The GARDENA gardening expert
I don't think you should have any problems using class A1 and A2 wood pellets in the garden. Even pellets containing binders would not cause any trouble, as the binding materials used in wood pellet production consist of starch or molasses. Class A1 and A2 pellets are produced using virgin timber or, alternatively, from untreated wood residues, whereas class B pellets are made from industrial wood waste and untreated recycled wood. In this case it would be a good idea to ask the manufacturer how suitable the pellets are for garden use.
I would not advise using wood pellets as a top dressing for the lawn or for filling holes. It would almost be the same as using sawdust: over time, a hole filled with pellets would degrade until it was virtually a clump of wood. In a bog garden, the strewn pellets would remain on the surface for a while before decomposing, because they would be difficult to dig in under rhododendrons and similar plants that have roots close to the surface. However beds containing loose soil are a different matter — you can scatter about 200 grams of pellets per square metre and work them in using a soil grubber, for example.
The pellets will provide the soil with 0.5 to 1% of nitrogen nutrients. You should take this into account when planning to use fertiliser. As a wood-based fertiliser reduces potassium levels, you will also need to add about 20 grams of potassium fertiliser per square metre of scattered pellets. I recommend a potassium/magnesium fertiliser, or for bog gardens, a potassium sulphate fertiliser. You could either regularly scatter a thin layer of pellets on top of the compost or mix the pellets in with other compost right from the start. This is especially effective with grass cuttings or kitchen compost — they decompose more quickly together due to a better C/N ratio.