Two companies looking to pick up the pieces of Maine’s shattered paper industry and make use of the wood that once fueled it have been awarded grants totaling $1.5 million from Maine Technology Institute’s Emerging Technology Challenge for Maine’s Forest Resources.

GO Lab, Inc., a building products manufacturer in Belfast, will receive $750,000 for a new wood-fiber insulation production facility at the former UPM paper mill in Madison. The nontoxic, recyclable product will be aimed at the market for environmentally preferred building materials. The facility is expected to consume 180,000 tons of softwood chips annually, create 100 jobs and generate approximately $70 million in annual revenue, according to MTI.

Another $750,000 award will go to Biofine Developments Northeast to develop the first large-scale bio-refinery in Bucksport. The plant will convert woody biomass to a chemical intermediate, levulinic acid, to produce a completely renewable heating oil substitute. Biofine will work with consultants Treadwell Franklin-Sewall and the University of Maine at Orono for technical operations.

The goal of MTI’s Emerging Technology Challenge for Maine’s Forest Resources is to help diversify and build more resilience into Maine’s forest industry. Responders to the challenge were asked to make a strong case for their business, the merits of their technology, economic benefits to Maine, and geographic fit. Both GO Lab and Biofine must put up a one-to-one match to the challenge grant, consistent with all MTI awards.

MTI estimates that Maine’s forest industry contributes $8.5 billion annually to the state’s economy, with the potential to grow to $12 billion by 2025.