A 2(3)-factorial experiment was carried out in an industrial plant producing biofuel pellets with sawdust as feedstock. The aim was to use on-line near infrared (NIR) spectra from sawdust for real time predictions of moisture content, blends of sawdust and energy consumption of the pellet press. The factors varied were: drying temperature and wood powder dryness in binary blends of sawdust from Norway spruce and Scots pine. The main results were excellent NIR calibration models for on-line prediction of moisture content and binary blends of sawdust from the two species, but also for the novel finding that the consumption of electrical energy per unit pelletized biomass can be predicted by NIR reflectance spectra from sawdust entering the pellet press. This power consumption model, explaining 91.0% of the variation, indicated that NIR data contained information of the compression and friction properties of the biomass feedstock. The moisture content model was validated using a running NIR calibration model in the pellet plant. It is shown that the adjusted prediction error was 0.41% Moisture content for grinded sawdust dried to ca. 6-12% moisture content. Further, although used drying temperatures influenced NIR spectra the models for drying temperature resulted in low prediction accuracy. The results show that on-line NIR can be used as an important tool in the monitoring and control of the pelletizing process and that the use of NIR technique in fuel pellet production has possibilities to better meet customer specifications, and therefore create added production values. (C) 2008 Elsevier Ltd. All rights reserved.