Proposed California Pellet Mills Refocusing

Numerous environmental groups are gleefully self-praising over the announcement that Golden State Natural Resources (GSNR) is backing away from building two large industrial wood pellet mills in California—a mill in the central Sierras in Tuolumne County and a mill in northern California in Lassen County, as well as a storage and export terminal in Stockton, Calif. These facilities would have produced and shipped wood pellets overseas as fuel for electricity facilities.

According to an article released on the Natural Resources Defense Council (NRDC) web site:

“We spelled out the writing on the wall: GSNR’s biomass boondoggle is not welcome in California communities,” comments Rita Vaughan Frost, described as a forest advocate for NRDC.

“Stopping this dirty, dangerous wood pellet export project is a big victory for communities, the climate and our forests. Our forests shouldn’t be fed to the woodchipper for polluting biomass pellets shipped overseas,” says Shaye Wolf, climate science director, Center for Biological Diversity.

“We have watched for decades as the dirty biomass industry has been buoyed by taxpayer subsidies and then collapsed once this corporate welfare runs dry. We are not surprised to see GSNR pivot away from their colossal pellet scheme as planned that required subsidies at every step of the process and left our communities with more pollution, greater fire risk, and our forests ravaged by increased logging,” adds Nick Joslin, policy and advocacy director, Mount Shasta Bioregional Ecology Center.

GSNR was formed in 2019 as a nonprofit public benefit corporation, established by rural counties in California to address the urgent issue of catastrophic fires from overgrown and under-managed forests. GSNR wants to increase the pace and scale of forest treatments across California to improve forest resilience, reduce wildfire risk, and support long-term ecosystem health.

This effort is supported through a 20-year Master Stewardship Agreement with the U.S. Forest Service (USFS) as well as a blanket purchase agreement with USFS.

The entity subsequently proposed a “forest resiliency demonstration project,” including the two wood pellet plants and the shipment location, and proceeded through the required draft Environmental Impact Report (EIR) process, including a 90-day public commentary period that ended on January 20. GSNR planned to review those comments and then submit a final EIR to the Golden State Finance Authority Board for final certification later this year.

However, in an unexpected development, GSNR in late June said that once it reviewed these comments, and considering “current biomass market conditions,” the Board directed its staff to develop and analyze a reduced-scale project that focuses on domestic rather than international usage of the sourced wood material, and that produces wood chips instead of wood pellets.

“By supplying biomass domestically to emerging green industries in sustainable fuel production and innovative wood products, GSNR’s reduced-scale project not only increases forest resiliency, but directly supports sustainable biomass use innovation in accordance with state and federal goals,” comments GSNR President Patrick Blacklock. “With these revisions, GSNR maintains its ongoing commitment to build wildfire and forest resilience in California and spur economic opportunities in rural communities.”

Specifically, GSNR reports the revised project proposal would include the development of two wood chip processing facilities at the locations of the previously planned wood pellet mills. The finished chips would then be transported by rail to “downstream users and emerging market hubs in California and adjacent areas,” such as alternative energy solutions including sustainable aviation and marine fuels, bioenergy with carbon capture and storage, or even wood products such as oriented strandboard.

Consequently GSNR is currently revising the previously released DEIR to reflect these project changes and anticipates recirculating the revised report, with an updated evaluation of potential environmental impacts, in early 2026.

The original (wood pellet mills) proposal called for a 700,000 metric tons (772,000 tons) facility at one site and 300,000 metric tons (331,000 tons) at the other, requiring a combined green feedstock of 1.73 million metric tons (1.91 million tons), with chips/sawdust accounting for the majority but with roundwood a significant percentage.

In backing away from this proposal, GSNR stated it would have required additional finances to complete the pre-construction environmental process as required by California, and greater long-term capital outlay for the pellet plants and export facilities.

Whereas the new proposal for two chips mills to feed domestic markets “significantly lowers the project’s capital cost and environmental footprint,” and improves the “feasibility of near-term deployment.”

The two facilities combined would be designed to produce 1.14 million green metric tons (1.26 million tons) per year, with the larger facility feedstock about half roundwood processed into chips, and the smaller facility using no roundwood.

GSNR says this proposal would significantly reduce environmental impacts in several areas, including air quality and greenhouse gas emissions, especially considering the removal of the Port of Stockton export facility in the proposal. And it would create opportunities for GSNR to develop a broader in-state coalition of support around forest restoration, rural economic development, and carbon-neutral innovation.

However, environmental groups are also saying “not so fast” to the chip mills proposal. The NRDC stated of GSNR, “While they may be donning the new clothes of wood chip production, we are ready to analyze the climate, forest, and community impacts of this newest iteration. Large-scale wood chip production could still harm California forests, communities and climate, and could increase air pollution, particularly around sensitive communities. As GSNR reimagines its product development from wood pellets for export to domestic wood chipping.”