Well, first of all, it is worth noting that I am always careful to buy the bags that say 100% organic, which means that they are composed completely of sawdust. Wood pellet fuel is made of sawdust that is dried and pressed into little pellets. When you add water to them, they swell and fall apart into sawdust. It is also worth noting that a 40 pound bag of wood pellet fuel costs about $4.
Where else are you going to get such a wonderful garden supplement for so cheap? I use wood pellet fuel as a mulch, I mix it in to soil to build organic content, and I use it as a compost amendment. For mulch, you scatter a little on the ground and then water. Be careful about how much you put down. A solid layer one pellet thick will give you about 2 inches of mulch once it has been watered, so they do swell up quite a lot. I have smothered many seedlings because I mulched too heavily with wood pellet fuel. For mixing into soil, add a few handfuls here and there to the soil as you are working it. It will add to the organic content of the soil and give the organisms in the soil something to feed off of. Again, too much is bad as large concentrations of sawdust will rob nitrogen from your soil, which isn’t good for your plants. For a compost amendment, you just throw a couple of good handfuls in the compost as needed, usually when the compost starts getting smelly. I added a small bucket of wood pellet fuel to my tumble composter this summer and almost immediately, it started to heat up, finally achieving the mix it needed to really cook. Three weeks later, it cooled off and a week after that, the compost was done and ready to use.
Consider checking out your local supply of wood pellet fuel and maybe you can put some of that precious carbon in your soil instead of putting it in the air.
Oh, and it is worth mentioning that wood pellet fuel doesn't work very well as a medium for growing mushrooms. Most mushrooms are pretty specific about whether they prefer to grow on hardwoods or softwoods. I have yet to find any wood pellet fuel that tells you what its composition is. This means that it could be 100% hardwood, 100% softwood, or, more likely, some combination of the two.