The global energy landscape is undergoing a pivotal shift, with a pressing need to minimize pollution and carbon dioxide (CO2) emissions by transitioning from fossil fuels to renewable energy sources. Biofuels, accounting for the largest renewable share in global energy production, surpass all other renewables combined and can ideally meet half of the world's energy needs in the next several decades. Solid biomass, such as pellets, has gained traction in Europe. Derived from organic materials like wood and crops, pellets offer an increasingly popular and sustainable alternative to coal for heat and power generation, with global production rising quickly and projected to continue growing into the far future. Pellet production is a comprehensive process. Feedstock preparation, processing treatments (mechanical, thermochemical, biological), and additives are essential to optimize feedstock properties. The feedstock is then pelletized using pellet mills, and the machine specifications and manufacturing parameters applied can significantly influence costs and product quality. The literature on life cycle assessments of pellets has shown that replacing coal with pellets can reduce various emissions and improve the environmental footprint of energy production. Because of their superior properties and emission profiles compared to agro-pellets (agriculture biomass pellets), Wood pellets dominate the pellet market as a substitute for coal in residential and commercial heating and industrial power generation. Despite their growing appeal, pellet consumption remains concentrated in specific regions, with Europe and China being the main regions reporting wide-scale pellet use. This paper provides an in-depth insight into pellets, encompassing their production, properties, applications, environmental implications, current market dynamics, future challenges, and relevant policies. Currently, wood pellets remain superior to other forms of pellets, and with sustainable forestry practices allowing greater wood harvest rates, it is expected and recommended to increase wood pellet production and consumption, especially in the heating sector. Agro-pellets should also be explored as technology improves, although their use might be restricted to when there is excessive biomass nearby if they keep underperforming relative to wood pellets. With a cleaner pollutant profile, carbon-neutral combustion, and increasingly competitive prices, biomass pellets are one of the most promising sustainable solutions to the world's growing energy demands.