INTEGRATED CARBON

DEVELOPMENT

AN INNOVATIVE AN INNOVATIVE

BUSINESS MODEL

AMERICANA Conference

Montreal, March 23, 2011

Outline

1. Biothermica:

History & Carbon activity

2. Business model:

Integrated carbon development

3. Carbon projects:

� El Salvador landfill gas carbon project

� Alabama coal mine methane carbon project

1. BIOTHERMICA1. BIOTHERMICA

Since 1987: We develop patented air

pollution control and greenhouse gas

reduction technologies

Since 1995: We develop, finance,

Biothermica

Brief history

Since 1995: We develop, finance,

build and operate landfill methane

destruction and energy projects

Since 2005: We monetize the carbon

credits generated by our landfill gas

and coal mine methane installations

VAMOX® system

Alabama, USA

(Coal mine methane)

Gazmont landfill gas power plant (25 MW)

Montreal, Canada

Biothermica

Carbon opportunity

� Emergence of carbon frameworks since 2005

Ex: Kyoto Protocol (regulatory, international)

Climate Action Reserve (voluntary, USA)

� Monetary value for the reduction of greenhouse

gas emissions: Price on carbon ($/tCO2e)

� Opportunity for developers of various greenhouse

gas reduction project types

Biothermica

Carbon activity statement

� Developer and investor in carbon projects

� Technologies: Proprietary to Biothermica

� Revenues: recurring sale of carbon credits (not equip.)� Revenues: recurring sale of carbon credits (not equip.)

� Project types:

� Landfill methane and coal mine methane

Destruction and/or energy generation

� Carbon standards: Regulatory and voluntary

� Scope: North America and international

VAMOX® system $US 3-6/tCO2e1

Solar & Wind $US 20-35/tCO2e2

Why methane destruction?

Low production cost

Landfill gas destruction $US 5-10/tCO2e

Carbon capture & storage $US 60-80/tCO2e2

1 High VAM concentrations 2 McKenzie, 2009

2. BUSINESS MODEL:

INTEGRATED CARBON INTEGRATED CARBON

DEVELOPMENT

Biothermica manages

all project components

� Project development:

Securing methane rights

� Project financing and structuring

� Methane destruction technology

� Project construction and operation

� Carbon monitoring, verification & registration

� Monetization of registered carbon credits

Advantages of being

integrated

� Ability to optimize all project components to

maximize carbon credit production and revenues

� Control over technology, operations

& monitoring (monitoring expertise)

� Control over corporate and financial structure

Project development:

securing methane rights

� Coal mine or Landfill site is original owner of methane

rights (ownership of resource)

� Methane rights are essential to claim ownership and � Methane rights are essential to claim ownership and

legal right to sell carbon credits

� Objective is agreement with resource owner on:

� Transfer of methane rights

� Allocation of carbon credit revenues

Development approach

Model 1: Royalty based

� No investment by the resource owner,

Biothermica is sole investor

� Transfer of methane rights to Biothermica � Transfer of methane rights to Biothermica

Resource owner benefits from royalty payments

Ex: percentage of Biothermica carbon credit sales

� Main advantage for resource owner:

No financial risk

Development approach

Model 2: Joint Investment

� Biothermica and resource owner share:

� Capital investment

� Operational costs

� Carbon credit revenues � Carbon credit revenues

� Possible creation of a Joint Venture dedicated to

project operations

� Advantage for both Parties:

Strong alignment of interests

3. CARBON PROJECTS3. CARBON PROJECTS

El Salvador landfill gas carbon project

Project overview

� Location: Nejapa landfill,

El Salvador (Central Am.)

� Carbon standard:

CDM of Kyoto ProtocolCDM of Kyoto Protocol

� Investor: Biothermica 100%

� 2 phases: Methane destruction (P1)

Energy generation (P2)

Innovative carbon project insurance

World Bank MIGA

� Multilateral Investment

Guarantee Agency (MIGA)

� Insurance against expropriation,

war, civil disturbance, and war, civil disturbance, and

government letter of approval

under CDM

� Q1 2006: Secured first ever

MIGA support for a carbon

project

Carbon credit production

� April – October 2006:

Construction of LFG collection

and destruction system

� 216,000 Certified Emission Reductions (CERs)

generated from October 2006 to April 2008

� 20% above initial CER projections as of April 2008

Project team & pictures

Carbon credit monetization and

Sale of major interest in project

� February 2007: 325,000 CERs sold to

the government of Luxembourg,

(Forward sale, on 2006-2012 production)

� April 2008: Sale of major interest in project to AES,

international energy company

� Strong cash position for investment in future carbon

projects

� Full project cycle, from development to project sale

CER prices

April 2007 – April 2008

ALABAMA COAL MINE ALABAMA COAL MINE

METHANE CARBON PROJECT

Alabama coal mine methane project

Introduction – VAM emissions

� Underground coal mine ventilation air methane (VAM)

large volumes of low concentration methane (0.2 -1.2%)

� 300 million tCO2e/y globally � 300 million tCO2e/y globally

� China: 40% of VAM

US: 15%

Ukraine: 15%

US Mine

Ventilation Shaft

Alabama VAM demonstration project

Project overview

� 1st VAM project in America

� Proprietary technology: VAMOX®

� Demonstration of technology and � Demonstration of technology and

financial viability of carbon activity

� Location: Walter Energy Mine

Alabama, USA

� Investor: Biothermica 100%

� Carbon standard:

Climate Action Reserve

Project milestones

� April 2008: Authorization from US Mine Safety &

Health Administration (MSHA)

� January 2009: Project commissioning

� February 2010: Project listed with

Climate Action Reserve

� June 2010: Registration of 1st year

of carbon credits

Overview of system and shaft

at WE Mine No. 4

Alabama Project

Main Results

� Availability rate 92%

� Average VAM concentration 0.9% (High)

� Carbon credits (1st year) 25 931 CRTs1� Carbon credits (1st year) 25 931 CRTs1

� Total expected credits (09-13) 120 000 CRTs

� Average CRT price (09-10) $6/CRT

� Viability demonstrated for

high VAM concentrations

1 Climate Reserve Tons

Moving forward

Agreement with Walter Energy

� Oct. 2010: Biothermica & WE announce

agreement to develop VAM projects

� Project 1: � Project 1:

� High VAM concentration

� 2 full-scale VAMOX® units

� 330,000 tCO2e/year

� Planned start date: Q4 2011

� Carbon standard: CAR or WCI regulatory system

Thank you!

Raphaël BruneauDirector, Carbon marketsDirector, Carbon markets

+1-514-488-3881 # 226

raphael.bruneau@biothermica.com

www.biothermica.com