Green Filter Initiatives: Growth Through Sustainability, Powered by Jomini™ 1 THE CARBON MARKET:...

Green Filter Initiatives: Growth Through Sustainability,

Powered by Jomini™

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THE CARBON MARKET:

Managing the Risks&

Capturing the Opportunities

Measurements that Matter™



Presentation Overview

To review the Carbon Market, Offsets, and Credits

Address Regulatory and Reporting Issues

The Jomini Response: Measurements that Matter™

• Develop the Strategy: Risk or Reward

• Eliminate the “GreenWash”

• Marketing Advantage, Economic and Positional Value: The ROGI™

• Strategies in Action: Case Study (MotorSilk™, IIG, Canadian Tire, AAF)

Questions

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Key Principles

Green Demand Continues to Grow• Increasing consumer demand for green products and greener operations

creates significant market opportunities- strong economic drivers

• The pursuit of profits and the aversion to the cost of energy and volatility of fuel prices

Going Green Requires Collaboration• Greener product creation affects everything

• R&D processes to manufacturing, supply chains, packaging, marketing and infrastructure—as well as relationships with customers, partners and shareholders

Proactive and Progressive Steps are Key• Avert legislation, regulation and consumer backlash and promote a green

image

Corporate “Peer-to-Peer” Pressure

Productivity and Efficiency = Cost Benefit

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Carbon Market Review

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Kyoto Protocol: Greenhouse Gases Targeted

These are groups of gases Used as alternative to ozone- depleting CFCs in refrigeration systems

Hydroflurocarbons(HFCs) and

Perfluorocarbons (PFCs)

Used in the electrical insulator, freezing agent, heat conductor.

Sulfur hexafluoride (SF6)

Emitted from the use of nitrogen fertilizers, from burning fossil fuels and from some industrial and waste management

processes

Nitrous oxide (N20)

Comes from landfills, coal mines, oil and natural gas operations, and agriculture.

Methane (CH4)

By far the most important GHG. Generated from burning fossil fuels and

deforestation.

Over 80% of US GHG emissions comes from CO2 generated from burning fossil fuels

Carbon Dioxide (CO2)

Description Green House Gas (GHG)

These are groups of gases Used as alternative to ozone- depleting CFCs in refrigeration systems

Hydroflurocarbons(HFCs) and

Perfluorocarbons (PFCs)

Used in the electrical insulator, freezing agent, heat conductor.

Sulfur hexafluoride (SF6)

Emitted from the use of nitrogen fertilizers, from burning fossil fuels and from some industrial and waste management

processes

Nitrous oxide (N20)

Comes from landfills, coal mines, oil and natural gas operations, and agriculture.

Methane (CH4)

By far the most important GHG. Generated from burning fossil fuels and

deforestation.

Over 80% of US GHG emissions comes from CO2 generated from burning fossil fuels

Carbon Dioxide (CO2)

Description Green House Gas (GHG)



Carbon Market ReviewDiscussion from Earth Summit (1992)

Kyoto Protocol (1997)• Gov’t of Canada responsibility: GHG Quantification and Reporting of

GHG Emissions and Removals Standard

• Adoption of ISO 14064 Standard at COP/MOP 2005

• Process ‘sold’ to CSA: accepted by International bodies, i.e. GHG Protocol, ASTM, trading platforms etc.

Clean Development Mechanism (CDM): International Trading

EU ETS: 2005: Growing pains to 68% world market

World market (2009): €136 Billion (€ 11.40 weighted average)

Chicago Climate Exchange/RGGI/CAR; Alberta*, BC

Pending Legislation/Copenhagen Accord

Voluntary Reporting: Carbon Disclosure Project (CDP)6



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Carbon Offsets

2008

There are 2 fundamental types of carbon instruments :• Allowances• Project-based credits

Allowances are generally used for compliance with government schemes

An allowance is a permit to emit a quantity of CO2e (normally 1 tonne)

Project-based credits can be used for both compliance and voluntary activities

A project-based credit represents an emission reduction below a baseline (‘business as usual’)

Most credits / allowances are NOT interchangeable with each other for regulatory purposes

Prices vary widely between instruments

2012 2012 2008



Trading and Use Of Offsets



National Trends: Legislation vs Regulation

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The Perfect Storm: Congress, EPA, Corporations

and the Consumer

Increased Scrutiny – Regulatory/Public concern on emissions

07/12/09: Massachusetts vs. EPA formally declares CO2 a “Dangerous Pollutant” • Mandatory reporting requirements at 25K tonnes (4,500 passenger vehicles)

• Annual emission reports starting in 2011 for the calendar year 2010 (13k facilities)

