Woody fuels offer several environmental advantages over fossil fuels. Timber can be replenished continuously, leading to a sustainable and reliable supply. However, appropriate forest management measures must be taken to ensure that growth conditions are not reduced during biomass production.

The net production of carbon dioxide from wood burning is small because the carbon dioxide produced in the wood burning process is equal to the carbon dioxide consumed in the life cycle of the tree. Using oil to transport materials creates excess carbon dioxide.

Woody fuels contain the least heavy metals and very low sulfur content; Woody fuels pose no threat to acid rain pollution. Particle emissions from wood can be controlled by standard emission control equipment, such as bag filters, cyclone separators and electronic precipitators. The bottom ash is the smallest. Wood ash is usually less than 1% of the weight of the wood and is sometimes used as fertilizer.

The main economic advantage of wood-burning systems is that wood fuels are generally cheaper than competing fossil fuels. But the price of wood for fuel can vary widely. Sometimes the cost can be very low or even negative when a nearby forest products manufacturing plant or municipal solid waste facility has an excess supply of wood residue. Transportation from the point of supply to the wood burning or wood processing unit is the major cost of wood fuel.