By Lori Brown on Oct 29, 2009

CEO Calls Paper Industry's Use of Tax Credit 'Outrageous'


Tim Spring, CEO of Marcal Paper, LLC, a leading manufacturer of paper from 100 percent recycled paper, is calling a loophole in a 2005 highway bill “outrageous,” as billions of dollars set aside for alternative fuel tax credits have been provided to paper companies for a standard industry practice.

The argument centers around the use of “black liquor,” a byproduct of the wood pulping process which is often used in combination with traditional fuel sources to power paper mills. According to Marcal, paper companies have been using “black liquor” as fuel to run their mills since the 1930s. Since the 2005 bill, paper companies have tapped into $6.6 billion of tax credits available from the Alternative Fuels Provision for their use of this byproduct.

Photo: Flickr/Greg Hickman

The paper industry is concerned about the implications of removing the tax credit, which currently provides billions in credits. Photo: Flickr/Greg Hickman

“There is no greater hypocrisy than to have the paper industry, widely regarded as being culpable for an element of global warming through commercial deforestation, putting its hand out for billions of taxpayer dollars from the remnants of dead forests, under the guise of alternative fuel production,” said Spring.

In June, an amendment to H.R. 2967, which provides the alternative fuel and alternative fuel mixture credits for “black liquor,” was introduced in Congress after President Obama’s budget plan called for a reduction in the tax credit funding.The amendment would deny the alternative fuels excise tax credit for fuels derived from the production of paper or pulp, such as lignin, wood residues or spent pulping liquors.

Last week, Marcal, along with a coalition of 26 environmental groups, expressed its support for the amendment.

The coalition, which includes groups including Greenpeace and the Environmental Defense Fund, sees the tax as an added incentive to an industry manufacturing paper products directly from the nation’s forests rather than available recyclable sources.

“The massive payment adversely biases the free market in an ecologically harmful way,” the coalition stated in an appeal letter to Congress. “The losers include more environmentally responsible producers using recycled paper content. Such mills, which are critical to developing a green jobs economy, are being put at severe disadvantage.”

H.R. 2967 is currently under consideration by the House Ways and Means Committee.


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      • Nick

        There is no greater hypocrisy than Marcal posturing itself as an eco-friendly company. They are the biggest air and water polluter in NJ. No small feat. The EPA has fined them BILLIONS. If you are such a believer, take a dip in the river next to their plant in Elmwood Park. After you do that, I will respect what you say. Until you do, please don’t promote these folks as caring AT ALL about the environment.

      • Henry

        Marcal is the biggest air and water polluter in the state of New Jersey. They have been fined almost a billion dollars by the EPA, and do much more harm than good. They filed Chapter 11 to avoid paying for the clean up, and also used it as an opportunity to break their union contract. Nice guys, huh? Then when they emerged from bankruptcy, they painted themselves green. For them to claim to be a green, eco-friendly company is a joke, as well as a lie.

      • Ecofacts

        All of us at Marcal welcome valid criticism and open discussion on blogs (and everywhere), but we want you to know that “Nick & Henry” leave comments like the one here anytime he or she sees something written about us…and leaves them anonymously, so there is no way we can get in touch and set the facts straight. The phrases used are always very similar, the kind of pattern that almost shouts, ”spam campaign.” This kind of nameless attack isn’t in the open spirit of blogs, and we think it’s a disservice to readers and to our hard-earned reputation. The simple fact is that we make our products in a manufacturing system designed to minimize our environmental impact.
        We invite the person making these attacks to come pay us a visit; we have nothing to hide! We think our actions speak for themselves; otherwise, why would a group like the NRDC cite our factory in a discussion of companies leading the way environmentally in the New York metro area? (http://switchboard.nrdc.org/blogs/egoldstein/green_apples_and_bad_apples_nr.html).
        Marcal didn’t recently “paint itself green.” We’ve been using recycled paper since 1950, long before green was in. As for the lawsuit, it was settled with no admission of wrong doing, enabling the company to emerge from bankruptcy to protect and grow jobs under a new owner and management team that understands that, if you are going to market yourself as green, you better do things right.
        Are we perfect? Of course not, but we are always striving to be better. We invite anyone with questions about our practices to contact us at ecofacts@marcalpaper.com

      • Jenna

        For Tim Spring to cal Marcal an “earth friendly” company is outrageous. He is trying to be a slick marketer, nothing more. He cares nothing about the green movement, only profits. At any cost. Marcal is not an “earth frendly” company. Far from it.
        Using less paper is the only answer. Marcal pollutes the air and water. Yes, it uses recycled paper, but the cost to manufacture it far outweighes all the benefits it may generate. I have a problem with companys pretending to be “green” when they destroy the environment every day. Don’t buy paper. It is that simple, and you can do it. Their hypocritical marketing message, selling under a green banner, should offend all who care about the environment. If you doubt that, go see their plant, and the dead river next to it. Then tell me they are green. Their posturing is offensive, and a lie.