This report gives a brief description of the situation of wood pellets technology in Poland and Sweden. The report is based on interviews with users of smaller and bigger pellet burners, visits on factories producing wood pellets, other rapports and research of internet resources. In Poland still most of heat generating plants and boiler plants are based on coal, which causes environmental pollution. Nowadays in modern countries can replace fossil fuels by cheap, ecological and local renewable energy resources like biofuels (especially wood, pellets, wood briquettes, straw, and other waste materials). Pellets can be the most promising renewable energy resource in Poland, because it is treated as waste and not as an energy resource. Development of renewable energy resource is needed in Poland if the country wants to enter the European Union. The white book of EU assumes that all countries in EU have to increase the use of renewable energy from 5,5 % to 12 % in 2010, (present level in Poland is about 1,5 %), (Reference list [2]). Wood pellets have large market potential as a biomass fuel although their current share of the heat energy market in general and the biomass fuel market is very small at present. The potential exists because of the availability of the raw material, comparatively high energy density, the possibility of use in automatic firing systems with a high level of user convenience and, not least – provided that certain energy policy conditions are fulfilled – their competitive price. For small systems in particular this opens up a new dimension in practical biomass heating, which, under certain circumstances, could represent a genuine alternative in this area to coal heating. (Literature list [8]) Biofuels are local energy resources; there is no need to make a special centralized infrastructure. Studies have shown that biomass fuels have the potential of stabilization local economies as well as reducing environmental and economic impact.