Cumberland Times-News

Editorials

March 1, 2014

Black liquor

Tax credit loss would work to mill’s disadvantage

It seems like every legislative session in Annapolis poses some economic threat to the Luke paper mill. This year is no exception.

Legislation to phase out Renewable Energy Credits along with their economic value — potentially as much as $5 million — is proposed in both houses of the legislature.

The bills would change a list of renewable energy sources and phase out the Luke mill’s eligibility for renewable energy credits. Such credits can be traded and sold, with the value fluctuating according to marketplace needs.

Right now, the Luke mill has two tiers of credits available. The ones of most importance would be phased out in 2018. Those credits are offered for what is called “black liquor,” a byproduct of the paper-making process that can be burned for energy.

Environmental groups say the credits shouldn’t be granted for the black liquor, which they say is hardly a clean energy source.

The Allegany County Chamber of Commerce is opposing the legislation, noting that even though the credits will continue until 2018, there will be a long-term negative impact on the mill. “The passage of this legislation would result in the loss of this important revenue stream for a facility which is vital to our region,” said a letter signed by Stuart Czapski, executive director of the chamber, and E. William DuVall II, the chairman of the chamber’s legislative committee.

The fine papers industry — which includes the Luke Mill and its company, NewPag — has faced increasingly stiff competition from foreign paper makers in recent years. Every economic edge is needed by the mill to be able to protect the 825 local jobs it provides.

Efforts to change the black liquor credits have failed in the past. Our hope is that local legislators will again prevail in keeping the tax credits available to the Luke mill for the long term.

 

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