02/23/10: EPA announces Phased Approach to Regulation• Targeting large facilities in early 2011; medium-sized emitters Q3 2011; smaller

emitters 2016

• Consideration now to raising the emissions thresholds in its proposed “tailoring” rule to exempt more facilities

02/12/10: U.S. Securities and Exchange Commission’s issues new climate change disclosure guidance• Business must now report on how climate change will impact their businesses

and how it poses new challenges for them

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Converging Forces: Canada and the United States

06/10/09: Canada issues rules for claiming GHG emissions or

“offsets” that will form the basis for a national carbon market

• Federal System is to complement and not duplicate Provincial Market

• Based on Provincial methodologies, ISO, and CDM Standards

07/20/09: Canada sets deadline for emissions reporting:

• Emitters to report 2009 emissions by June 2010

• Facilities in excess of 50,000 tonnes GHG emissions to report

• Alberta moved to same threshold reporting target

31/01/10: Announced Copenhagen Accord Targets

• “Harmonized” approach with the US

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North American Regional Initiatives



Regional Cap & TradePrograms



Pre-Compliance “Offsets”

Project-type Pre-Compliance Protocol

Afforestation Creation of a forest where none has existed since at least 1990

Landfill Gas Capture and Combustion

Capture and destruction of methane from sites

Reduced or no-tillage Reduction in the amount of tillage on farmland (soil management)

Wind Generation of Electricity from Wind Energy

Forest Management Quantification of the net benefits of activities that sequester carbon on forestland

Wastewater Management Capture and destruction of methane produced from anaerobic wastewater treatment processes and to prevent the venting of biogas to the atmosphere

Anaerobic Biodigestors Decomposition of Agricultural Materials



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Potential Carbon Liability by Sector

0%

10%

2%

12%

6%

4%

8%

Source: Investor Responsibility Research Centre Institute

Carbon costs at $28.24* per tonne of CO2e would equate to at least 1% of revenue for 109 companies.

For the five most Carbon Intensive sectors costs would average between 1% and 12% of revenue

For 32 companies, carbon costs would equate to over 5% of revenue.



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Wal-Mart

Wal-Mart Taps CDP for Emissions Reporting in Sustainability Index

News Release

(Little Rock, ARK, July 16, 2009) Wal-Mart's top executive said Thursday that the world's largest retailer hope a new effort to develop eco-ratings for products the company sells can result in international sustainability standards that all retailers can apply to all suppliers.

Highlights:

Wal-Mart exec foresees eco-ratings for all

As Wal-Mart goes, so goes the world. When it comes to carbon emissions reporting, the $406 billion retailer appears to be suggesting that suppliers go through the Carbon Disclosure Project.

Additionally, Wal-Mart sees its new sustainability index leading to a universal standard that can be applied across “all retailers, all suppliers,” said Wal-Mart chairman and CEO Mike Duke.

“We see this as universal — this is not a U.S. standard,” Duke said during a July 16 meeting to unveil the firm’s new sustainability index.



Jomini at a Glance

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Technology company involved in commercialization of new technologies

Government and Private Research & Development

Established “Jomini Network™” as a result of partnerships from interaction seeking or providing unique technology applications/services and products

Provide Solution Sets resulting in Sustainability Opportunities based on ISO 14064 Conformance and Jomini Green Filter™ Review

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Integrated Solutions

ISO 14064 Project Leadership through Jomini Green Filter™

Development of ISO 14064 Process Conformance Green Plans and Programmes

Deliver economic and marketing benefits

From ROI to ROGI™

International Projects: CDM in Asia, Africa

North American Regulated (Alta, BC, RGGI)

North American Voluntary (VCS, ISO)

Federal Offsets for Compliance



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Overview: The Jomini Network &

Technology Deployments

Manufacturing

Automotive Parts: Magna International Inc., Martinrea International Inc.

Automotive OEMs: Japan and Europe

Process Engineering

Vehicle Performance

• Irving Oil/ Canadian Tire

Transportation

Rail: Bombardier/ CN Rail/ CPR/ Amtrack

Shipping/Intermodal/Rail Operations

Trucking and Transport

• Large Canadian/US Fleets

Retail

Canadian Tire/Walmart/Mars

Other SegmentsEnergy Efficiency Bundles and Solutions: ISO, VCS

Wind, Solar and Roofing Technologies: ISO, CAR

Waste to Energy: CDM, JI, ISO, VCS, RGGI, CAR

Forests Protection:

• 4 National Government REDD Projects

Equipment Recycling

High Heat Insulation: Oil and Steel: ISO, VCS

HVAC and Lighting Systems: ISO

Hydrogen OEMs

Run-Of River Hydro: CDM, ISO, VCS, ACR

Waste Oil Recovery

Transportation Solutions/Technology: ISO, ACR

Power Supply Solutions

Diversion and Landfill Quantification



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The “Jomini Difference™”: A Leading Advisor

