In this study, wood sawdust as waste residue from wood processing mills was pretreated using torrefaction to improve fuel properties and densified to facilitate transportation. Sawdust was torrefied in a fixed bed reactor using inside temperatures (IT) of 230, 260 and 290 °C for 15, 30 and 45 min, residence time. Due to the low calorific value of the treatments, the outside temperature (OT) of the fixed bed reactor was used instead for a fixed duration of 45 min, which resulted in an increase in energy value by 40% for the most severe conditions. The mechanical strength of the pellets was enhanced by adding 20% binder (steam-treated spruce sawdust) to biochar, which improved the pellet tensile strength by 50%. Liquid by-products from the torrefaction process contained furfural and acetic acid, which can be separated for commercial uses. Thermochemical analysis showed better fuel properties of OT torrefied samples such as high fixed carbon (52%), low volatiles (41%) and lower oxygen contents (27%) compared to IT torrefied samples (18, 77 and 43%, respectively). Low moisture uptake of torrefied pellets compared to raw pellets, along with other attributes such as renewability, make them competent substitutes to fossil-based energy carriers such as coal.