How significant were the benefits of the black liquor tax credit to the pulp and paper industry?
In the 3rd quarter of 2009, International Paper (IP) booked $525 million in credits in comparison to its $233 million in pre-tax earnings before special items, according to the company’s announcement in October 2009. The giant paper and packaging company announced on February 4, 2010 that it would receive $516 million in “alternative fuel mixture” credits for the 4th Quarter of 2009, and yet lost $101 million during the quarter. For the full year, IP secured $2.06 billion from the government for mixing a bit of diesel fuel into its black liquor, a pulp byproduct, and using the mixture to power its pulp mills. Without the credits, it would have had a net loss of $1.4 billion last year. At least 19 other publicly traded pulp and paper companies also took advantage of the black liquor tax credits in 2009. Public companies qualified for approximately $2.8 billion during the first half of 2009. Most have not reported fourth quarter numbers yet, but they are on pace to receive more than $6 b
