$40 million funding for Celgar biomass energy

Feb. 26, 2010, Castlegar, BC – A $40-million investment by the Government of Canada
will enable one of Canada's largest and most modern kraft pulp mills to
generate renewable energy from forest biomass. The Zellstoff Celgar Pulp Mill
in Castlegar, British Columbia, is the first mill to receive funding under the
Pulp and Paper Green Transformation Program (PPGTP) for renewable energy
project.

Thirty-eight
pulp and paper mills across Canada, from 24 companies, have generated credits
under the $1-billion program based on their 2009 production levels of black
liquor, a liquid byproduct of the pulping process used to generate heat and
power. Qualified companies are required to submit specific project proposals
for their facilities and have until 2012 to apply the credits to environmental
improvement projects.

The
Celgar renewable energy project has three components designed to improve the
environmental performance of Celgar Pulp Mill's existing infrastructure. This
investment will allow the mill to take advantage of waste heat, increase the
production of steam from wood waste, and increase the capacity to generate
bioenergy. Significant environmental benefits are expected to result from the
project, including a reduction in greenhouse gas emissions, increased energy
efficiency, and reduced community odour and noise.

The
Celgar project will allow the mill to generate enough renewable electricity to
meet its own needs and supply some energy to the British Columbia grid by late
2010. The PPGTP investment will enable the mill to complete this project and
take advantage of future market opportunities.

This
investment complements initiatives that are being delivered under Canada's
Economic Action Plan to sustain and improve the forest industry in Canada. The
Government of Canada has committed $170 million to assist the forest industry
in developing innovative wood products and expand global markets for Canada’s
wood products. Under the Transformative Technologies Program, $40 million has
been invested to develop pilot-scale demonstrations. Further, the $1-billion
Community Adjustment Fund is supporting employment in communities affected by
the global economic downturn, specifically forest-dependent communities.