CleanTech and Carbon in the Pacific Northwest

Carbon credits - origination to commercialisation© 2006 EcoSecurities Group plc

CleanTech and Carbon in the Pacific Northwest

Seattle, WA

November 8, 2007


Presentation Preview

1) Environmental Markets Don’t Work without a Legal Framework

Oregon’s Bottle Bill in early 1970s

Portland vs. Vancouver, WA

Carbon Markets Today

US vs. Europe and Japan

2) Once the rules are set, there are many opportunities.

Will describe many concrete opportunities

Will describe how EcoSecurities partners with technology providers


Annex I

The Kyoto Protocol

Non-Annex I

Not ratified


Emissions Trading between Annex 1 Countries

> Based on historic emissions, each nation is granted a certain number of allowances through a National Allocation Plan.

> If Nation A emits less than its total number of allowances (EUAs), it can sell it’s extra credits to Nation B.

> This trading can happen between nations or between capped companies.


Emission cap

Actual emissions

Buyer

Carbon Credits (CERS)

Carbon value ($)

Annex I (e.g. England) Non – Annex I (e.g. Mexico)

Seller

A CDM project reduces the GHG emissions in the CDM country

Emissions Trading between Annex 1 and non-Annex 1 Countries

U.N. – approved emissions reductions from a Non–Annex I country can be sold – as CERs -- to an Annex I country


The EU ETS and European emissions

Others

Power

Other Industry

Household

Services &

Agriculture

Refineries

Other Energies

Iron & Steel

Cement

31

33

6318

24

15

6

Transportation

> The EU ETS sectors (turquoise) currently account for approximately 46% of the emissions of the EU, over 2 billion tonnes of CO2 emissions per year covering approximately 11,000 industrial installations


Annex I

The Kyoto Protocol

Non-Annex I

Not ratified


Origination Implementation Commercialisation

Consulting

Finance & Accounting / HR / Legal / IT / Marketing / CSR

Investment

Originating CDM Offsets:

Selling Non-Annex 1 Credits to Annex 1 Emitters


EcoMethane Partnership

Aguascalientes project, Mexico


N2O from nitric acid plants

EcoSecurities is the largest developer in the world (24 million tonnes from 27 projects)


Other Kinds of Emissions Reduction Projects

Biomass and waste mgt

Small scale hydropower

Pig waste biodigestors

Landfills

Industrial energy efficiency

Current projects use 18 technologies in 36 countries

Agricultural biodigestors


Future CleanTech Partnerships

1. Agricultural methane digesters for bovine and porcine power generation.

2. Small dimensional wood pelletization for biomass fuel switching.

3. High tech, GPS-guided precision agriculture.

4. Satellite-monitored avoided deforestation.

5. Programmatic energy efficiency.

6. Transportation.


EcoS

ecur

ities

gui

des

proj

ects

thro

ugh

this

pro

cess

Implementation Process

PIN=Project Idea Note, PDD=Project Design Document, PP=Project Participant, DNA=Designated National Authority, DOE=Designated Operational Entity

The project cycle is convoluted, time consuming, and demands specialized skills

EcoSecurities implementation team has 64 skilled professionals, working with sophisticated internal tools and systems

Experience leads to successful track record of implementation:

> 13 new methodologies approved

> Approximately 90 Projects Registered – and growing every week


CDM Risks and Rewards

CER price

Re

gistra

tion M

on

itorin

gHo

st cou

ntry a

pp

rova

l

Ve

rificatio

nVa

lida

tionP

rod

uctio

n C

ost

Issua

nc

e Imp

ort to

EU

E

TS

High Risk with binary outcome Even on issuance,

ongoing performance risk from project. Requires close relationship with project to maximise projected output

Supply considerations - I


Guaranteed Delivery Transaction> EcoSecurities delivers CERs from the portfolio, not specific projects

> Delivery risk removed from buyer (firm volume)

> EcoSecurities pays liquidated damages in case of non delivery

> Utilising portfolio approach and adding value to the transaction

> Projects kept in portfolio until final issuance

> Sales price dependent on EUA reference price

Project A

Project B

Project C

Project D

Project E

“ secondary” CERs

EcoSecuritiesNet-Portfolio

Buyer

Delivery Risk


Recap

1) Environmental Markets Don’t Work without a Legal Framework.

2) Once the rules are set, there are many opportunities. If your technology significantly reduces GHG emissions, contact us.


Thank you.

Steve GutmannSenior Commercialisation Manager

[email protected]

503-333-7564

Documents

CleanTech and Carbon in the Pacific Northwest