Approved as Cellulosic Biofuel Producer, Kapstone to Apply for Income Tax Credit

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KapStone Paper and Packaging Corp., Northbrook, Ill., USA, reported this week that its registration as a producer of cellulosic biofuel for the tax year 2009 has been approved. With this registration, KapStone may apply for a nonrefundable income tax credit of $1.01 per gal of qualified cellulosic biofuel for the black liquor burned in early 2009 when the company did not claim the alternative fuel mixture tax credit. KapStone estimates that a net $22 million benefit related to cellulosic biofuel will be reflected in the company's third quarter 2010 income tax provision.

KapStone operates paper mills in Roanoke Rapids, N.C. and North Charleston, S.C., a lumber mill in Summerville, S.C., and five chipping mills in South Carolina. The business employs approximately 1,600 people.