The chief executive of a German biofuel company told WisPolitics that Hayward will be the site of its first U.S. sustainable aviation fuel plant after a $120 million tax incentive package was signed into law.
The news comes as business and economic development officials have expressed hope the $1.5 billion project could boost the region’s economy.
Mattis Mueller, CEO of Synthec Fuels AG and its Wisconsin subsidiary, said in a phone interview the company plans multiple sustainable aviation fuel plants to meet the airline industry’s needs.
“It’s about supply security and being independent from geopolitically exposed regions of the world,” Mueller said Friday. “Energy independence is a very important topic these days and this is what we can provide.”
Gov. Tony Evers earlier this month signed the $120 million tax incentive package in a bid to land the Synthec Fuels plant in Hayward. The facility will convert low-grade timber into tens of millions of gallons of synthetic jet fuel.
Officials hope it will serve as a boon to the flagging timber industry, boost incomes and maybe even address larger issues like housing and daycare, though developers still need to complete a feasibility study and permitting before they can break ground.
Tax benefits will not flow to the facility until several requirements have been met, including significant capital investment.
“Bills like this we haven’t seen in northern Wisconsin,” said Adam Lamoreaux, the former executive director of the Sawyer County Economic Development Corporation. “We haven’t had something like this affect our economy, so it’s a pretty big deal for us to get this much money coming into this part of the state.”
Logging has long been an important part of Sawyer County’s economy: Hayward has hosted the Lumberjack World Championship annually since 1960.
But the industry has fallen into decline as the market for print media has shrunk and paper mills across northern Wisconsin have shuttered.
The last 10 to 15 years have been particularly rough, said Henry Schienebeck, executive director of the Great Lakes Timber Professionals Association, with three paper mills closing since 2020 and one shifting to using recycled pulp.
In 1995, some 2.42% of Sawyer County’s population worked in the logging industry; today, it’s only 0.4%.
Tourism makes up an increasing share of Sawyer County’s economy. Its two largest industries by employment are accommodation and food service and retail trade, followed by manufacturing, healthcare and social assistance, according to Department of Workforce Development economist Tom Michels.
“There’s lower wages when you’re talking about tourism-based employment. It’s not as steady,” Michels said.
Enter the biofuel plant. The planned facility, a partnership between the German Synthec Fuels and the local Johnson Timber, would convert some 900,000 green tons of woody biomass into 50 million gallons of jet fuel annually.
That fuel is largely expected to go to European markets, according to Johnson Timber President Bill Johnson, Jr., though he said the developers were also in conversation with “a few” domestic airlines.
United Kingdom and European Union regulations increasingly require airlines to use sustainable fuel.
The war in Iran has also made the synthetic fuel more attractive, Johnson says, as the price of petroleum continues to climb and airlines look to diversify their fuel sources.
Once fully operational, the plant is expected to employ 185 full-time workers, according to Johnson.
In addition, he’s anticipating additional jobs in administration, logging, forestry and construction connected to both the plant and the infrastructure upgrades needed to serve it.
“It’s going to have a large reach,” Johnson said. “We’re excited to get these things off the ground.”
The county alone is expecting around 400 new jobs in indirect industries, Sawyer County Administrator Mike Markgren wrote in an email.
Just the plant jobs coming to fruition would come out to a 25% increase in the county’s manufacturing workforce, said Michels, a “pretty big jump” for that sector.
“It’s not every day you’ve got a big development like this, especially in a small city like Hayward,” Michels said.
Sawyer County is expected to see a significant boost to its tax revenues. Markgren noted that the $1.5 billion facility would mark a significant increase to the county valuation, which currently totals around $6.6 billion.
State lawmakers have also said reviving the timber industry would contribute to more active forest management and help combat issues like pests, invasive species and climate change.
That’s because regular harvesting keeps trees from becoming overcrowded and short on water, which can make them vulnerable to disease, Schienebeck said.
“If you want to have a healthy forest, you have to have a healthy forest industry,” he said.
Demand from the biofuel plant is also expected to create the opportunity to grow higher-value timber, Schienebeck said.
Tree farmers cultivate higher-quality wood by growing dense plots and then thinning them out, with the longer-growing trees becoming 2x4s, telephone poles and, for the oldest and strongest timber, log cabins.
Right now, farmers aren’t incentivized to thin out plots, since that timber would have gone into pulp for paper mills.
“We just don’t have enough market for that lower-quality, lower-value pulp right now. And that’s where this mill is really going to shine,” Schienebeck said.
Former Sawyer County EDC director Lamoreaux and economist Michels also said the boost to local incomes provided by the plant could spur more housing development in the area.
The Hayward area has “plenty of large, expensive homes” for vacationers and retirees who’ve moved up to the Northwoods in recent years, Michels said. But it lacks affordable housing for workers and young families, which often has to be built at scale in order to generate a decent profit margin.
Lamoreaux said that leaves people treading water as they try to keep up with rising rent – “which is out of this world” – instead of saving up to buy a home.
A boost to incomes could make those kinds of affordable developments a more attractive prospect for housing developers.
“We’re just a little bit riskier because of that income level, and if we can bump it up with a project like this, my hope is we can lure someone here to start some developments,” Lamoreaux said.
Still, this is all years away. Johnson says the developers are working to finalize a feasibility study in the next couple weeks, and the permitting process will “hopefully” start in June or July. If they’re lucky, that will take less than a year.
Then, construction of the plant is expected to take between three-and-a-half to four years, which, with “any luck,” will be operational by 2030.
“You’re really starting from scratch a whole new industry,” he said.
