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As an established bioenergy industry, the global wood pellet sector is ideally positioned to adopt biomass torrefaction technologies. In this review, potential benefits and challenges of integrating torrefaction within the pellet industry are reviewed and the required technological interventions to enable this integration are analyzed. It is apparent that integration would accelerate the commercialization of biomass torrefaction and benefit the wood pellet industry, torrefaction developers, as well as coal-based utilities. Torrefied pellets are expected to have distinct applications in power generation and help coal-based utilities to reduce their emission levels and comply with increasingly stringent regulations. Co-firing coal with black pellets requires little-to-no retrofit of the existing power plant and, therefore, can offer a low-cost solution. Two potential pathways, in either an upstream or downstream configuration, for retrofitting torrefaction within a white pellet facility are assessed. A successful upstream integration can potentially produce highly dense and durable torrefied pellets. However, the current limitations with this approach are (a) greater reactor volume required for torrefying wood chips and consequently high capital expenses (CAPEX); (b) difficulty in densification; (c) frequent maintenance requirements due to the abrasive nature of torrefied biomass; and (d) safety concerns from fine generation. Torrefaction as a downstream operation, wherein white pellets are subsequently torrefied to produce black pellets, has the benefit of being a simple bolt-on integration. Downstream integration eliminates the need for additional grinding and pelletizing capacity, while minimizing plant-wide contamination due to dust generated from the processing of torrefied biomass. Furthermore, CAPEX can be reduced, as a typical torrefier has significantly higher throughput when processing pellets compared to wood chips. The limitation of downstream integration includes the potential compromise in pellet quality, especially a loss in strength and density. While the benefits of integrating torrefaction are numerous, the techno-economics for each pathway should be further examined.