Black Liquor Tax Credit

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Definition: Black Liquor Tax Credit

This term is mainly associated with the forest-products industry. Black liquor is a by-product of creating wood pulp and is also used as a bio-fuel.

A federal tax credit came into role to promote the use of bio-fuel but then it had an opposite effect. It offered tax credit for companies to use an alternative energy source in place of carbon based fuels.

Because government was offering tax credit for companies that use this biofuel, few companies started mixing diesel with biofuel to avail the tax benefits. So the companies were abiding by the law but still doing not what the government intended to happen.


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