Federal Wood Facility Grants Quadruple to $5 Million, But Applicants Must Now Pay 50% Upfront

The aptly named Community Wood Facilities Assistance Act of 2025 is basically a major overhaul of how the federal government funds wood product manufacturing and energy facilities. If you’re in the business of building or upgrading a sawmill, a pellet plant, or a facility that uses forest products for energy, this bill changes the rules of the game—and significantly raises the stakes.

The Upgrade: Bigger Checks, Broader Scope

First, let’s talk money. This bill massively increases the potential payday for successful applicants. The maximum grant size for the newly renamed Facilities Grant Program (formerly the Community Wood Facilities Grant Program) is jumping from $1.5 million all the way up to $5 million per project (SEC. 2). That’s a huge injection of capital aimed at serious expansion and construction. On top of that, the total money authorized for this program is doubling from $25 million to $50 million annually from 2026 through 2030 (SEC. 2). This signals a major federal push to grow this sector.

The bill also broadens the types of projects that qualify. Facilities can now produce up to 15 megawatts of thermal energy, up from 5 MW, which means much larger energy projects are now eligible. Crucially, the legislation explicitly allows grants to fund the construction of new forest product manufacturing facilities, not just the retrofitting or upgrading of existing ones (SEC. 2 & SEC. 3). For a rural economy looking to attract a brand-new factory, this is a game-changer.

The Catch: You Need Deeper Pockets

Now for the fine print that will matter most to applicants: the cost-share requirement is getting tough. Right now, a recipient needs to cover at least 35% of the project cost themselves. This bill raises that minimum contribution to 50% (SEC. 2). This means that while the maximum grant is much higher, the financial barrier to entry is also significantly higher. For a $5 million project, you used to need $2.7 million in matching funds; now you need $5 million.

This change is going to hit smaller businesses and local community groups the hardest. If you’re a mid-sized operation or a local government trying to launch a small-scale wood energy plant, finding that extra capital for a 50% match could be a dealbreaker. The bill is clearly prioritizing projects that are already well-funded and can handle a much larger financial commitment, potentially favoring established players over new entrants.

Tightening the Focus and Adding Ambiguity

Two other key changes are worth noting. First, the bill tightens the focus of the grants to specifically target “forest biomass” and forest products manufacturing, moving away from the slightly broader “woody biomass” language (SEC. 2). If your facility relies on materials that don’t clearly fall under the ‘forest’ umbrella, you might find it harder to qualify.

Second, the government is adding “market competitiveness” as a new evaluation criterion alongside cost-effectiveness (SEC. 2). While this sounds sensible—no one wants to fund a failing business—it can be a subjective measure that might favor large, established industry models over innovative or niche projects. Finally, the Wood Innovations Grant Program now requires that at least 50% of the funds must be dedicated to a specific purpose, though the bill doesn't define what that purpose is in this section (SEC. 3). That kind of vagueness can lead to administrative confusion down the road, which is never good for applicants trying to follow the rules.