Yes, it will kill plants, some seem to die even at quite low doses.Could Hydrogen Peroxide cause this whitening
Definitely sounds like you have a CO2 issue, pumping that much in for so little effect in the tank.
Try weighing your CO2 equipment before CO2 on after CO2 off to see how much you are using per day.
I have a set of these and despite stating max is 5Kg, will read my 5.380Kg of an FE with attached regulator.
http://www.argos.co.uk/static/Product/partNumber/8426473.htm#pdpFullProductInformation
I measure about 20gr per day in an 180l tank, with yellow drop checker and in line diffuser. You should therefore be 40/180 * 20 -> 4.5gr per day, so 2Kg FE lasting 2000/4 days -> 444 days.