Partner Management

Corporate Market Leader

ExpertiseUnique GHG Qualifications

Proven ability to work with CDM, VCS, CAR, ACR, EU ETS, REDD Standards

Corporate Sustainability Programmes

Strategic Marketing for Competitive Distinction

Accelerated ROI Models & Carbon Trading Execution

Bennett Jones, LLP: ISO Standard ‘Framers’

International Scope & Broad environmental Reach

Environment Compliance

Technology Commercialization

Access to World Markets

Establishment of the Jomini Sustainability Network

Driving force in Industry Standards and Protocols: IPOG, US Government*

Expertise in Offset Projects and Key Verticals [Renewable Energy, Forestation, Waste, Air Quality, Transportation]

Significant R&D investment

IP Asset Management

Verdecon Capital Inc.



Areas of Focus

Offset Programmes

Corporate Facilities Plan Purchasing and Acquisitions

R&D ActivitiesUnique GHG Confirmation

Assess Value of Solution from GHG Quantification of Reductions

Meet OEM and Consumer Needs

Accelerated ROI Models

Renewable Energy Projects and Sources

Quantify to Maximize Value from ‘Day to Day’ activities

Replicate Best Practices as Green-Print for Facilities/Operations

Infrastructure Projects

Deploy Clean-Tech/e²-Bundles

Better Cost Management and Operational Savings

Employee Programmes to Assist in Corporate Objectives

Positive Economic and Marketing Returns from Off-Setting Carbon Footprint

Deployment of Quantified and Proven Solutions to Meet Sustainability Initiatives

ROI of Proposals include Carbon Market Returns

Due Diligence to Include Environmental Risks

Assess all Energy Sources

Intelligence with Environmental Regulation

Understand Supply Chain Procedures*, Transport etc.

Products that have Achieved ISO Process Conformance

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22

58.0

32.0

-

10

20

30

40

50

60

Emissions GtCO2e/year

BAU (Forecast) New Solutions(Objective)

Life Cycle Assessment to Deliver Maximum Value

} 26

Emission Reduction Quantification



Proprietary Process & Programmes

Business Strategy

& PlanningValidation

Project Plan &

Assertion

Project Plan Registration

Monitor, Report & Register

Verification Aggregation Trading

Trading Phase: Making of a VERR

GHG Process ConformanceJomini

Environmental Inc.

Jomini Environmental

Inc.

Independent Third Party

Canadian Standards Associatio

n


Inc.

Independent Third Party


Inc.

GHG Credit Exchange

Project Phase: Making of an ERR

GreenPrintAssessment™

(GPA)



Opportunity vs Risk

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Climate Risk & Opportunity: Selected Industries

Electric Power

Manufac-turing

Auto & Transpor-

tation

Oil & Gas

Mining Forestry Agricul- ture

Fisheries Health-care

Real Estate

Tourism Water

Regulatory Risk

Physical Risk (dependent on location)

Competitive, Reputational Risk

◆ ◆ ◆ ◆ ◆ ◆ ◆

Regulatory Opportunity

◆ ◆ ◆ ◆

Technological Opportunity

◆ ◆ ◆ ◆ ◆

Competitive, Reptuational Opportunity



Strategic Opportunities:

Offset Aggregation Verifer

Energy from

Waste/Tailings

Reduced or

No Tillage

Waste WaterManagement

Low Carbon Fuel

Production

Transportation

Reforestation

Regulated Entity

Cre

dit

Cre

dit

Energy Efficiency &Renewables

(Wind)

Credit

Credit Credit

Credit

Cred

it Credit

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Source: 2008 World Economic Forum

Supply Chain “Decarbonization”

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“Greenwashing” Runs Rampant

98% of Products’ Green Claims are Misleading

ONLY 2% of products claiming in some way to be “green” actually measure up

The number of big box store products making green claims has grown 79% since 2007

“Greenwashing” has become an international challenge

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Source: TerraChoice April, 2009



Spin

Phony constituents (hidden trade-off)

Who Says? (No Proof) Clarity of Message (Vagueness) Why Should I care? (Irrelevance) Risk in the Market (Fibbing) Relativism (Less of Two Evils)

Green.wash (green’wash’, -wosh’) – verb: the act of misleading consumers regarding environmental practices of a company or the environmental benefits of a product or service.

