Pellet burning for residential heating has a number of substantial advantages over the burning of fossil fuels. One advantage is its environmental friendliness. Pellet heating systems provide a low-net-CO2 solution, because the CO2 emitted during combustion of the pellets comes from CO2 absorbed by the tree during its growth. With the high efficiency burners, such as the Janfire NH on the Bosch/MESys system, other emissions such as NOx and volatile organic compounds are very low, making this one of the most non-polluting heating options available. When burning pellets, you are not burning fossil fuels which release long-sequestered carbon into the atmosphere as CO2, a greenhouse gas.

Since pellets are consumed closer to their production site than fossil fuels less greenhouse gas is generated in their transportation.

The pellets used for residential heating are often manufactured from sawdust and shavings from other wood products manufacturing processes, although as such manufacturing has declined regionally many pellets are manufactured from whole round wood harvested for that purpose.  The pellets are a pure refined wood product; nothing is added to the wood feedstock as they are manufactured.  The heat of compression as the fine woody material is forced through a die heats the natural lignin in the wood binding the material into a durable pellet.