The use of biomass pellets as a source of renewable energy has increased in recent times. However, pellet storage during transportation can compromise their properties, due to fluctuating temperature and humid environments. Here, we show that extended storage of one month at 40 °C and 85% relative humidity causes significant biomass pellet degradation. This was evidenced by higher pellet porosity, weight gain, increased inclusion body formation and creation of an internal network of cracks. We quantify the inclusion and pore growth processes at the surface and within the pellets, which has implications for subsequent thermochemical conversion. The global bioenergy transition may depend upon biomass pellets, and this study shows that storage conditions are critical in the supply chain, so to maintain their quality. Without the development of stronger policies to avoid premature degradation of biomass pellets, they may not realize their full potential as a bioenergy source.