How to Start a Pellet Milling Business

Do you have a basic idea on how wood pellets are made? These are similar to gel capsule pills made from recycled materials such as sawdust left over from milling processes.

If you learn how these pellets are made and understand the equipment needed to produce them, then starting Pellet Milling Business would be very easy for you.

People are now aware that making their own pellet fuel can save them a lot of hassle and money. With popularity of pellet stoves nowadays, it can almost outpace commercial fuel production. The only difficulty is finding pellet fuel especially during colder months. However, raw materials in making pellet fuel are easy to attain and cheap. And if you are an individual conscious about the environment, you can burn clean and efficient fuel in biomass stoves which uses wood pellets.

Pellet Milling Business Plan

With the right equipment, biomass materials such as grass clippings, corn, wood chips, and sawdust can be converted into clean-burning, renewable fuel. All you need is a pellet machine or pellet mill as known by others. Therefore, if you want to start a Pellet Milling Business, you need to understand the basic functions of a pellet mill. This is the most important equipment you’ll ever need in your business operation.

Pellet mills take the raw materials and process them into pellet form. These are available in a range of capacities from 65-600 pounds per hour and prices start from $2,600. Take note that larger wood pieces need to be reduced to at least one-fourth inch before running these through the pellet mill.

Pellet Milling Business Guide

There are two different types of pellet mills. The main difference lies in the type of die used to form the resulting pellets:

  • Die Type Pellet Mill – uses a ring die in order to form the pellets. This is a thick cylinder made of metal with drilled holes around its circumference. Inside the ring, there are rollers to push raw materials through the die as well as force them out of the holes. For most commercial consumers, this is what they need since it’s a heavy duty, high cost machine for regular owners.
  • Flat Plate Type Pellet Mill – utilizes a flat plate in order to form the resulting pellets. The die used in meat grinders is very similar to this type of pellet mill. It’s made from a very thick flat plate also with holes drilled through it. For small scale producers, this is perfect since it’s simple and relatively easy to work on.

A pellet milling business is definitely profitable if you keep operation costs low. Remember that you need to factor in electricity and power costs as well because these directly influences the total cost of your production.



  • Guy said on July 28, 2010
    Your summery makes no scents. I've opened and run a wood pellet mill and its a lot of trial and error to get a plant running. In your article you didnt even skim the surface of what is needed. Guy
  • jaimeson chute said on January 9, 2012
    I live in Salem, AR and would like more information about starting a pellet milling business. What about chippers? Would grass clipping, and typical yard waste produce pellets that would burn hot enough and long enough or would I have to get hardwoods and other materials?
  • rakesh sharam said on September 2, 2013
    i want to know the pellet business like its fuel and stove pl do the needful thanks
  • lajola said on February 7, 2014
    hi i live in france and have made lots of inquiries to produce sawdust pellets and briquettes. i have everything on paper at this moment, a line of machines from a crusher/vertical dryer/pellet and a briquettes machines. i am hoping to get a grant but i have an appointment this month to find out. we have plenty of wood here and mills, we dont want to make fortunes as the more you make the more taxs you pay. ant advise we would be grateful for thanks.
  • lonbay said on March 11, 2014
    Anyone out there starting a wood pellet facility? Any one interested in sharing a facility.
  • Yuschak said on November 12, 2014
    Located in VA. Looking into starting a production facility.
  • David said on February 13, 2015
    Seriously interested in starting a wood pellet manufacturing plant! Any and all help appreciated, the types of machines that work best and costs.
  • janifer said on March 2, 2016
    If anyone need wood pellet mill, please send your item and contact details to me, we can supply machines for you!
  • bruce bardaville said on October 5, 2016
    would like to start small pellet mill business, need mill and advice
  • tony bruno said on April 19, 2017
    have the know how to start a wood pellet business (both for heating and barbecue)
    i need funds for the first mill
    i have local sawdust suppliers
    i can air dry to proper moisture
    send me info on your ability to supply funds and quantity
    can do small to 100,000 tons of pellets per first year in florida USA
  • Nat said on January 3, 2018
    Hi I need guidance on how to start a pellet mill and I would also hope to find a partner to work together. I'm in the asia side.


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