On the Call: International Paper CEO John Faraci

International Paper CEO John Faraci discusses government aid to pulp and paper producers

• By The Associated Press
• On 3:57 pm EDT, Wednesday October 28, 2009

International Paper Co., the world's largest provider of wood products, reported third-quarter earnings Tuesday. Results beat analyst estimates thanks to a half-billion alternative fuel tax credit set to expire at the end of the year. As the expiration date of that credit approaches, discussion has centered on other types of federal assistance to the industry, including a biomass crop assistance program and cellulosic ethanol tax credits.

During the company's third-quarter conference call, CEO John Faraci reviewed those two options.

"On the biomass crop assistance program, like many others, we're trying to understand what that program is all about," he said. "What we really need are written regulations from the authors of that program to understand what it's about more clearly. These regulations are expected to be issued in the near future. So at this point, it's wait and see. We believe these regulations should provide a narrow definition of biomass so they do not distort the market. We have not lobbied for the program but we feel it is important that any legislation or subsidies ensures a level playing field for the pulp and paper industry."

As for the cellulosic ethanol tax credits, Faraci rejected his industry's participation.

"We do not believe the pulp and paper producers qualify for these tax credits," he said, adding that International Paper will not seek such credits.