Wood pellet fuel are always known as wood pellet, which is prducted by making wood pellets. Wood pellet fuel are a manufactured biomass fuel.  They are made from wood waste materials that are condensed into pellets under heat and pressure. Natural plant lignin holds the pellets together without glues or additives. Wood pellet fuel are of uniform size and shape (between 1-11/2 inches by approximately 1/4-5/16 inches in diameter), making them as easy to store and use as traditional fossil heating fuels. 
Wood pellet fuel also take up much less space in storage than other biomass fuels because they have a higher energy content by weight (roughly 7,750 Btu per pound at six percent moisture content) due to their densiied nature and low-moisture content (typically between 4-6 percent moisture by weight). While wood pellet fuel are typically not differentiated between soft and hardwood sources, there are three grades based on the amount of ash produced when they are burned:

Premium (ash content less than one percent)
Standard (ash content between one-two percent)
Industrial (ash content three percent or greater)

Premium and standard grade wood pellet fuel are suitable for any wood pellet boiler with automatic ash removal, including most institutional- or commercial-scale applications. Industrial grade wood pellet fuel, or those with ash content greater than three percent, should be avoided due to the high volume of ash produced. 

the Process of Making Wood Pellets
It's worth noting that in order to make wood pellets, you need specialized equipment. And while it may be possible to build a homemade pellet mill, which means there are two main requirements, the raw material, and the equipment to make wood pellets.

The Material

You can make wood pellets out of many different materials. Both softwood and hardwood are both used and produce excellent results. What's really interesting though is that it's also possible to make wood pellets out of a wide variety of materials. Some of the possible ingredients are - switch grass, grain, corn cobs, corn stalks, paper, sawdust, distiller grain, and many others. There are many potential materials that can be used with good results to make wood pellets. The common rule of thumb is that if you can reduce the size of your chosen biomass into granular form, you can make wood pellets from it.

The Equipment

There are several pieces of equipment to make wood pellets, including hammer mills, dryers, pelletizers, coolers, baggers, and boilers to name a few of the major ones. Note that this is for a large scale commercial manufacturing pellet line. If you're making wood pellets on a smaller home use scale, It's possible to get by without all of these. Typically, home made wood pellets are made in a small scale pellet mill. Depending on how large the size of the raw material is, you may also need to use a small hammer mill. The goal is to make the particles smaller than 1/4". If your raw material is smaller than 1/4" to begin with, when using sawdust for instance, you won't need a hammer mill.

The Process to make wood pellets are as follows: first, if the raw material is larger than 1/4", it's broken down in the hammer mill to a smaller particle size. Next, the raw fiber is either put into the pelletizer and heated with steam, pressure, a combination of both. This causes the naturally occurring lignin to plasticize and hold the pellet together after it passes through the pelletizer and cools down. To make wood pellets, lignin is a natural substance that's found in wood and acts like glue. If your raw material isn't wood and doesn't have lignin, a different binding agent will need to be added to hold the pellets together to make wood pellets. This binder will depend on what particular raw stock you are using. Some of the commonly used binders are vegetable oil, clay, starch, cooking oil, or wax to name a few.

Finally, the pellets must be allowed to dry out. A moisture content of from 5% - 15% should be adequate. The exact percentage will depend on the raw material that you're using to make wood pellets.