Abitibi lands $33-million ‘black liquor’ credit

Duane Hicks

Under the federal government’s Pulp and Paper Green Transformation Program, AbitibiBowater has qualified for “black liquor” credits in the amount of $33,213,351 thanks to its mills in Fort Frances and Thunder Bay.
AbitibiBowater was among the 24 companies, representing 38 pulp and paper mills across Canada, that qualified for credits under the program, Natural Resources Canada announced this week.
Jean-Phillipe Côté, director of Public Affairs and Government Relations at AbitibiBowater, said yesterday the $33-million credit definitely was good news.
“We are grateful the federal government confirmed AbitibiBowater’s ‘black liquor’ credit through the Pulp and Paper Green Transformation Program,” he noted.
“It’s certainly a good example of federal support for our industry in the currently challenging times,” Côté added.
“We would like to thank Minister Lisa Raitt and Minister Stockwell Day for their support, and also for making sure that this program would not be considered in violation of the softwood lumber agreement,” he continued.
“It’s an important component for us, you can imagine.”
Côté said according to the recorded “black liquor” production from AbitibiBowater’s mills in Fort Frances and Thunder Bay, the company’s total assessed credits were valued at $33,213,351.
He clarified, however, that the credits “can be used for any environmentally-beneficial, energy-related project at any of our mills in Canada,” not just Fort Frances or Thunder Bay (the facilities that produced the black liquor).
“At this stage, it is too premature to speculate on what projects specifically we’ll work on, or where, or how,” Côté stressed. “We are considering various options, but for now, we are grateful that this is happening.
“It’s important support for the company and for the industry, and that’s where we are.”
“Black liquor” is a byproduct of the kraft process—one of the processes used by pulp mills during the production of paper pulp.
The 24 eligible companies now will have access to funding under the $1-billion program to invest in capital projects that improve their environmental performance.
These companies will receive funding for eligible capital projects based on an allocation of $0.16/litre of “black liquor” produced until the funding is fully allotted, Natural Resources Canada stated in a press release.
To determine their eligibility for the credits, companies were asked to register with the program and report on their “black liquor” production by Sept. 18.
At the close of this registration period, the government verified production reports prepared by the companies and calculated the amount of credits to be allocated to those eligible.
It is expected firms will begin to receive funding for projects in late 2009 or early 2010.
Eligible firms can invest their credits in any of their pulp and paper facilities across Canada, Natural Resources Canada noted.
Qualified companies now must submit project proposals for their facilities. Each project will be subject to a federal environmental assessment.
In addition, contribution agreements will be negotiated for projects under the program.
Firms then will have until March 31, 2012 to draw on this funding to finance approved capital projects that offer demonstrable environmental benefits, such as improvements to their energy-efficiency or their capacity to produce alternative energy.
The program is capped at $1 billion, and total payments to Canadian industry will not exceed this amount.