Coal is China’s dominant energy source, among which bituminous coal is the most extensive and plentiful. Using bituminous coal resources to design a low-emission household fuel is very important for rural poverty areas. In this work, a new type of bituminous coal pellet (BCP) fuel using an automatic prototype pellet stove was designed for the first time. This study mainly shows the emission characteristic results of BCPs and some comparisons with other commercial solid fuels. Fuel property, PM2.5 morphology, and ash characteristics of the novel fuel were also assessed. In terms of fuel properties, BCPs had a cold compressive strength of 637.2 N, a heating value of 22.26 MJ/kg, and many fine pores in the cross-section for air entry. The real-time emissions of BCPs were stable during combustion. The emission factors of PM2.5 and CO of BCPs were 1.36–2.29 g/kg and 11.1–18.0 g/kg, which were significantly lower than those of bituminous chunk and bituminous briquette (p < 0.05). PM2.5 and CO reduced emissions by 83–90% and 61–76%, respectively, compared with raw coal chunk. According to the chemical composition and morphological characteristics, the PM2.5 from BCP combustion can be divided into fine particulates, molten char particles, and char fragmentation. The ash from BCPs had a higher melting temperature (over 1300 °C), with removable ash agglomeration. Overall, the results presented in this study highlight that turning bituminous coal into pellets and burning them in automatic stoves could noticeably reduce PM2.5 and CO emissions, effectively improving rural air quality.