Vermont Regulators Relaxed Rules for Wood-Burning Plants
Power plants can now accept specific pulpwood to support loggers following a major mill closure.
Updated on Sept. 23, 2026 in Utilities
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In September 2026, Vermont regulators waived habitat inspection requirements for the McNeil Generating Station and Ryegate Power Station to address a market surplus of unsold pulpwood. This rule change allows the plants to acquire wood previously destined for the Finch Paper Mill.
Why it matters
The closure of the Finch Paper Mill removed a critical market for Vermont loggers, creating a surplus that threatened the viability of local operations. Regulators implemented this waiver to stabilize the state's $2.3 billion wood products industry and mitigate further business closures.
The Vermont wood products industry is valued at $2.3 billion, and loggers have faced a 40% reduction in sales outlets over the last five years. The McNeil Generating Station and Ryegate Power Station collectively purchase 600,000 tons of wood chips annually.
The players
McNeil Generating Station
A Burlington-based power plant that produces electricity through wood chip combustion.
Ryegate Power Station
An energy facility located in the Northeast Kingdom that relies on wood biomass for power generation.
Finch Paper Mill
A major regional industrial buyer of wood products that ceased purchasing local wood scraps in July 2026.
The details
The waiver permits power plants to purchase wood scraps harvested before the end of July 2026 without undergoing mandatory habitat inspections. This bypasses typical environmental compliance steps for pulpwood that is currently stranded following the Finch Paper Mill's decision to stop buying local wood scraps. The measure aims to provide a temporary bridge for suppliers affected by the mill's departure from the regional market.
Timeline
July 2026: Finch Paper Mill announced it will stop purchasing wood.
September 2026: Vermont regulators announced the environmental rule change.
December 31, 2026: Environmental rule waivers expire.
Market Landscape
The state's decision follows a pattern of regulatory intervention used to manage supply chain shocks within the forestry sector. It serves as an update to the enforcement of Vermont's mandatory habitat inspection requirements.
Loggers and wood product suppliers should plan operations around the December 31, 2026, waiver expiration date. Businesses should monitor whether power plant demand remains sufficient to offset the loss of the paper mill market before the expiration.
The takeaway
The regulatory waiver provides a stopgap for loggers by repurposing pulpwood that lost its primary buyer. Operators should track the expiration date of December 31, 2026, to determine if additional structural shifts in the wood supply chain are required.
Further reading
For more on shifts in energy sector regulation, visit the Utilities section.
Source note: This article includes information reported by Vermont Public.
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