Eco (atlantic) Regulatory News (ECO)

25 May 2007 07:05

EcoSecurities Group plc ("EcoSecurities", or the "Group"), one ofthe world's leading companies in the business of originating,implementing and commercialising carbon credits from greenhouse gasemission reduction projects, will hold its Annual General Meeting inDublin, Ireland today at 2 pm. At the meeting Mark Nicholls, Chairman,will make the following statement: £ "EcoSecurities' first full year of trading in 2006 as a publiccompany proved successful. The Group achieved many significantmilestones with regard to the origination, implementation andcommercialisation of Certified Emission Reductions ("CERs"). Progresshas been maintained in 2007. The Group continues to execute its CDMstrategy, as well as capture new carbon market opportunities closelyaligned with the core business. £ A number of milestones have been achieved to date in 2007 whichinclude: £ -- CDM project origination has progressed steadily with the gross contract volume of the Group's projects increasing to 178 million CERs at present - an increase of 14% since year end 2006. In line with the Group's policy of continually assessing the projects within the portfolio for expected CER generation, this total takes into account volume adjustments. As projects progress through the CDM implementation cycle and become operational, EcoSecurities' confidence in project volumes and individual project performance becomes more certain. £ -- On a net entitlement basis the CER portfolio has grown by 23% to 156 million tonnes since year end, reflecting the Group's focus on principal projects and the purchase of CERs from projects where the Group previously had a shared interest. £ -- With many governments indicating their long term commitment to emission reduction schemes, e.g. the EU's commitment to the ETS post-2012, Canada's recent commitment to emissions reductions by 2020, California's post-2012 legislation and current global debate surrounding Kyoto's second commitment period; the Group is confident that a market regime for post-2012 carbon credits will evolve and that it is well placed to benefit. £ -- As the potential market for carbon credits post-2012 develops, the Group has continued to expand its portfolio of carbon credits for delivery after the initial Kyoto commitment period. Out of its existing portfolio of projects the Group has already secured the rights to 86 million tonnes of carbon credits for the period from 2013 to 2028. Furthermore, project opportunities that extend beyond 2012 are now being pursued more aggressively. £ -- In order to continue expansion of the Company's origination, implementation, commercialisation and consulting efforts, the Group has established 4 new offices in Dubai, Kiev, Rome and Tokyo this year. £ -- The CDM project portfolio remains highly diversified by geography, technology and CDM methodology, with a total of 426 projects, up from 353 at year end. The projects are located in 36 countries and encompass 18 different technologies. Project diversification, as well as our track record in project implementation, significantly enhances our ability to generate consistent production of CERs from our growing project portfolio. £ -- CDM project implementation continues to progress. Of the 426 projects in the portfolio, 336 are now financed, 104 are under construction and 146 are operational. At present, 66 projects have been registered with the CDM Executive Board, up from 53 at year end. These results were achieved in spite of the fact that the external process of CDM project validation, host country approval and CDM EB registration has been difficult over the past year and continues to be challenging. £ -- Demand for CERs from corporate and government buyers with 2008-2012 Kyoto compliance obligations continues to grow. To date the Group has pre-sold EUR 400 million of CERs to predominantly large corporate and government buyers which represents a steady stream of revenues for the Group from 2008 through to 2012. The expected Net Trading Margin on current forward CER sales of 33 million tonnes now totals EUR 177 million. £ -- Recently, CER prices have been increasing in line with demand in Japan and the EU. Substantially tighter National Allocation Plans proposed for Phase II of the EU ETS have contributed to this positive trend. £ -- Due to the increasing issuance of CERs from projects around the world, EcoSecurities is well positioned to participate as a principal in the secondary trading of CERs from project developers. This year the Group has already acquired 1 million CERs in this manner. £ -- With increasing corporate and individual awareness regarding climate change, the emergence of voluntary carbon markets in the US and internationally is a major development. The Group has begun to expand into these markets as a supplier of high-quality Voluntary Emissions Reductions ("VERs") and has completed its first sales. The Group has a growing portfolio of VERs, and will continue to build upon its strategy to be a wholesale supplier of the highest standard VERs in this market. EcoSecurities is working within the initiative of the International Emissions Trading Association, the World Economic Forum and the Climate Group to develop a Voluntary Carbon Standard for VER projects, which will allow for greater standardization in this market segment. In the US particularly, the Group has experienced a rapid increase in demand for VERs to meet both voluntary and pre-compliance needs (the latter based on the assumption that US climate change legislation will be enacted in the foreseeable future). £ EcoSecurities' target for the rest of the year is to maintain itscore focus on originating, implementing and commercialising its highlydiversified portfolio of emissions reductions projects. Furthermore,the Group sees a number of opportunities in closely aligned marketsfor VERs, issued CERs and CDM project investments as well as buildingits project portfolio beyond 2012." £ + Note: Gross and net contract volume measure expected CERproduction, as at 24 May 2007, from projects through to the end of2012 and do not adjust for operating or regulatory risk. Gross and netcontract volume exclude projects where the probability of either thedevelopment of a relevant methodology or the underlying development ofthe project is still highly uncertain. £ CDM = Clean Development Mechanism, the provision of the KyotoProtocol that governs project level carbon credit transactions betweendeveloped and developing countries. £ CER = Certified Emission Reduction, carbon credits created byClean Development Mechanism projects. One CER corresponds to 1 tonneof CO2e emission reductions. £ EU ETS = European Union Emissions Trading Scheme, a market based"cap and trade" system for green house gases adopted by the EuropeanUnion member states. £ Net Trading Margin = The resulting gross profit on the sale ofCERs less the direct purchase cost. £ VER = Voluntary or Verified Emission Reduction, carbon creditscreated by emission reduction projects. One VER corresponds to 1 tonneof CO2e emission reductions. £ About EcoSecurities: £ EcoSecurities is one of the world's leading companies in thebusiness of originating, developing and trading carbon credits.EcoSecurities structures and guides greenhouse gas emission reductionprojects through the Kyoto Protocol, acting as principal intermediarybetween the projects and the buyers of carbon credits. £ EcoSecurities works with companies in developing andindustrialising countries to create carbon credits from projects thatreduce emissions of greenhouse gases. EcoSecurities has experiencewith projects in the areas of renewable energy, agriculture and urbanwaste management, industrial efficiency, and forestry. With a networkof offices and representatives in 25 countries on five continents,EcoSecurities has amassed one of the industry's largest and mostdiversified portfolios of carbon projects. Today, the Group is workingon 426 projects in 36 countries using 18 different technologies(encompassing 29 approved CDM methodologies), with the potential togenerate more than 178 million carbon credits. £ EcoSecurities also works with companies in the developed world toassist them in meeting their greenhouse gas emission compliancetargets. Utilising its highly diversified carbon credit portfolio,EcoSecurities is able to structure carbon credit transactions to fitcompliance buyer's needs, and has executed transactions with bothprivate and public sector buyers in Europe, North America and Japan. £ Working at the forefront of carbon market development,EcoSecurities has been involved in the development of many of theglobal carbon market's most important milestones, including developingthe world's first CDM project to be registered under the KyotoProtocol. EcoSecurities' consultancy division has been at theforefront of significant policy and scientific developments in thisfield. EcoSecurities Consult has been recognised as the world'sleading greenhouse gas advisory firm over the last five years byreader surveys conducted by Environmental Finance Magazine. £ EcoSecurities Group plc is listed on the London Stock Exchange AIM(ticker ECO). Additional information is available atwww.ecosecurities.com. Copyright Business Wire 2007