Senator Paul Utke (R-Park Rapids) on March 9 presented legislation that would create a Pellet Incentive program. This bill would allow the Commissioner of Commerce to make payments to eligible industrial wood pellet producers for up to 10 years after the producer begins production, at $25 per ton. This legislation seeks to provide financial incentives for the production of industrial wood pellets in Northern Minnesota. The proposed plants would be located in Bemidji and/or Grand Rapids.
Sawmill residuals, the byproducts created when making lumber, and forest residues, the unused portions of the harvested trees and materials from diseased, distressed, or burned trees would be used to make the industrial wood pellets. Benefits to this bill include the creation of new jobs, an increase in wages, $17 million per year in export revenue, over $56 million in Annual Economic Activity plus providing beneficial revenue to the School Trust Lands, and improvement of forest health.
“We are a state with a lot of forested lands, approximately 18 million acres. Minnesota has a strong logging history, but in recent years we have witnessed a declining industry. We have lost a number of sawmills and wood processing facilities.” said Senator Utke. “If there had been a market for residual byproducts, maybe these businesses would have fared better. This bill gives us a chance to return market potential back to Minnesota. This incentive program is economically good for the area, it will revitalize the industry, and it will provide a new energy source for our state’s economic and environment future.”
Funding for this project would come from Minnesota’s Renewable Development Account, which typically supports investments in bioenergy projects.
“I’m excited about this bill and the potential it holds,” said Senator Utke. “What we’re talking about would open our state up to the renewable energy market, while also improving forest health. This is a great, cost-effective way to help out our businesses while creating jobs across the State.”