Timber Innovation Act and what it means for your business, county or state

October 4, 2018

Posted By Iris Dicke

In 2017, the Timber Innovation Act was introduced in the US Congress with the aim of facilitating the use of innovative wood products, such as cross-laminated timber and laminated veneer lumber in tall wood building construction up to 25 stories. Although the act failed to pass, it is now included in the Senate version of the 2018 Farm Bill as the Wood Innovation Grant Program.

What would it mean for businesses, counties, and states if the Wood Innovation Grant Program were included in the final version of the Farm Bill? Advocates of the program think that construction of tall wood buildings can catalyze job creation in construction and lumber mills in rural areas. For example, the proposed program would provide grants to retrofit sawmill facilities to make the innovative wood products needed for tall wood buildings in counties where the average annual unemployment rate exceeds the national average by more than 1% in the previous year. With a national unemployment rate of 4.4%in 2017, 791 out of 3,140 US counties would be eligible.

The states with the highest number of eligible counties are Georgia and Kentucky, which both have 64 eligible counties, and Michigan, which has 51. States like Georgia, whose timber industry is still recovering from the financial crisis, stand to gain from such grants, where more than third of the 64 counties eligible for these grants are home to sawmills.

Skeptics of tall wood buildings are often concerned about fire safety. Although fire and building codes vary by city, most cities do not yet permit or recognize wood-framed structures higher than four to six stories. However, the International Code Council has recently proposed a code change for the 2021 International Building Code. Based on extensive testing, the council found that mass timber products, such as cross laminated timber, resist fire through charring of the outer layer, which insulates the core and allows the product to maintain strength. In advance of the 2021 code change, the state of Oregon has become the first US state to change their building code allowing mass timber buildings above six stories.

Other arguments against tall wood buildings arise from producers of substitute materials, such as steel and concrete. These industries disapprove of any funding for mass timber construction as they argue it creates an unfair playing field. Proponents of tall wood buildings point out that the concrete and steel industries have been receiving funding for many years.

With the Farm Bill and International Building Code changes pending, the question is: how will states and building authorities respond? More importantly with increase in consumer demand for more bio-based products, such as innovative wood products, what should businesses, counties and states do?

Indufor believes that counties that meet requirements to receive a grant under the Wood Innovation Program and who have access to significant sustainable forest resources may see an economic boost if the bill is passed. Indufor has years of experience navigating businesses and countries through policy changes and shifting consumer demand. Our firm recently developed a market analysis to guide the state of Maine as it works to grow its forest economy. If you want to know more about the impacts of policy, regulation, or market change on your business, county, or state, contact us at indufor@induforgroup.com.

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Iris Dicke

Research Analyst

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