SubstanceJEI ISO 14064, Green Filter Initiatives™

Substantiate the claims and eliminate the GreenWash

Meet ISO 14021 Guidelines

Internationally recognized for Economic and Marketing Success

Leadership

“GreenWash” or Green

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Strengthen Competitive Position

Define/re-define Market Position Internationally

• Competitive Differentiation

• Meet Consumer/Client Requirements

• Establish Leadership Position

• Review Pricing Strategy

Establish clear leadership through increased Market-Share

Make use of “ISO 14064 Process Conformance” moniker, or other statement depending on Standard and Registry

Ability to Register in multiple markets for Environmental market Conformance

Marketing Value



MotorSilk™ - A Case Study

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Case Study

A Jomini Sales Corporation Solution

Technology developed for NASA at Argonne National Laboratory (US Department of Energy Research Facility)

The Boron CLS Bond™, a patentedSelf-renewingHigh-performanceBiodegradableAnti-corrosiveBottom line impactingLubricant and surface coating

friction reduction technology

Winner:Environmental Technology Partnership AwardR&D 100 Award

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MotorSilk™ Engine Treatment

One-time use; passivates the metallic surface

Crystal Lattice Structure creates Boundary Layer with Co-efficient of friction: 0.01

Delivers 8% improvement in fuel efficiency for in-use vehicles

Decreases emissions through reduction in engine wear (elimination of wear metals)

4-8 hour drive-time to form boundary layer

Biostat/Anti-corrosive/Anti-oxidant

Displaces varnish, carbon and sludge in used equipment

Prevents deposit formation in new equipment

Solution is 100% Biodegradable



MotorSilk™ CO2e Results

Project Assertion: High Level of Assurance: ISO Process Conformance

Calculated Results for 200,000 Kms:

• OEM First Fill (10 years @ 20k Kms): 3.67 tonnes CO2e

• Same for Automobiles and Fleet Vehicles (Driven Kms Dependant)

• Trucks Short Haul: 120,000 Kms 16.76 Tonnes per annum

• Trucks Long Haul: 240,000 Kms 33.52 Tonnes per annum

CarQuest: 6110 vehicles: 14.5% improvement in fuel efficiency• Currently Trading in New York: 32,000 Tonnes

• Now aggregating for Nestlé Waters (USA), Inter-State Trucking etc.

Currently Being Deployed at Kraft (USA): • 2500 Trucks to be treated (Class 6, and Class 8)

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Within the next 12 months many companies will change how they engage with their suppliers

Source: A.T. Kearney & Institute for Supply Management

52%

74%

48%

70%

39%

65%

22%

44%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Usage of Supplier Management Processes (% of respondents)

Reward Supplier Practices

Joint Process Improvement

Require 3rd Party Certification for Major Suppliers

Track a Set of Sustainability Metrics for

Major Suppliers

Do This Today

Will Do This in 12 Months



QUESTIONS

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Sources: Bloomberg, AT Kearny Analysis

“Green” Winners

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ISO 14064 OverviewAccepted as the Standard

ISO 14064-1: Specification for Quantification and Reporting of GHG Inventories and Carbon Footprint

• Organization Level

ISO 14064-2: Specification for Quantification, Monitoring and Reporting of GHG Emission Reduction and Removal Enhancements

• Projects

ISO 14064-3: Specification for Validation and Verification of GHG Assertions

These principles are successfully employed by Jomini to Technologies, Products, and Energy Efficiency Applications

Across the Globe … able to meet CDM/VCS requirements

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GHG Inventories



In The News

Three-quarters of Canadians take into account the environmental impact of their actions when buying a product

The same proportion (75%) also believes that most environmental claims are just marketing ploys

More than 85% want standards enforced and support labelling regulations

Far more consumers would buy green products if they were priced the same as standard items (40%)

Most consumers are not convinced that it actually costs more to produce green products

Survey showed significant opportunity for companies that can prove their products are eco-friendly - ISO 14064, backed by Jomini

Going Green

Source: Gandalf Group for Bensimon Byrne, Globe and Mail, July 2008



Areas of Interest

Strategic Implications: GHG Reporting companies that complete with more carbon efficient peers could lose market share, or risk investor concern

Measuring Direct impacts• Understand “hot spots” in operations

• Financial exposure to carbon and other environmental costs

• Performance relative to competitors

Measuring Indirect impacts from suppliers• Minimize supply chain exposure

• Risks of carbon costs due to inefficiency

Benchmark Performance• Carbon Footprint

Partnership and Jomini Network • Access to technology

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Areas of Interest

General Operations• Facilities/IT Management

• Process Activities: Furnaces, Kilns, Milling, Grinding

Energy• Source/Usage

Waste• Tailings/Re-use- W2E

Water• Re-Use

Transportation• On-Site/Truck/Rail/Stand-BY

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