At present, several countries across the globe are enthusiastic to generate electricity by burning biomass, such as wood, in co-firing power plants. In the UK, Drax, the largest electricity generation plant, a few years ago started using wood pellets along with coal for the energy generation. These wood pellets are made from either sawdust or groundwood matter and are largely supplied by a US-based company Enviva, the largest producer of wood pellets in the world. This initiative was a part of the Renewable Energy Directive (RED) that required the UK to end its dependence on coal by the year 2025. RED also declared burning wood pellets for energy generation as a carbon-neutral option without giving due consideration to the contradictory claims made by hundreds of scientists and researchers. As per statistics of the International Energy Agency (IEA), the global demand for wood pellets is increasing by 14% every year. The present global wood pellet market is largely governed by demand trends, supply capacities, and the latest sustainability requirements. Palm kernel shells (PKS), either raw or torrefied, is potentially sustainable biomass having abundance availability at lower price and energy density similar to wood. Countries such as Japan, South Korea, and China are increasingly relying on PKS pellets owing to its stable market outlook for the next 5 or 10 years. This report provides an insight to the current global scenario of wood pellets along with the potentials of PKS as the new sustainable energy source. A succinct comparison of the available and protentional fuels has been provided with regards to large electricity generation power plants, such as Drax.