IRS OKs black liquor for $1.01 per gallon tax credit for 2009, with conditions, risks

In Washington, the Internal Revenue Service ruled that the pulpmaking byproduct, black liquor, is eligible for up to $10 billion in Cellulosic Biofuel Producer Credits (CBPC), or “Son of Black Liquor” credits. The production credits will be paid at the $1.01 per gallon rate originally designed to incentivize renewable fuels, double the old $0.50 per gallon rates available under the “alternative fuel mixture” credits. In order to receive the credits, pulp manufacturers may have to refund previously claimed credits, and then claim and secure the new, more lucrative cellulosic credits.

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