U.S. Baccala Ranch Reforestation Project in Tehama and Plumas Counties, California is third stream with Mast
Regulatory Update provided for the Rimba Raya Project
TORONTO, Feb. 09, 2024 (GLOBE NEWSWIRE) -- Carbon Streaming Corporation (Cboe CA: NETZ) (OTCQB: OFSTF) (FSE: M2Q) (“Carbon Streaming” or the “Company”) is pleased to provide a corporate update including announcing that it has entered into a streaming agreement with Mast Reforestation SPV I, LLC (“Mast”), for the Baccala Ranch project (the “Baccala Ranch Reforestation Project”) in California, USA (the “Baccala Ranch Reforestation Stream”). The Baccala Ranch Reforestation Stream is the third stream under its previously announced project pipeline streaming agreement with Mast, to advance its pipeline of post-wildfire reforestation projects in the Western USA.
Baccala Ranch Reforestation Stream
The Baccala Ranch Reforestation Project, located in Tehama and Plumas Counties, California, USA, is expected to restore 523 acres at the Baccala Ranch property that was severely burned by the Dixie Fire in 2021. The Company will receive 100% of the carbon credits generated by the Baccala Ranch Reforestation Project, which are expected to be independently confirmed by a Climate Action Reserve-approved confirmation body.
The Baccala Ranch Reforestation Project is expected to remove a total of approximately 91,500 tCO2e and generate an equivalent number of carbon credits. First carbon credit issuance is expected in 2026.
Under the terms of the Baccala Ranch Reforestation Stream, the Company will make an initial upfront deposit of US$0.32 million on closing, with additional milestone payments of up to US$1.28 million as the Baccala Ranch Reforestation Project achieves site preparation, planting and issuance milestones. Carbon Streaming will also make ongoing delivery payments to Mast for each carbon credit sold under the Baccala Ranch Reforestation Stream, which will increase according to a tiered streaming structure dependent on return on invested capital thresholds. Closing of the Baccala Ranch Reforestation Stream is subject to customary conditions with closing expected to occur in mid-2024.
Proceeds from the Baccala Ranch Reforestation Stream are expected to be used for on-the-ground project implementation activities, including site preparation and planting. Baccala Ranch is significant for its high conservation value and notable intersection with the Pacific Crest trail, providing habitat for local fauna including black bears, mule deer, and bald eagles. Reforestation of Baccala Ranch will also reduce sedimentation, improve water quality and enhance hydrologic function of the Lake Almanor Watershed.
Sheep Creek Reforestation Project Update
The Sheep Creek Reforestation Project has been revised to include an additional section of the Sheep Creek Ranch, increasing the carbon credit generation expected under the Sheep Creek Reforestation Stream from approximately 225,000 carbon credits to approximately 285,000 carbon credits. The project has also secured a grant, enabling Carbon Streaming to reduce its upfront capital commitment to the project by US$0.25 million. The Company has entered into an amendment to its Sheep Creek Reforestation streaming agreement to reflect these updates.
Indonesian Regulatory Updates
Following the issuance in 2022 of Regulation No. 21 of 2022 (“Reg 21”) – the Indonesian carbon regulation, in 2023 the Ministry of Environment & Forestry (“MOEF”) issued MOEF Regulation No. 7 of 2023 on Carbon Trading Procedure in Forestry Sector – which serves as a sectoral carbon trading regulation for the forestry sector; and MOEF Decree No. 1027 of 2023 on Carbon Trading Road Map for Forestry Sector. Although these regulations have been issued, carbon trading activities in the forestry sector have not yet commenced and there continues to be no indication as to when such trading activities will begin.
Verra Updates
On January 23, 2024, as part of ongoing modernization of its methodologies, Verra announced that it had inactivated ‘VM0004 Methodology for Avoided Planned Land Use Conversion in Peat Swamp Forests, v2.0’. Verra confirmed that projects validated under VM0004 may continue to use it until their next baseline reassessment or crediting period renewal, whichever is the earliest.
Verra further reported that it anticipates releasing revised modules for Avoided Planned Deforestation activities in peatlands under the VM0007 REDD+ Methodology Framework (REDD+MF) by the end of Q1 2024, and is aiming to complete a new standalone methodology for tropical peatlands by the end of 2024.
The VM0004 carbon credit methodology has historically been used at the Rimba Raya project for carbon credit validation and verification. As previously announced, the Rimba Raya project was validated under Reg 21 and with the government-operated carbon registry, Sistem Registri Nasional Pengendalian Perubahan Iklim (“SRN”). In December 2022, Rimba Raya received validation under the SRN using an adaptation of the World Bank BioCarbon Fund’s Initiative for Sustainable Landscapes Emission Reduction Program Requirements Version 2.0_2021.
