Forestry Grant Overhaul Doubles Funding to $50M But Requires Applicants to Pay 50% Upfront

This legislation, the Community Wood Facilities Assistance Act of 2025, is a major update to two federal grant programs that fund wood manufacturing and energy projects, primarily in rural areas. It renames and restructures the Community Wood Facilities Grant Program and the Wood Innovations Grant Program, essentially rewriting the rules on who qualifies for federal help and how much money is available. The biggest takeaway for anyone in the forest products industry is that while the total authorized funding is doubling to $50 million annually through 2030, the cost of entry for applicants is also jumping significantly.

The Cost of Entry Just Doubled

For the Community Wood Facilities Grant Program (formerly the Energy and Wood Innovation program), the government is asking applicants to put more skin in the game. Previously, you only had to cover 35% of the project cost yourself (the matching requirement). This bill raises that requirement to a strict 50% match (Sec. 2). For a small, community-run facility, that jump from 35% to 50% is a huge difference in upfront capital. This change is great for the government because it ensures applicants are serious and financially stable, but it could freeze out smaller businesses, startups, or non-profits that don't have millions in liquid capital ready to go.

Another significant change is the new hard cap on grant awards: $5,000,000 (Sec. 2). If you were planning a massive, multi-million dollar manufacturing plant that needed a $10 million federal grant, you're out of luck. This cap steers the program toward mid-sized projects, which might be a win for local communities but a hurdle for large-scale industrial development.

Expanding What Gets Funded

On the positive side, the bill broadens the scope of what these grants can fund. Both programs are shifting their focus from just incentivizing the use or retrofitting of existing sawmills to covering the actual construction, use, or retrofitting of forest products manufacturing facilities in general (Sec. 2, Sec. 3). This is a big deal for rural areas looking to build new facilities from the ground up, not just patch up old ones. For example, a company looking to build a new factory producing cross-laminated timber (CLT) or other engineered wood products can now apply for construction funds, which wasn't as clearly supported before.

Furthermore, the criteria for evaluating applications are getting a tweak. The program will now explicitly consider “market competitiveness” alongside “cost effectiveness” (Sec. 2). This signals a shift toward prioritizing projects that are more likely to be long-term commercial successes, which makes sense from a taxpayer perspective, but could mean riskier, truly innovative projects get passed over.

Technical Changes That Matter

There are also some technical revisions that impact specific projects. For facilities seeking grants for thermal energy production, the maximum energy capacity limit is being raised significantly from 5 megawatts to 15 megawatts of thermal energy (Sec. 2). This means larger community heating systems—say, a system heating a whole college campus or small town—can now qualify for this funding, making the program relevant to bigger energy users. Finally, the bill doubles the percentage of funds that must be used by states for certain activities from 25% to 50% (Sec. 2). This means states will have a larger role in managing and distributing a significant portion of the authorized funds, which could be a strain on state budgets if they aren't prepared to handle the increased administrative load.