Market Development

Department: Office of Planning and Research

Program Description: Diverting forest residues for productive use can help increase the pace and scale of forest restoration efforts in California, reducing vulnerability to wildfire, supporting rural economic development, and promoting carbon storage. The Wildfire and Forest Resilience Action Plan identifies the development of, and access to, markets for these residues as a key barrier to conducting necessary treatment activities across priority landscapes in the state. The development of such a market for residues has been hampered by the lack of any centralized broker capable of entering into long-term feedstock supply contracts.

To address this challenge, OPR has funded five pilot projects to develop regional strategies to establish reliable access to forest biomass through a variety of feedstock aggregation mechanisms and organizational innovations. The pilots will develop plans to improve feedstock supply chain logistics within each target region through the deployment of a special district with the authority and resources to aggregate biomass and facilitate long-term feedstock contracts. Each pilot will assess market conditions, evaluate infrastructure needs, and work to enhance economic opportunities for biomass businesses in their project regions. The pilots are distributed across 17 counties in the Central Sierra, Lake Tahoe Basin, Northeast California, North Coast and Marin County.

Program Impact: 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.

At present, OPR is in the process of updating project scopes and amending each grant agreement to provide additional funding to finance implementation of the pilots and to complete the construction of the web application.

Resilience in Action: Through the deployment of the pilots, OPR is supporting capacity building within local governments to improve landscape resilience to wildfire, increase forest biomass aggregation and enhance market development for wood products. The development of the OPR pilot program has sent a strong demand signal to the market not only in California but across the country and around the world. In response to these strategic planning activities, OPR has received strong interest from the biomass industry ranging from biofuels, bioenergy, biochar, CLT and mass timber producers. In anticipation of the OPR pilots and their project activities, a dozen or more biomass industry members have been actively coordinating with OPR, GO-Biz and I-Bank to evaluate project sites and secure funding for biomass facilities within the five OPR pilot project regions. These businesses have expressed strong interest in investment opportunities that otherwise would not be financially feasible without the feedstock aggregation activities under development within the OPR pilots. Based upon the interest expressed through biomass business inquires at GO-Biz, the project has sent a strong demand signal to the biomass industry that California is ramping up and creating an attractive economic environment to drive sustainable forest management and increase community fire resilience benefits.