Members of the United Steelworkers Union (USW) will inform members of the Senate Finance Committee, House Ways and Means Committee and their congressional representatives and senators the next three weeks about the need to retain the alternative fuel mixture tax credit for the U.S. paper industry.
“We believe this is a long-overdue credit for an industry that is the leader in the use of renewable energy,” said USW International President Leo W. Gerard. “The paper sector has invested millions of dollars in recovery boilers and other technologies that use renewable fuels derived from biomass and even sells excess energy generated back to the power grid. This credit allows the industry to play a vital role in our country’s transformation to clean energy.”
The tax credit originated from a 2007 tax law change that expanded eligibility for a 50 cents-per-gallon alternative fuels mixture credit to liquid fuels derived from biomass, including the wood pulp “black liquor” by-product. Companies can obtain the credit by mixing alternative fuel with 0.1 percent of a fossil fuel like diesel. There is not a limit as to how much credit can be taken.
The U.S. paper industry produces almost 70 percent of its own power from the wood pulp black liquor byproduct. The industry’s contribution toward greenhouse gas from the burning of fossil fuels is lessened by its sustainable forestry practice of planting trees and its use of biomass.
“The timing of this credit is impeccable,” said USW International Vice President Jon Geenen, who heads the union’s paper sector. “The paper industry is cash starved right now and in need of capital investment to maintain black liquor recovery systems and develop other biomass conversion This credit maintains other critical infrastructure if there is to be a vibrant paper industry in the U.S.”
UBS Investment Research said that the paper industry represents about 5-6% of U.S. manufacturing gross domestic product and is a top 10 manufacturing industry in most states.
The paper industry has taken a beating in recent years because of declining demand for paper and wood products amid a poor economy. Some 250,000 jobs have been lost since the early part of this decade, and 25 mills were closed in the past two years alone. The tax credit is seen as a lifeline for an industry that has many of its mills in small towns that depend on the economic activity generated from these facilities.
“If this tax credit is removed, thousands of good-paying jobs could be lost,” said USW member Fred Bailey who works for AbitibiBowater in Coosa Pines, Ala. “Jobs like the one me and my coworkers have aren’t readily available in our area. If our mill shuts down, we would have a difficult time finding a job that paid the same amount. So in a way, this tax credit is helping to keep small-town America alive.”
“Many companies are depending on this tax credit to survive and keep the mills running and our members working,” Gerard said. “We have a chance to help the paper industry recover from this recession and sustain a number of high paying, family supporting manufacturing jobs. No one benefits if this sector is lost.”
The USW represents about 120,000 paper workers and is the largest industrial union in North America. Overall it represents 850,000 workers in the pulp and paper, steel, rubber, oil, chemical, nuclear, mining and service sectors.
Source Press Release.