FRANKLIN—ATC Panels is looking into several options for its Franklin mill, including an idea to possibly manufacture wood fuel pellets for residential and industrial use, both domestically and abroad.

According to the Pellet Fuels Institute, a nonprofit association based in Arlington that serves the pellet industry, pellet mills across the country manufacture fuel pellets from wood and other biomass waste products. Sawmills provide some of this wood to pellet mills, which in turn sort, grind, dry and compress the wood into a pellet form.

“The pellets generate heat at a controlled, measured rate,” said Tom Garrahan, the plant manager for ATC Panels’ Franklin mill. “They can be used for residential stoves, which are very similar to wood-burning stoves. There are also some industrial applications, such as for steam boilers, which so far are more common in Europe than in the U.S.”

Garrahan said pellets manufactured for domestic use would more than likely be put into 40-pound bags. Pellets shipped overseas to Europe, however, would be sent in bulk, possibly in a container.

According to the online Wood Pellet Fuel Organization, in 2008 there were approximately 850,000 American homes using wood fuel pellets for heat, in stoves, fireplaces and furnaces. Pellets were also being used in schools and factories.

Garrahan said that if ATC Panels did decide to make wood fuel pellets at its Franklin mill, the company would need to purchase and install a pelletizing machine. The unit would be very similar to ones that manufacture animal food pellets, but the wood fuel pellets would be larger in diameter.

The types of wood coming in to the plant — which is currently geared toward making particle board for the furniture industry — could stay the same.

“We are fairly particular about the wood materials we use to make particle board,” he said. “We don’t use any bark to make particle board. But with the pellets, we could use a slightly broader range of wood materials, including bark. We could probably be a bit more lenient.”

Garrahan said other organic materials, such as peanut hulls and straw, could be used to make the pellets, but he said it was unlikely those materials would ever be used to make pellets at the Franklin facility.

PFI said more than 80 pellet mills across North America produce more than 1.1 million tons of pellets per year. WPFO lists three manufacturers of the pellets in Virginia: Potomac Supply Corp. in Kinsale, Turman Hardwood Flooring in Galax, and Equustock LLC in Chester.

But there is no guarantee that ATC Panels will be making the wood fuel pellets in Franklin. The company is not making the pellets anywhere at the moment.

“The ownership is investigating multiple alternatives for the Franklin site,” Garrahan said, adding that the concept of manufacturing the pellets in Franklin is “certainly not (going to happen) in the next couple months.”

Garrahan said cited uncertainty over the market for wood fuel pellets because it is relatively new, and there are questions about the long-term demand for pellets. However, the demand for particle board and for fuel pellets were independent of each other, he said.

The mill, located just outside of the Franklin city limits in Isle of Wight County, employs 20 people, down from the more than 130 it had working there several years ago.

Garrahan said the particle board industry has been in decline for the last 15 years, but that decline accelerated during the last seven years and even more so in today’s economy.

“Personally and professionally, I hope we can someday bring back the very good people we had working here,” he said.