ESFPA E-News

PPI Latest Climate Report

The Progressive Policy Institute (PPI) recently released a report warning that New York is entering a climate and energy cost crisis as the state falls far behind its statutory decarbonization mandates. 

Key findings from the report:

• Electricity prices are 44% higher than the national average, and residential rates have risen 36% since 2019, nearly three times faster than the rest of the country. New Yorkers pay 24.4 cents per kilowatt hour, compared to 16.5 cents on the US average, the report showed. (This is without many costs for green energy and yet to be built transmission and distribution coming online.)
• Utilities are pursuing additional rate hikes of roughly 20%, driven by aging infrastructure, storm repairs and rising operating costs, adding further pressure on households already facing higher energy bills.  (Something we were going to face with or without the CLCPA and what is driving bullet #1.)
• New York is behind on nearly every major climate mandate, including offshore wind, which is 1% operational, and energy storage, which is 8% operational toward 2030 goals. Only solar power is on track. (Inevitable given the costs, supply chains and goals.)
• Fossil fuels still supply nearly half of New York’s electricity, and the “premature” closure of Indian Point nuclear power plant in Westchester — a major supplier of zero-emissions energy to the Big Apple — slowed the state’s progress for clean energy. (Let alone anticipated demand of.) 

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New York Aims to Plant 25 Million Trees by 2033 to Combat Climate Change

New York is advancing a major reforestation initiative tied to the state’s Climate Act, which aims for carbon neutrality by 2050. As part of the plan, the state intends to plant 25 million trees by 2033, with forests expected to absorb the remaining 15% of greenhouse gas emissions after reductions. Although only about 361,000 trees have been recorded in the state’s tracking system since early 2024, officials expect the pace to accelerate as the Department of Environmental Conservation develops a comprehensive reforestation plan, slated for public review in 2026. Early efforts include programs like NYPA’s 2025 Tree Power, which recently distributed over 1,600 trees statewide.

The forthcoming reforestation plan will reflect input from more than 200 professionals and 13 state agencies, addressing challenges such as balancing reforestation with other land uses like agriculture, energy development, and housing. A key opportunity lies in converting up to 1.6 million acres of unused former agricultural land, though participation depends on landowner willingness. New York, already 62% forested, has a long history of reforestation dating back to the early 20th century, and today its forests store nearly 2 billion metric tons of carbon. The new effort builds on this legacy to help meet the state’s climate goals.

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Let's Put 2025 in the Rearview Mirror 

From the Northern Logger Magazine by Eric Kingsley

Most people engaged in the Northeast’s forest industry are ready to move on from 2025. While this year hasn’t been a complete loss, markets aren’t strong, policy uncertainty has stalled decision-making and investments, and nothing the industry spends money on is getting cheaper.

Markets

Let’s start with markets. Across the region we have diverse markets for a range of products – sawlogs, pulpwood, and biomass. These mills aren’t as plentiful as they were a decade or two ago, but we have a market for everything that makes its way to the landing. Unfortunately, these mills need strong demand for their products – lumber, paper, electricity, wood pellets, panels, and more – to create demand that works its way back to loggers and landowners.

Let’s start with lumber. While lumber goes into so many products, much of the story of lumber markets can be told by looking at housing starts. Softwood lumber frames the structure, and hardwood lumber is often (though not often enough) used to finish the house and make it a home. Housing starts were generally trending upward from 2010 (when we came out of the Great Recession, which was tied to housing) through early 2022, with a notable exception of a few months early in COVID. Since then, housing starts have been flat.

That means fewer houses are being built, and less lumber is needed. We’re seeing this in reduced demand at many mills, with some cutting shifts or otherwise slowing production. We’re faring better than some other areas of the country, however, that have seen mill curtailments that look permanent (or at least very indefinite). Tariffs and duties (which look a lot like tariffs but are established through a separate process for a separate purpose) have upset the market, with occasions where Canadian lumber has flooded into the United States – depressing prices for the period where that lumber works its way through the system. At the same time, some border mills in Canada have reduced their purchase of logs from the US, causing challenges for the loggers and landowners that have long relied on those markets.

Much of the story of lumber markets can be told by looking at housing starts.

For hardwood mills, the market is brutal. Export markets for both logs and lumber are clearly victims not only of a trade war but also facing a changing market. Across the country, hardwood lumber production is about a third of what it was before the housing (and economic) crash of 2008. Major markets were lost in 2018 when China imposed retaliatory tariffs on hardwood lumber exports – and those markets weren’t recaptured when the tariffs were lifted. Since that time, markets have further eroded, in part due to international trade issues, but also due to changing consumer tastes and lower cost alternatives. In a sign of how tough things are, a recent effort spearheaded by The Hardwood Federation, a trade association representing the hardwood industry, asked the Trump Administration to include the hardwood sector in any tariff relief package developed to address trade war-based challenges experienced by the broader agricultural sector.

