Our area has a freecycling network (
http://www.freecycle.org/). Check in there and see if your area has one and ask if anyone wants your shredded paper. Many people use it for their pet rodents, bedding for larger pets (cats, dogs), some shelters may want shredded paper for their pets.
It works for raising earthworms and for compost. You can buy logmakers and use them to compress your shredded paper into fireplace logs.
You have to be careful, though, as shredded paper is a huge magnet for rodents, silverfish, and other creatures we don't like in the house.