, we’re turning forest byproducts into a strategic asset instead of a forest fire risk and ensuring more investment into our nation’s forests.

Valued at $1.75 billion, the U.S. led the world last year in wood pellet exports — heating homes and decarbonizing power grids from Cambridge to Copenhagen. That’s not just a climate win. It’s a geopolitical and economic one. Furthermore, there are ample opportunities to increase use domestically.

The Digital Surge: Data Centers Meet Biomass

Data centers are growing at breakneck pace. From streaming to AI, every click and query demands energy. These facilities already consume nearly 3% of global electricity, and that figure is climbing fast. In the U.S. alone, data center energy demand is expected to double by 2030.

While tech companies make pledges to run on “100% renewable,” achieving this goal is challenging. Intermittent renewables like wind and solar can’t always deliver the 24/7 baseload power data centers require. Wind and power are not the silver bullet many had hoped, because expensive batteries must be manufactured and installed to account for their lack of reliability. Meanwhile, wood pellets offer a firm, dispatchable, renewable fuel that can complement the grid and provide the consistent power backbone data infrastructure needs, without the carbon price tag of fossil fuels.

Speed is also a challenge. AI infrastructure is being developed on start-up timelines, but the grids meant to supply power are often hampered by multi-year planning cycles and limited capacity. Utilizing the existing biomass fleet or retrofitting coal-fired power stations to run on sustainable biomass bypasses these time-intensive and costly barriers. These sites are already grid-connected, often already have relevant permits, and crucially a coal-to-biomass conversion can be completed in under two years.

A Carbon-Negative Future? Biomass is the Feedstock

There’s another dimension to this story. Biomass isn’t just an energy source; it’s a carbon solution. Engineered carbon removal technologies like Bioenergy with Carbon Capture and Storage (BECCS) require a steady, sustainable feedstock to function at scale. That feedstock needs to be renewable, reliable, and available today. Wood pellets fit that bill.

When wood pellets are used in BECCS systems, they generate power and remove CO₂ from the atmosphere at the same time, locking it away underground or turning it into usable materials like concrete, fuels, or even long-lived bioplastics. That’s negative emissions. Not net zero. Below zero.

With private markets pouring billions into carbon removal innovation, the need for biogenic carbon is accelerating. Whether it’s carbon-negative electricity, sustainable aviation fuel or green hydrogen, they all have one thing in common: they start with a reliable renewable carbon stream. Wood pellets and woody biomass are poised to play a major role in supporting these emerging technologies.

Missing the Forest for the Trees

Despite all this, woody biomass, like all energy, eventually finds itself in the crosshairs. Critics claim it’s just “burning trees,” a false narrative that ignores both the science and the forests. Sustainable biomass doesn’t chop down protected, old-growth forests. It’s sourced from working forests, the type that are deliberately selected and sustainably managed to produce our dimensional lumber and furniture. Except biomass utilizes the lowest-value fiber that comes off these tracts.

As America’s pulp and paper industry has declined, shuttering dozens of mills and shedding thousands of jobs over the last decade, wood pellets have offered a new market for low-value wood. This fiber has little economic value and without a buyer will often rot, burn, or get landfilled. Using this wood isn’t deforestation, it’s responsible forest stewardship. In fact, without reliable markets like biomass, private landowners will sell and convert their forests for more lucrative returns like agriculture, golf courses, and residential developments.

Investing in Rural America

The benefits of the wood pellet industry go beyond carbon math. This is a sector that brings real jobs to rural America. It supports forest owners, loggers, truckers, and working forests. This is climate action with a hard hat, not a hashtag.

If we’re going to win the climate war, we have to include the states in America’s wood basket where trees grow, people work the land, and decarbonization isn’t an abstract ideal.

Wood pellets are real, scalable, renewable and a true American resource.

In a world increasingly distracted by hype, maybe it’s time we doubled down on solutions that deliver quietly, reliably, and sustainably. One of the smartest is hiding in plain sight — in our forests.