Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from Gail Glazerman from UBS Financial.
Gail Glazerman - UBS
Dan, just digging into some of the government policy a little bit more, I guess there was some news out yesterday that the cap will be restricted to biomass and residuals. I'm just wondering is there any sort of quantification that you could give us in terms of how many tons of residuals you may have that you would be able to qualify as use of biomass increases?
Dan Fulton
I can't give you a number at this point. As you correctly point out, there is a lot of uncertainty surrounding this program. It's being administered by the USDA. There's questions around what would qualify. There's significant questions about whether it would be eligible if you were to transfer from, let's say, our own timberlands into one of our own facilities. At this point, I would rather not speculate. I can tell you that we are watching this very closely and are prepared to take advantage of it should the opportunity arise.
Gail Glazerman - UBS
I'm also just looking for a little bit more color on the pulp markets and perhaps the decision to expand and to converting in Europe. What type of demand conditions are you seeing and can you give any sense about the price increases you've announced, kind of what you think you have forming over the next few months to realize?
Tom Gideon
I think you mentioned Poland, what we'd like to say about that is that we view this as a very exciting opportunity to expand our long-term relationship with Procter & Gamble. We are building a converting facility in Poland that will apply proprietary technologies to the fiber that P&G will use in their hygiene products and it will allow us to convert closer to the end customer and participate in future international growth. So, that is a logical extension of our strategy to continue to grow with our long-term customers.
Gail Glazerman - UBS
Current demand both for fluff and what you are seeing for more commoditized pulp and in terms of fluff kind of where you stand in terms of price increases and realized pricing?
Tom Gideon
As you know, we've made some price announcements earlier this month regarding prices, both for paper grade as well as for fluff. As you know, we remain of the view that fluff market is very attractive for us going forward. It's a market that's growing at 4% a year, roughly 150,000 to 160,000 tons per year. We are well positioned to do well in that market with our mills in preferred locations in terms of wood baskets, as well as being able to supply both domestic as well as a wide array of international markets. They are highly competitive in both cost and efficiency.
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