In order to lower carbon emissions, the 2005 Transportation bill provides a $1 per gallon subsidy to companies that reduce their use of fossil fuels.  For example, mixing ethanol with gasoline reduces the amount of fossil fuels used, which in turn reduces carbon emissions.  

Paper companies, however, have found a loophole in the law that allows them to increase their fossil fuel use, increase their carbon emissions, and still get the $1 per gallon subsidy.

For more than 50 years, paper companies have been burning the organic and chemical byproduct of the pulping process, called “black liquor,” as fuel to power their mills. Since black liquor is not a fossil fuel, paper companies must add diesel fuel to the mixture in order to be eligible for the subsidy.  By doing so, the paper companies have INCREASED their carbon emissions and received billions in tax payer dollars for their polluting ways.

A paper industry insider who goes by the nom de guerre “D. Eadward Tree” and posts to the Dead Tree Edition blog, reports that more than $4.7 billion tax-payer dollars have been awarded to paper companies that have increased their greenhouse gas emissions through the first three quarters of this year. The total cost to tax-payers is on track to be between $6 billion and $8 billion before the end of the year, dramatically exceeding the $61 million estimate for the credit.

While the loophole is scheduled to close at the end of this year, U.S. Representative Steve Kagen has introduced H.R. 4066 that would continue the tax credits in perpetuity.

To recap: the federal government is financially rewarding paper companies with billions of tax dollars for a decades-old practice that hurts the economy and the climate.

You might wonder, “Is this subsidy for polluters hurting recycled paper manufacturers?” Or, “How can magazines and other paper purchasers prevent further corruption of the 2005 Transportation bill’s intent?”  

The easiest way that you can fight back against this perverse misuse of public funds is to ask your paper supplier if they support the black liquor tax loophole and encourage them oppose it. Get more answers in just a few short paragraphs at the Better Paper Web site.