The paper industry uses one of its own by-products, a lignin rich sludge called "black liquor" as a fuel for heating the wood chips and separating the fibers. The industry, until recently, only used the black liquor but when someone realized they could get the tax credit, International Paper and other companies started blending in diesel. The diesel isn't needed, it's only there to get the government money. The tax credit could earn the paper industry $8 billion this year, turning it from loss to profit if something is not done to eliminate it. Thanks to Bill for the tip!
[Source: The Nation]