That State Grant for Turning Dead Trees into Energy? It's Getting the Axe.

What This Bill Actually Does

To understand what this bill destroys, you have to understand why it was built in the first place. Back in 2020, Colorado experienced the three largest wildfires in state history, burning over 625,000 acres and costing taxpayers an estimated $214 million just to fight them. With nearly three million Coloradans living in the Wildland-Urban Interface (WUI)—the exact areas where human development meets high-risk forests—the state needed creative ways to get dead trees and underbrush out of the woods before they could ignite.

Enter the Biomass Utilization Grant Program. The legislature gave the Colorado State Forest Service the green light to award up to $2,500,000 in grants to businesses and local governments that could figure out how to take that dangerous forest fuel and turn it into something useful. Specifically, they wanted demonstration projects that converted dead timber into electricity, heat, or biochar—a specialized charcoal produced through a high-heat, oxygen-free process called pyrolysis that actually improves soil health and traps carbon. It was a classic 'two birds, one stone' policy: reduce wildfire risk while boosting renewable energy and agriculture.

But Colorado law has a built-in self-cleaning mechanism called the Sunset Process. Whenever the state creates a new regulatory program or grant, it slaps an expiration date on it. Before that date hits, the Department of Regulatory Agencies (DORA) conducts an exhaustive audit to see if the program is actually working, wasting money, or just obsolete. DORA released its 2025 sunset report on this program and their recommendation was blunt: kill it. HB26-1213 is simply the legislative vehicle doing exactly that. It completely strikes Section 23-31-317 from the Colorado Revised Statutes, ending the grant program forever.

What It Means for You

If you are one of the three million Coloradans living in the foothills, the mountains, or anywhere near the Wildland-Urban Interface, you already know that wildfire mitigation is a massive, expensive headache. Clearing defensible space around your home is non-negotiable—especially if you want to keep your homeowners insurance—but getting rid of all those slashed branches and dead trees is incredibly difficult. This grant program was supposed to help create local markets for that wood so it didn't just sit in slash piles waiting for a spark. With the state pulling the plug on this $2.5 million incentive, you might see fewer local options or slightly higher costs for disposing of your property's timber.

For the gardeners, farmers, and climate-conscious folks, this also signals a pullback on state-level momentum for biochar. Biochar has been heavily touted as a miracle soil amendment that holds water (crucial in our drought-prone state) and traps carbon in the ground rather than releasing it into the atmosphere as smoke. By repealing this program, the state is essentially saying that they are no longer going to use this specific pot of taxpayer money to subsidize local biochar pilot projects. The market will have to figure out how to make it profitable on its own.

Here is what you should do right now if this impacts your community:

• Read the DORA Report: Look up the 2025 Department of Regulatory Agencies Sunset Report on the Biomass Utilization Grant Program. Understanding why they recommended repeal (e.g., lack of applications, high overhead, or poor results) will tell you a lot about the reality of biomass in Colorado.
• Contact Your Rep: If your local fire protection district was banking on this money to buy a biomass incinerator or biochar kiln, contact your state representative immediately. Sunset bills can be amended or killed if there is enough local outcry showing the program is actually vital.

What It Means for Your Business

If you operate a forestry, timber hauling, landscaping, or green energy startup in Colorado, pay close attention. The state is permanently closing off a $2.5 million funding avenue. The economics of biomass have always been brutally tough. Hauling low-value dead trees out of steep, remote mountain terrain usually costs more than the wood is worth. This grant program was designed to bridge that exact financial gap, allowing businesses to test out innovative pyrolysis setups or biomass energy generators without taking on 100% of the financial risk. By repealing the program, Colorado is signaling that the 'demonstration' phase of biomass utilization is over—at least on the state's dime.

The repeal officially hits on September 1, 2026. If you currently have an active grant with the Colorado State Forest Service, or if you were in the middle of drafting a proposal for the next funding cycle, your runway just got incredibly short. The state forester will no longer have the statutory authority to pull money from the healthy forests fund for these specific biomass demonstrations after this bill takes effect. You need to adjust your business plan to account for a purely free-market approach to biomass, or pivot toward federal dollars instead.

Here are the action items your business needs to take THIS WEEK:

• Audit Your Grant Timelines: If you are currently receiving biomass grant money from the state, contact your grant administrator at the Colorado State Forest Service immediately. Confirm in writing how the August/September 2026 repeal date impacts your final payouts and reporting requirements.
• Pivot to Federal Money: Don't wait for this state well to run dry. Start looking into the USDA Forest Service's Wood Innovations Grant program or federal infrastructure dollars earmarked for wildfire mitigation and rural energy.
• Assess Your Supply Chain: If you buy biochar from a local producer who relied on this grant to keep their prices low, prepare for those material costs to increase next year.

Follow the Money

While the official fiscal note hasn't been published yet, the financial mechanics of this bill are straightforward. The state forester previously had the discretion to use up to $2,500,000 for these grants, pulling from the Healthy Forests and Vibrant Communities Fund (and any outside gifts, grants, or donations).

By repealing the program, the state isn't necessarily cutting $2.5 million from the budget overall; rather, that money will no longer be fenced off specifically for biomass demonstration grants. Instead, those funds will likely remain in the broader Healthy Forests and Vibrant Communities Fund to be deployed for more direct, traditional wildfire mitigation efforts—like funding local fire crews or community wildfire protection plans. For local governments that were hoping to use this grant to offset the massive costs of clearing municipal land, they will now have to compete for general mitigation funds without the specific 'biomass' carve-out.

Where This Bill Stands

HB26-1213 was introduced in the House on February 17, 2026, and immediately assigned to the House Agriculture, Water & Natural Resources Committee. It is being sponsored by Representatives Lesley Smith and Karen McCormick, along with Senator Katie Wallace.

Here is the honest trajectory: because this bill is implementing a direct recommendation from a nonpartisan DORA sunset review, it is highly likely to pass with minimal friction. Sunset repeals are essentially routine bureaucratic housekeeping. Unless a highly organized coalition of forestry businesses, biochar advocates, or mountain town mayors steps up to testify that this program is indispensable, the legislature will quietly pass it. If passed, the repeal goes into effect shortly after the session ends—specifically, at 12:01 a.m. on August 12, 2026, wiping the program off the books for good.