Motivation
Without businesses who repurpose material generated from fuel reduction and forest restoration treatments, the impact and threat of large-scale high-severity wildfires will continue to threaten our natural and working lands, public lands, and impact our public health through wildfire smoke. What can we learn from other industries, other regions in the US, or new advancements in technology in order to enable a more advanced bioeconomy?
Sustainably managing California forests and promoting community fire resilience, requires large investments beyond the capacity of public funding. Forest sector market development and innovation provides a pathway to integrate private capital with public investment, to mobilize powerful economic drivers that create economic opportunity, reinforce sustainable forest practices, and support community vegetation management and wildfire resilience. New and existing wood product businesses across California are struggling to survive. By focusing on the single issue of long-term feedstock contracts, this public-private partnership (P3) builds the foundation necessary to access financing and to assure business stability for new market development. With the growing need to develop wood product markets to support forest restoration activities, innovative feedstock aggregation mechanisms must be deployed to provide a stable and reliable long-term supply to the biomass industry in California.
History
Entrepreneurs and project developers focused on repurposing forest biomass all communicated similar issues between 2018-2021. This led to more serious action by public officials and dedicated funding by the Governor’s Budget in 2021.
In 2018, several proposed biomass-to-energy facilities looking to participate in California’s BioMAT program faced common challenges on permitting, feedstock contracts, and project management that limited their ability to move projects forward. To help address these issues, a team of consultants was engaged with Sierra Nevada Conservancy (SNC) funding to provide support on behalf of all participating facilities. The obstacles identified during this process became regular talking points and highlighted the need for more targeted funding to advance regional approaches to biomass utilization.
Between 2018 and 2021, further solutions began to take shape through listening sessions, direct project development, and feedback from local communities and elected representatives. A recurring theme was the difficulty of securing long-term feedstock contracts – a prominent barrier across all proposed facilities both affiliated and separate from the BioMAT program. In response, Conservation Strategy Group (CSG) worked with stakeholders to develop a concept paper outlining potential pathways forward. This work ultimately became a foundational element of the Wildfire and Forest Resilience Action Plan, where it was adopted as a Key Action to guide future investment and policy support.
Reports
- Conservation Strategy Group (2020) “Forest Resilience Authorities: How regional wood waste management can support forest health, climate mitigation, and economic development goals”
- CLERE Inc (2020) “Lack of Feedstock Supply Reliability Impedes Capital Investment in Wood Utilization”.
- Sanchez & Gilani (2021) Advancing Collaborative Action on Forest Biofuels in California. Joint Institute For Wood Products Innovation. Feb. 2022, p. 68
- Elkind, E., Lamm, T., & Segal , K. (2022). Branching Out: Waste Biomass Policies to Promote Wildfire Resilience and Emission Reduction. Center for Law, Energy & Environment: UC Berkeley.
Concept
How can we leverage our local governments and public agencies to address this issue as a single, regionally-coordinated body? Where private markets have yet to solve the problem, this program views business development for biomass utilization as an issue of public interest, and as such, a core issue to dedicate staff time and funding from our public servants.
Referred to as LCI pilot projects, or the California Forest Residual Aggregation for Market Enhancement (CAL FRAME) model, the concept proposes to create “biomass supply management entities” that could provide a regionally tailored, public process to aggregate raw fiber sales to existing or new markets through a centralized semi-public entity within a region. While this is possible through the physical handling of material through a sort yard, the concept explored administrative means of stacking smaller biomass contractors into a single master agreement.
The LCI program invested in 5 pilot regions to explore this concept with the overall goal to support wood-based businesses in their efforts to secure reliable, long-term feedstock supply. By addressing the long debated issue of supply inconsistency from non-industrial and federal lands, the program assumes that providing long-term feedstock supply will thereby enable economically viable outlets for forest health and fuel reduction projects. As a result, a dedicated entity to coordinate this service would do the following:
- Establish itself has a trusted resource on existing and new fiber markets for licensed professionals,
- Make progress towards offering long-term supply contracts for new fiber-consuming businesses to receive debt financing,
- Indirectly enable additional acres to be treated by supporting market-based solutions
A number of entities were investigated to support this main goal including Joint Powers Authorities (JPA), Conservation Service Districts (CSD), Public Agencies, and the recently created Climate Resilience Financing Districts (CRD). While these options reflect the need to incorporate the issue of biomass into the public service sector, the North Coast pilot region explored alternative options such as cooperative and nonprofit models due to their limited administrative capacity to set up a JPA, CSD, or CRD.
Without a centralized entity, biomass utilization remains fragmented, underfunded, and disconnected from larger climate and wildfire mitigation goals. Ultimately, this program aimed to treat biomass management as a public interest and leverage public assets to overcome long-held barriers to market growth.
Program Impact
In total, the program has leveraged $7 million with over $5 million dedicated to region-specific biomass market development strategies.
In Fiscal Year 2021-2022, OPR was appropriated $3 million from the Wildfire and Forest Resilience Early Action Package (SB 85), to support the development of five feedstock aggregation pilot projects. In Fiscal Year 2022-2023, OPR was provided an additional appropriation of $2 million under AB 179, to enhance forest sector market development and to facilitate implementation of the pilot projects.
In 2022, OPR awarded $2.5 million to launch the pilots through five grants, each in the amount of $500,000 to Fall River RCD, Marin RCD, County of Humboldt, Placer County Water Agency, and Mariposa County RCD. An additional $350,000 was awarded to the University of California at Davis, Cal Poly Humboldt and Cal Poly San Luis Obispo to produce a digital marketplace, using remote sensing data and artificial intelligence, in an enhanced web application to coordinate biomass aggregation and to facilitate an online exchange between buyers and sellers of forest biomass within the OPR pilot project regions.
Timeline
The program was given additional funding every year between 2021 and 2023. The culmination of all deliverables and findings occurred in March 2026. The statewide program will continue to seek additional funding based on the selected action plans defined by each region.