Black Liquor

A byproduct of wood-pulping, used as a fuel.

In April 2008, The Times explained how U.S. paper-producers have benefited from a subsidy aimed at promoting the use of alternative fuels:

For decades, pulp companies have burned a wood byproduct calledblack liquor to fuel their plants. Four years ago, Congress passed a tax credit meant to encourage companies to blend some biofuels into fossil fuels like diesel. The paper companies realized they might be able to claim the tax credit by going the other way, blending a little diesel into their black liquor.

In a recent report for The Vancouver Sun, Gordon Hamilton wrote:

Canada has threatened trade action against the United States over a massive “black liquor” tax credit to its pulp and paper industry that has distorted global pulp markets.

Canada has joined the European Union, Brazil and Chile in demanding that the U.S. end the black liquor subsidies, which are worth up to $8 billion. In a joint letter to Congress the signatories argued:

From a legal perspective, it is clear that these credits amount to actionable subsidies and that any adverse effects caused by them could be subject to remedies in the WTO or through domestic countervailing duty investigations.

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