Canada Calls “Unfair” a U.S. Tax Break to Paper Makers

(Reuters – Roberta Rampton)

A U.S. tax break being used by paper manufacturers who use a “black liquor” byproduct to fuel their plants is unfair and should be stopped, Canadian Trade Minister Stockwell Day said Tuesday.

Paper makers have claimed $7 billion in tax credits by using a loophole in a U.S. law designed to boost biofuel use, Day said in an interview with Reuters financial television.

Paper manufacturers create a byproduct called black liquor when they process wood into pulp for making paper. They have long used the byproduct for fuel in their mills. By blending the byproduct with diesel, the companies have tapped into a tax credit which one lawmaker called a “lifeline” to mills hit hard by the recession. Read more here.