Registration Approval Qualifies KapStone as Cellulosic Biofuel Producer

KapStone Paper and Packaging Corporation (NYSE: KS) ("KapStone") announced that the Company was notified that its registration as a producer of cellulosic biofuel for the tax year 2009 has been approved.

With this registration, KapStone may apply for a nonrefundable income tax credit of $1.01 per gallon of qualified cellulosic biofuel for the black liquor burned in early 2009 when the Company did not claim the alternative fuel mixture tax credit. KapStone estimates that a net $22 million benefit related to cellulosic biofuel will be reflected in the Company's third quarter 2010 income tax provision.  There is no certainty the full benefit will be utilized to offset future taxes payable as it will be dependent on future taxable income.