On the paper side, things are better, but far from good. Consumer demand for many products made in the region is not as strong as it could be, with mills quietly cutting back production to meet demand. Operational issues at a few pulp and paper mills have caused some unexpected downtime, further reducing demand. At the end of 2025, Woodland Pulp in Baileyville, Maine, announced it was taking a month of market-related downtime, planning to start back up in late December when inventories meet market conditions.

All of these factors contribute to reduced demand for pulpwood across the region. While this isn’t the catastrophic loss experienced a decade ago – when a series of pulp and paper mills closed in just a few years – it does raise a concern about the reliability of this market, and the need for new and expanded markets for low-grade wood.

On the plus side, many mills have made meaningful capital investments in their operations. The clear leader in this area is SAPPI in Skowhegan, Maine – this year the company completed a half-billion-dollar project to convert and expand production on Paper Machine No.2, positioning the mill as a leader in packaging with North America’s most advanced paper machine.

Biomass power has been – surprisingly – a bright spot. It remains a challenge for some of the older, smaller plants in the New England fleet to compete, but higher wholesale electricity prices (which spiked in Winter 2025) allowed many biomass plants to run profitably, providing a market for biomass chips, sawmill residuals and other low-grade wood. The region’s largest biomass power plant in Berlin, NH, is set to emerge from bankruptcy with a new ownership group, new management, and a plan for long-term operations. Other plants have been trending toward winter and summer operations only, when wholesale electricity prices are at their strongest. The market – and the region’s policy environment – aren’t strong enough to support the construction of new facilities but have proven enough to encourage operations at existing assets.

Policy Environment

No matter how you view the Trump Administration, it is fair to say that their approach to international trade has shaken things up. By deploying tariffs as a primary tool of international trade – a tactic not in widespread use for the better part of a century – the world order has been shaken, and it remains to be seen where things end up. At this writing, the president’s ability to use tariffs using the law that he has repeatedly cited as providing him this power is under Supreme Court review. If the courts reject his ability to implement tariffs under the 1977 International Emergency Economic Powers Act, expect some level of chaos in the entire economy as government, business, and others try to figure out what comes next.

Tariffs, and the uncertainty and apparent fluid nature of any tariff decisions, have impacted decision-making across the entire economy; the forest industry is no exception. For example, if a new Oriented Strand Board mill is to be built in Maine – providing a much-needed market for low-grade pine and other species – only two companies build the required presses, both based in the European Union. Goods from the EU – including industrial equipment – are currently subject to a 15% tariff, raising the price of building a factory. However, an even greater concern is what the tariff will be in 12 to 18 months when the OSB press is built and delivered – that’s when the tariff is due.

This is but one example of how a rapid change of moving from a nation favoring free trade to an international trade policy built upon tariffs is causing companies to pause while they better understand both their costs and opportunities. The current shifting tariff environment, and the rapid move from one trade philosophy to another, makes for significant uncertainty and can contribute to delayed decision making – stagnating the market and delaying or even terminating opportunities to stabilize and grow the region’s economy.

What the industry really needs here are two things – clarity, and demand. Clarity on what the trade environment looks like long-term so that firms can make rational investment decisions, and market demand, so that the mills can move product – and thus buy wood that supports the landowners, loggers, truckers, and responsible forest management. There are, of course, numerous policy levers that can be used to support demand for forest products, but currently, trade policy has been such a disruptive force that it’s hard to focus on anything else.

Costs and People

Nothing is getting cheaper, and that is impacting the entire forest industry supply chain. Timber harvesting equipment prices continue to climb, in part due to increased raw material costs as a result of tariffs. Diesel remains stuck around $4 per gallon, though the futures market suggest that price will drop in 2026. The workforce is aging, and finding people to enter the field and build skills remains a challenge, as it is for all rural industries.

As a result, we’re seeing some shifts in how things are done, and it’s not yet clear if this is just the beginning of a trend. In Maine, one large landowner is now also a large logging firm, purchasing, staffing, and operating six logging crews on their own land. The company has said this move is to strengthen long-term financial performance by controlling their own destiny. Other landowners and land managers – as well as many independent timber harvesting contractors – are watching this to see if it provides harvesting capacity and stability at a reasonable cost.

We’re also seeing landowners look to new non-timber revenue sources as a way to bolster their economics. On some timberland the sale of easements, high-value properties (e.g., lakefronts, or near major roads) and leasing of land for renewable energy development (wind and solar) has already occurred. The next non-timber revenue source for many appears to be ecosystem services – primarily carbon. How common this becomes, and its impact on timber harvesting and wood supply in the future – remains to be seen, but many landowners are viewing this as an opportunity to make money from the forest in a way that augments revenue from selling timber.

What’s Next

2025 hasn’t been a great year for the Northeast forest industry, but we remain to fight another day. The region has a vast private timberland resource that grows more than is harvested, a supply chain infrastructure experienced in efficiently moving wood from the stump to the mill, and a variety of markets that provide outlets for a range of species and grades. We have several high-profile projects under development across the Northeast that – if successful – will provide for the development of new, innovative forest products. We sit atop and among the greatest collection of consumers in world history – the Eastern Seaboard of the United States – and this provides the region with near limitless opportunities to rethink and innovate across the forest products sector.