Pulp- and Paperindustry

Boralex Power Income Fund is pleased that its Senneterre, Québec power station project will benefit from significant investments by the federal and provincial governments.

Paper and pulp manufacturer Sappi Forests said on Tuesday that it had extended its plantation holdings in South Africa with the purchase of the Sjonajona plantation in the Mpumalanga province from Mondi.

PaperMoney asked me to write a bimonthly column on the industry in “my” area, which is Canada. As the deadline rolls around I find myself in Uruguay, working on a permit application for a new 4000 tons/day mill, and realize that the situation here has much to do with North America.

Some of the current, and impending, closures of pulp mills in Canada and the United States are of course due to the expansion of low-cost, high quality pulp producers in South America.

HELSINKI, April 16 (Reuters) - Finnish forestry companies UPM-Kymmene and Stora Enso fear that the government's plan to subsidise use of wood as a source of renewable energy will increase its price and serve another blow to the struggling industry.

For the second time this year, Congress plans to “pay” for a new program partly by closing a non-existent loophole involving a pulp byproduct.

The House-passed version of the “Small Business and Infrastructure Jobs Tax Act of 2010” counts on nearly $1.9 billion in revenue from making crude tall oil ineligible for Cellulosic Biofuel Producer Credits (CBPC). As with the $23.6 billion Congress recently “saved” by closing the mythical Son of Black Liquor loophole, the crude tall oil savings are a mirage because the chemcial probably could not qualify for the credits anyway.

Crude tall oil starts as a substance skimmed off of black liquor at kraft pulp mills that use pine as their wood source. In theory, it can be burned as a fuel, but it is almost always refined into more valuable chemicals that are used in such products as soaps, inks, adhesives, lubricants, and rosin. (Yes, baseball and fiddle fans, that kind of rosin.)

The legislation, which has been referred to the Senate Finance Committee, states that “The term ‘cellulosic biofuel’ shall not include any processed fuel with an acid number greater than 25.” (Acid number, rather than pH, is the measure of acidity commonly used for oils.)

“The normal acid number for crude tall oil is between 100 and 175,” says an explanatory document from Congress’ Joint Committee on Taxation. “Since the acid number for crude tall oil exceeds 25, crude tall oil would no longer qualify for the credit under the provision.”