The Company believes that Verra’s routine inactivation of the methodology currently has no implications for the Rimba Raya project. Carbon Streaming is working with its partners to monitor any impacts that may arise in the future. The Company also understands that Verra and the SRN, through its joint taskforce, are continuing to advance discussions on the development of a Mutual Recognition Agreement (“MRA”) that would allow for SRN carbon credits to be validated and verified using Verra methodologies and for such carbon credits to be issued and tracked by both the SRN and Verra. The timeline for agreeing on and implementing any potential MRA is unknown at this time.
For a comprehensive discussion of additional risks, assumptions and uncertainties that could impact the Rimba Raya project and the Company’s Rimba Raya stream, including without limitation, other Indonesian regulatory developments, investors are urged to review the section of the Company’s Annual Information Form dated as of March 28, 2023 entitled “Risk Factors” a copy of which is available on SEDAR+ at www.sedarplus.ca.
Nalgonda Rice Farming Project Update
Carbon Streaming has also entered into a second amendment (the “Amendment”) to the Nalgonda Rice Farming streaming agreement with Core CarbonX Pte Ltd. and its service provider, Core CarbonX Solutions Private Limited (collectively, “Core CarbonX”). The Amendment provides, among other things, that Core CarbonX use a portion of the second installment to fund pre-payments to farmers and provides that Core CarbonX will implement Alternate Wetting and Drying (AWD) in rice fields covering 62,000 ha (an increase from the previous scope covering 55,000 ha). The project is completing registration under Verra and has been selected by the standard to participate in its remote sensing analysis pilot.
About Carbon Streaming
Carbon Streaming aims to accelerate a net-zero future. We pioneered the use of streaming transactions, a proven and flexible funding model, to scale high-integrity carbon credit projects to advance global climate action and additional United Nations Sustainable Development Goals. This approach aligns our strategic interests with those of project partners to create long-term relationships built on a shared commitment to sustainability and accountability and positions us as a trusted source for buyers seeking high-quality carbon credits.
The Company’s focus is on projects that have a positive impact on the environment, local communities, and biodiversity, in addition to their carbon reduction or removal potential. The Company has carbon credit streams and royalties related to over 20 projects around the world, including high-integrity removal, reduction and avoidance projects from nature-based, agricultural, engineered and community-based methodologies.
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Cautionary Statement Regarding Forward-Looking Information This news release contains certain forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of applicable securities laws. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, are forward-looking information, including, without limitation, statements regarding the timing and the amount of future carbon credit generation and tCO2e removals from the Company’s stream projects; registration, timing and the amount of future carbon credit issuances from the Company’s stream projects; expected use of proceeds from stream agreements; the impacts of the Baccala Ranch Reforestation Project on the surrounding ecosystem and other expected co-benefits; the timing and closing of the Baccala Ranch Reforestation Stream; impact of the Indonesian regulatory update and Verra methodology changes on the Rimba Raya project; progress on MRA discussions; and statements with respect to execution of the Company’s portfolio and partnership strategy.
When used in this news release, words such as “estimates”, “expects”, “plans”, “anticipates”, “will”, “believes”, “intends”, “should”, “could”, “may” and other similar terminology are intended to identify such forward-looking statements. This forward-looking information is based on the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. They should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Factors that could cause actual results or events to differ materially from current expectations include, among other things: volatility in prices of carbon credits and demand for carbon credits; change in social or political views towards climate change and subsequent changes in corporate or government policies or regulations and associated changes in demand for carbon credits; limited operating history for the Company’s current strategy; risks arising from competition and future acquisition activities; concentration risk; inaccurate estimates of growth strategy, including the ability of the Company to source appropriate opportunities and enter into stream, royalty or other agreements; dependence upon key management; reputational risk; general economic, market and business conditions and global financial conditions, including fluctuations in interest rates, foreign exchange rates and stock market volatility; uncertainties and ongoing market developments surrounding the validation and verification requirements of the voluntary and/or compliance markets; failure or timing delays for projects to be registered, validated and ultimately developed and for emission reductions or removals to be verified and carbon credits issued (and other risks associated with carbon credits standards and registries); foreign operations and political risks including actions by governmental authorities, including changes in or to government regulation, taxation and carbon pricing initiatives; due diligence risks, including failure of third parties’ reviews, reports and projections to be accurate; dependence on project partners, operators and owners, including failure by such counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; failure of projects to generate carbon credits, or natural disasters such as flood or fire which could have a material adverse effect on the ability of any project to generate carbon credits; volatility in the market price of the Company’s common shares or warrants; the effect that the issuance of additional securities by the Company could have on the market price of the Company’s common shares or warrants; global health crises, such as pandemics and epidemics, including the COVID-19 pandemic; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s Annual Information Form dated as of March 28, 2023 filed on SEDAR+ at www.sedarplus.ca.
Any forward-looking information speaks only as of the date of this news release. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
