Should Canada be worried about the new U.S. green energy subsidy?

There is significant concern that the newly proposed U.S. green energy subsidy could be used by American forest companies to give them a final and overwhelming advantage in the battle for continental supremacy.

The new American subsidy will see billions of dollars paid out to companies that are developing new green energy resources. The Internal Revenue Service (IRS) said last week that the new subsidy could apply to black liquor, a fuel produced as a byproduct of the pulping process.

The new subsidy rate is $1.01 a gallon, a rate that could add up to billions for U.S. mills over the next 3 years if they are allowed to cash in on the program.

If U.S. pulp and paper companies can use this new tax credit, it essentially means they wouldn't have to pay any income taxes, said Kevin Mason, an analyst at Equity Research Associates.

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Canadian forest sector fears massive U.S. green energy subsidy (Vancouver Sun)