From Wildfire to Wealth

Industry Investment Rating - The report highlights the potential for businesses processing low-value small-diameter trees into mass timber products to address wildfire risks, affordable housing shortages, and job creation in Colorado [20] Core Viewpoints - Colorado's forests face increased wildfire risks due to climate change and overstocking, presenting both challenges and opportunities for the state [24] - Mechanical thinning can reduce wildfire risk and improve forest health, but the process is costly and often results in low-value small-diameter trees being burned or left to decay [25] - Utilizing biomass from forest thinning for mass timber products can recover value, offset thinning costs, and reduce carbon pollution by replacing steel and concrete in construction [28] - Mass timber represents a triple win for Colorado, improving forest health, reducing carbon pollution, and creating jobs in rural and disadvantaged communities [30] Supply: Feedstock Availability - Colorado's gross standing tree volume is estimated at 25.8 billion cubic feet, with 51% suitable for conventional sawlog markets, 26% classified as other log, and 22% as non-log material [32] - Approximately 60% of other log material consists of softwoods like spruce, lodgepole pine, and ponderosa pine, which are suitable for mass timber products [33] - The 2020 Colorado Forest Action Plan identifies 2.4 million acres of forest in need of management, with an estimated 0.67 billion cubic feet of timber potentially harvested from thinning over the next 30 years [36] - Federal land management challenges and limited local harvest capacity pose significant barriers to increasing feedstock supply [39] Value Chain: From Forest to Factory - Colorado currently imports 90% of its wood products, with declining sawmill capacity and a shortage of workers in the forest products sector [42] - Distributed manufacturing models could reduce capital costs and transport distances for green logs, but small-scale processing technologies for some products like wood fiber insulation are not yet cost-competitive [45] - Vertical supply chain integration and colocating multiple product manufacturing lines could optimize feedstock use and improve economics [46] Demand: Colorado Market Applicability - Mass timber, particularly CLT, is suitable for mid-rise multifamily and commercial construction, with the most economical range being 8 to 12 stories [49] - Hybrid systems combining light frame wood walls with mass timber floor and roof panels offer economic advantages and construction speed for buildings limited to five stories [50] - Mass timber is less cost-competitive for low-rise residential construction, but smaller-format panels may simplify air sealing and allow for greater prefabrication [53] Product Market Fit - Utilizing small-diameter timber from forest thinning for mass timber products poses challenges such as lower lamella yields and lack of design values for uncommon species [60] - Products like DLT and NLT offer low-barrier-to-entry opportunities with simpler manufacturing processes and reduced reliance on synthetic resin adhesives [65] - Emerging wood products and digital fabrication techniques could unlock new business models for using low-value forest management residues [69] Conclusion - A phased approach is recommended for growing resilient forest economies in Colorado, starting with rightsizing small-scale businesses in the near term and planning for larger-scale operations in the long term [73] - Interdisciplinary collaboration among regional stakeholders is essential to scale wood products supply chains and ensure a resilient, climate-aligned forest economy in Colorado [77]