Today in Biofuels Opinion: “What’s being called Son of Black Liquor dwarfs the original black-liquor loophole.”

From Dead Tree Edition: “For the second time in a year, the U.S. pulp and paper industry has hijacked a multi-billion dollar federal program that was supposed to promote new biofuels. What’s being called Son of Black Liquor dwarfs the original black-liquor loophole that created such a stir in Congress and among Canadian officials earlier this year. Son of Black Liquor, officially known as cellulosic biofuel producer credits, could generate $50 billion in tax credits for U.S. kraft pulp mills before it expires at the end of 2012, Dead Tree Edition estimates. Tax expert Martin A. Sullivan, writing at Tax.com, more conservatively forecasts that “this credit will provide the paper industry with $25 billion of additional tax benefits that Congress never intended.”…he Internal Revenue Service released a memorandum in the past few days ruling that black liquor qualifies for cellulosic biofuel producer credits because the fuel is produced and used in the U.S. and is “derived from lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis.”

From Novozymes: “The Science article was co-authored by Tim Searchinger, a lawyer who introduced the theory of indirect land use change (ILUC) in another article in 2008. His theory relies on a worst-case scenario under which all electricity and fuel in Europe and the U.S. depends on clearing forests in the developing world for biomass production.  Such a methodology ignores technological advances and national land management practices and policies, according to experts at Novozymes, and it does not take into account soil types, fertilizer practices, tillage, the value of feed products and advancements in increasing crop yields that can further reduce the need for new cropland…Adding to the debate about the effects of increased use of biomass is the lack of current regulation, or evaluation of carbon emissions, for biomass when it is used to produce electricity.

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