According to the characteristic of elastic-plastic deformation in the forming process, a model of contact and heat transfer in the closed biomass thermal compression process is established on the basis of EDEM discrete element analysis software. A program is developed based on the interface design of API, and a simulation analysis of closed biomass thermal compression is carried out under conditions of different die diameter and dwell time parameters. The simulation results show that with the increase of compression, the heat transfer of forming process is accelerated, and the core temperature of the largest compression column of biomass molding fuel is higher compared with the smallest one at the same time. With the die diameter increases from 10 mm to 20 mm and 30 mm, the core temperature of the biomass molding fuel decreases although the contact area of die and biomass fuel increases at the same compression volume. The reasonable setting of the holding time is significant to the fuel forming quality and energy saving.