Two levels of government and Emera are investing $1.67-million in a type of business incubator for the forestry industry in Nova Scotia.

The forestry “innovation hub” will help startups make a business out of using wood byproducts in new ways, the provincial government says.

“Over the last number of years it’s become painfully apparent that we need to reinvent ourselves when it comes to forest utilization in Nova Scotia,” provincial Natural Resources Minister Lloyd Hines said.

Hines gave the example of the AV Nackawic Mill in New Brunswick, which produces a type of pulp that is used to make rayon.

“We need to start somewhere, and we’ve got to get very serious about how that works,” he said.

Public and private funding

A million dollars is coming from Emera, $350,000 from the province, $250,000 from the Atlantic Canada Opportunities Agency and $67,000 from Innovacorp, which fosters Nova Scotia startups.

The hub has been running since July 2015 as a partnership between a local firm called BioApplied and a forest products industry research group called FPInnovations. The province and Innovacorp provided some support in the form of office space and planning but this is the first major investment of money.

Bio-fuels from wood

Rod Badcock of BioApplied said one area of research for the hub is to learn more about the market for bio-fuels in marine diesel and heating oil.

He used the example of Brooklyn, N.S., company Cellufuel, which he said is on a “steady march” toward commercialization. The company turns lumber into renewable biofuel.

He suggested such companies will need information about the Nova Scotia market before getting big enough to export.

“Having a domestic market that we understand well, that these companies can tap into, while they’re establishing themselves — give them some early sales — it’s one of the keys to success for startup businesses,” he said.

“Which is why we’re interested in understanding what the domestic market is.”

The hub hopes to promote existing Nova Scotia forestry companies and to attract new ones from out of province.