Marcal Paper CEO Says Black Liquor Tax Credit Must Go

Oct. 23, 2009 - Marcal Paper said that it is pressing Congress to eliminate the Alternative Fuel Provision tax credit which US kraft pulp mills have been taking advantage of by mixing black liquor with other fuel sources to create an "alternative" energy product.

According to Marcal, the heart of the issue is whether a byproduct of the pulping process known as black liquor ought to qualify paper manufacturers for an alternative energy tax credit. Marcal's CEO, Tim Spring, charges that paper companies have been using black liquor as fuel to run their mills since the 1930s and that the $6.6 billion of tax credits available from the Alternative Fuels Provision was intended to support the use of alternative fuels for transportation.

"That legislation was meant to support more green fuel use, not give billions of dollars for an industry practice that has been around for almost one hundred years," Springs said.

As such, Marcal supports the passage of HR 2967, to amend the Internal Revenue Code of 1986 denying the alternative fuel and alternative fuel mixture credits for black liquor, and sponsored by Democratic U.S. Representative Ann Kirkpatrick of Arizona's 1st District.

"Not only is our environment in turmoil, but our national debt is an increasing problem. This payout is deplorable, given our nation's current economic circumstances," said Mr. Spring. "Organizations across industries are scrambling for bailouts for survival, yet many paper manufacturers are taking advantage of taxpayers' dollars and are being rewarded with a bonus for pillaging our forests."

Marcal noted that HR 2967 is currently under consideration by the House Ways and Means Committee. Also, Senate Finance Committee Chairman Max Baucus has stated that committee is drafting a proposal to close the loophole by clarifying which fuels qualify for the alternative fuels tax credit and eliminate fuel derived from paper and pulp.

Marcal uses recycled paper to produce paper towels, bath tissue, facial tissue and napkins for the At-Home market, along with tissue products for distributors to the Away-From-Home market.

SOURCE: Marcal Paper LLC

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