Canada to Reward Pulp and Paper Mills for Efficiency Improvements
The $1 billion Pulp and Paper Green Transformation Program also attempts to level the playing field between Canada’s pulp and paper industry and its U.S. competitors. U.S. mills now enjoy a tax break critics say gives them an unfair advantage over their Canadian rivals.
The Canadian government will reward some pulp and paper producers for making their operations more environmentally friendly.
But the $1 billion Pulp and Paper Green Transformation Program also attempts to level the playing field between Canada’s pulp and paper industry and its U.S. competitors.
The Green Transformation Program will give producers $0.16 (US$0.14) per litre of a liquid by-product created during the chemical pulping process used by some mills. The by-product, called black liquor, is commonly used as a fuel to produce on-site heat and power.
U.S. mills began adding diesel to the black liquor they produced in order to become eligible for a biofuel tax credit, which critics call an unintended windfall tax break that gives U.S. mills an unfair advantage over Canadian rivals hard hit by the economic recession. The tax break is set to expire at the end of 2009.
Canada’s program will also expire in late 2009. It covers black liquor produced throughout 2009 but has a $1 billion cap. Mills receiving the funds must spend the money within a three-year window on projects that include: energy efficiency improvements for recovery boilers and pulp and paper machinery, cogeneration unit upgrades, and adding machinery that converts forest biomass to ethanol.
Image CC licensed by Flickr user Claire L. Evans.
But the $1 billion Pulp and Paper Green Transformation Program also attempts to level the playing field between Canada’s pulp and paper industry and its U.S. competitors.
The Green Transformation Program will give producers $0.16 (US$0.14) per litre of a liquid by-product created during the chemical pulping process used by some mills. The by-product, called black liquor, is commonly used as a fuel to produce on-site heat and power.
U.S. mills began adding diesel to the black liquor they produced in order to become eligible for a biofuel tax credit, which critics call an unintended windfall tax break that gives U.S. mills an unfair advantage over Canadian rivals hard hit by the economic recession. The tax break is set to expire at the end of 2009.
Canada’s program will also expire in late 2009. It covers black liquor produced throughout 2009 but has a $1 billion cap. Mills receiving the funds must spend the money within a three-year window on projects that include: energy efficiency improvements for recovery boilers and pulp and paper machinery, cogeneration unit upgrades, and adding machinery that converts forest biomass to ethanol.
Image CC licensed by Flickr user Claire L. Evans.
