Pencil and other wood shavings such as saw dust can go in your green lidded food and garden organics/FOGO bin. The wood shavings provide a great source of carbon, which an important component of compost.
You may also add small amounts to your own compost bin, particularly if you have a lot of wet food materials in your compost. Sawdust is considered a ‘brown’ composting material. It is used to add carbon to the mix and to balance the nitrogen from the ‘green’ composting materials like food.