In the context of the European Union's intensified efforts to curb greenhouse gas emissions and meet climate targets, wood pellets have emerged as a pivotal element in the renewable energy strategy. Yet, biomass pellet combustion has been linked to a range of pollutants impacting air quality and public health. As biomass utilization gains popularity as a fuel for residential heating, it is important to determine this impact and enhance sustainable practices throughout the entire biomass energy production cycle. This study investigates the intricate dynamics of biomass pellet properties on their combustion emissions, with a specific focus on the differences observed between pellets of woody and non-woody origins. The data reveal a variation in pellet characteristics, especially regarding their ash and fines contents, mechanical durability, and impurity levels, and significant differences in the type and amount of utilization emissions. The results highlight potential health risks posed by the combustion of biomass fuels, particularly non-woody (agro) pellets, due to elevated concentrations of emitted particulate matter (PM), carbon monoxide (CO), nitrogen dioxide (NO2), hydrogen sulfide (H2S), ammonia (NH3), chlorine (Cl2), sulfur dioxide (SO2), and formaldehyde (HCHO), all surpassing recommended limits. Moreover, the study reveals that emissions from pellet combustion could be partially predicted by analyzing pellet characteristics. Statistical analysis identified several key variables—including bark content, fines content, mechanical durability, bulk density, heating value, net calorific value, sulfur, and nitrogen content—that impact emissions of CO, NO2, H2S, SO2, HCHO, and respiratory tract irritants. These findings underscore the need for proactive measures, including the implementation of stricter standards for fuel quality and emissions, alongside public education initiatives promoting the cleanest and safest fuels possible.