Legislators Propose Tax Incentives to Attract German Company
Company would partner on Hayward plant turning wood pulp into aviation fuel.
The Wisconsin State Capitol on Wednesday, Aug. 6, 2025, in Madison, Wis. Angela Major/WPR
Wisconsin lawmakers are unveiling proposed tax incentives designed to bring a wood pulp plant to northern Wisconsin.
If the project takes off, pulp from that facility would be used to make fuel for planes and other aircraft. Officials are eyeing a site for the wood pulp plant in Hayward, on a property that adjoins an existing LP Building Solutions manufacturing plant.
Five years ago, the Verso paper mill in Wisconsin Rapids shut down. That plant was a major consumer of pulpwood, and its closure left a “big hole” in Wisconsin’s pulpwood market, said state Senate President Mary Felzkowski, R-Tomahawk, who’s among the sponsors of legislation announced Monday.
Starting this year, airports within the European Union must use at least 2 percent of what’s known as Sustainable Aviation Fuel, or SAF, within their fuel mix. The United States does not currently impose such requirements, but the EU is set to increase its mandated SAF percentages in coming years.
SAF is an alternative to fossil fuel, and the goal of those requirements is to cut back on carbon emissions. SAF can include biofuels, such as energy made from pulped wood.
“There is going to be an increasing demand for this type of fuel, and we are right at the forefront here in Wisconsin,” Felzkowski said during a Monday morning news conference at the state Capitol.
A German company called Synthec Fuels is looking to run the plant in partnership with Wisconsin-based Johnson Timber, sponsors of the legislation said.
Synthec Fuels is also considering other locations in Minnesota or Michigan, Felzkowski said.
She suggested that the proposed tax incentives could help seal the deal for Wisconsin.
“There’s three states vying for this” Felzkowski said. “The state that helps will be the first state there, and they will also have the headquarters.”
The newly announced legislation would set aside $60 million in tax credits from the Wisconsin Economic Development Corporation for the project. Wisconsin would also give out a $150 million grant to help create the plant. That grant would be backed by public borrowing through the Wisconsin Department of National Resources’ forestry account.
In exchange, the company creating the plant would agree to invest at least $1.5 billion into the project over the first five years. And at least 80 percent of the wood that would be processed at the plant would need to come from Wisconsin forests over that same five-year period.
The facility is expected to create 150 jobs, legislative sponsors said. Those roles would help revitalize a local economy that’s been hit hard by a declining market for paper producers, said Mike Markgren, the county administrator in Sawyer County.
Hayward, where the plant could be located, is the largest city in that county.
“Logging fell on hard times after the paper mills began to close,” Markgren said. “Demand decreased, prices flattened and we suffered.”
Markgren said Sawyer County’s economy has been increasingly centered on tourism.
“Those hospitality jobs pay on average $37,000 annually, and that is likely with no benefits, so that is not a sustainable wage,” Markgren said.
In contrast, he hopes a new wood pulp factory will bring more “well-paying jobs with full benefits,” to the region.
“Anything that can be done to strengthen the diversification of industry in Sawyer County is very welcome,” Markgren said.
The legislation began circulating for cosponsors Monday. State Rep. Chanz Green, R-Grand View, was listed as lead sponsor, along with more than half a dozen other Republicans.
The office of Democratic Gov. Tony Evers did not respond to WPR’s request for comment Monday, but Felzkowski described the governor as “very interested” in the proposal.
Earlier this year, a bipartisan group of Wisconsin lawmakers introduced separate bills that would create a $1.50 per gallon tax credit for Sustainable Aviation Fuel producers.
Wisconsin officials hope to lure plant that would turn wood pulp into aircraft fuel was originally published by Wisconsin Public Radio.
If you think stories like this are important, become a member of Urban Milwaukee and help support real, independent journalism. Plus you get some cool added benefits.
