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Packaging Corporation of America Starts Biogas Refinery
Lake Forest, Illinois, USA, 21 July 2008 ---(BUSINESS WIRE)--- Packaging Corporation of America (NYSE: PKG) announced today the successful start-up of a biogas refinery to produce methane gas from wood fiber at its Filer City semichemical medium mill. The biorefinery takes the by-product liquor of the pulp cooking process and uses bacteria as a vehicle to convert the liquor directly to methane gas. The methane is then burned as fuel in an existing power boiler, replacing natural gas and coal. The process employs and is dependent upon proprietary pulping and papermaking technology developed internally by PCA.

Since the pulping liquor is converted directly to methane gas, the process does not require recovery boilers or high energy consuming evaporators, which remove water from the liquor so that it can be burned. The evaporators and the chemical recovery unit at Filer City, which is a fluidized bed version of a recovery boiler, have been shut down.

The biorefinery is currently operating at about 75% of capacity and is expected to achieve full capacity and efficiency within a few months. The investment in this project was approximately USD 20 million and annual savings of about USD 10 million are anticipated. These savings equate to about a USD 25 per ton reduction in cost to produce semichemical medium at Filer City.

Paul T. Stecko, chairman and CEO of PCA, said, "The start-up of the biorefinery at Filer City represents not only a significant milestone for PCA, but also for the development and use of low cost, green energy. The economics on the project are particularly good considering that the returns are based, in part, on replacing primarily coal, a relatively low cost fuel, with methane in our boilers."

PCA is the sixth largest producer of containerboard and corrugated packaging products in the United States, with sales of USD 2.3 billion in 2007. PCA operates four paper mills and 67 corrugated product plants in 26 states across the country.


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