Resource Recycling Magazine: Virgin paper goes back on tax welfare rolls

## Virgin paper goes back on tax welfare rolls

_By Editorial Staff, Resource Recycling_

The virgin paper industry will continue to receive billions of dollars in tax credits thanks to the recently-signed transportation bill.

In its initial form, the "Moving Ahead for Progress in the 21st Century Act" (also known as "MAP--21"), had language closing a tax loophole that has provided the virgin paper industry an estimated $3 billion tax credit, giving the industry an unfair advantage over producers of goods that include recycled fiber.

At issue is something called black liquor, a byproduct created in the processing of wood pulp to make paper. The stuff is a dark, molasses-like concoction of lignin residues, hemicelluloses and inorganic chemicals, and has a high-energy content and thus commonly used as an energy source in paper mills.

In 2009, the virgin fiber industry began labeling black liquor as an alternative fuel, which was being given a 50-cents-per-gallon tax credit intended to boost the production of new alternative fuels for vehicular use. Domestic virgin paper manufacturers were able to call black liquor an alternative fuel by simply mixing the sludge with at least 0.1-percent diesel fuel.

According to [a story in _The New York Times_][1], Sen. Mike Crapo (R -- Idaho), one of the so-called "[Gang of Six][2]" dedicated to coming up with a bipartisan plan to eliminate the deficit, removed the loophole-closing language from the transportation bill on behalf of Clearwater Paper, a Spokane, Washington-based paper producer that operates a mill in Idaho.

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[1]: http://www.nytimes.com/2012/07/21/us/politics/in-black-liquor-a-cautionary-tale-for-deficit-reduction.html?_r=1&pagewanted=all
[2]: http://en.wikipedia.org/wiki/Gang_of_Six
[3]: http://www.resource-recycling.com/images/e-newsletterimages/MRP-new-banner-070912.jpg (MRP Banner)
[4]: http://mrpcompany.com/
[5]: http://www.resource-recycling.com/images/e-newsletterimages/RRe-news080112.html

URL: http://resource-recycling.com/node/2975