More than 200 tonnes of wood chippings caught fire at an industrial unit in Meare near Glastonbury, Somerset.
Devon and Somerset Fire and Rescue Service said it was called on Sunday morning to an industrial unit on Ashcott Road.
The chippings are believed to be in a wood-processing machine at the centre of a large industrial building.
The fire service said eight units were called out and an incident support unit was also deployed.
Paul Godwin from the fire service said the "extensive" fire, which began at about 08:00 GMT, was put out inside two hours.
"Early indications are that there was a fault inside the mechanics of the machine which led to the fire."
Site staff tried to put out the fire before calling the fire service. There were no injuries.