REG - European Green Trns. - Option to Acquire Irish Carbon Credit Project

European Green TransitionAnnouncement

23/05/2024 07:00

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RNS Number : 5372P  European Green Transition PLC  23 May 2024

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018. With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

23 May 2024

European Green Transition plc

("European Green Transition", "EGT" or "the Company")

Option Agreement to Acquire Prospective Carbon Credit Project in Ireland

 

European Green Transition (AIM: EGT), a company developing green economy
assets in Europe which aims to capitalise on the opportunity created by the
green energy transition, is pleased to announce it has entered into an
exclusive option agreement (the "Option") to investigate the potential to
develop a peatland carbon sink programme and in turn generate carbon credits
(the "Carbon Credit Project") at the Altan farm in Donegal, Ireland ("Altan").

 

Highlights

·    Altan is a c.1,370 acre site primarily comprising of blanket peatland
located in county Donegal in the northwest of Ireland.

·    Option offers EGT full, exclusive access to conduct additional due
diligence on the proposed Carbon Credit Project over a 12-month period.

·    Agreement is in line with EGT's strategy to target green economy
assets in Europe with revenue potential.

·    EGT will conduct further diligence activities to ascertain the work
required to commence the generation of carbon credits at Altan.

·    During the due diligence phase, EGT will engage with all relevant
stakeholders to ensure the project aligns with the Company's ESG standards.

·    Should EGT exercise the Option it would expect to monetise the
project by generating revenue through carbon credits.

·    EGT does not intend to acquire the land from the landowner, rather
EGT intends to generate carbon credits through a revenue sharing model with
the landowner, ensuring low capital expenditures in line with the Company's
capital light approach.

·    The Carbon Credit Project provides the potential for EGT to develop a
business both generating and trading carbon credits.

·    The Company intends to replicate this revenue sharing model, building
a portfolio of peatland carbon credit projects, similar to a number of
successfully implemented projects in Scotland.

·    EGT could extend this business to trading third party carbon credits
outside of the Company's portfolio of carbon credit generating projects.

·    Should the Company exercise the Option, any further agreement with
Altan would be subject to, inter alia, the Company successfully agreeing
terms, purchase price and entering into further documentation. There can be no
guarantee that the Option will be exercised.

·    The Company will make further announcements as appropriate.

 

Jack Kelly, Chief Financial Officer of European Green Transition, said:

"The Altan Option agreement offers EGT the opportunity to generate cash flow
in a capital light manner by generating carbon credits. The market for
voluntary carbon credits is projected to grow by a factor of 15 or more by
2030 as companies progress towards carbon-neutrality goals, and this agreement
offers us an entry point into this high-growth market. Other European
countries, particularly Scotland, already have a thriving carbon credit
industry, generating credits from peatland sinks.

 

"Peatland covers 1.5 million hectares of land in Ireland, however most of our
blanket bog habitats are in poor condition due to human activity and, as a
result, are not functioning as they should. Rather than absorbing carbon from
the atmosphere, they are leaking carbon back into the environment, which had
previously been stored in the peat for thousands of years. The UN has
estimated that Ireland's degraded peatlands emit 21.5 million tonnes of CO2
equivalent per year, and Ireland has recently been referred to the Court of
Justice of the European Union for failure to protect its peat bogs. We see
this Option as not only developing our prospective carbon credit revenue
stream, but also potentially contributing positively to Ireland's climate
goals.

 

"The Altan carbon credit generation project has the potential to be one of
Ireland's first peatland carbon sink projects, and could also be the first
step in a business model of both generating and trading carbon credits that
could be scaled up in the years and months ahead."

 

Structure of Option Agreement

The Company has signed an exclusive 12-month option agreement with the Trustee
of the Landowner for Altan (the "Landowner") to obtain the economic rights to
develop the Carbon Credit Project at Altan. The Company has paid a fee of
€100,000 to the Landowner as consideration for entering into the Option. The
Company may exercise the Option to acquire the rights to generate carbon
credits at Altan upon successfully completing its due diligence review of the
Carbon Credit Project. It is not EGT's intention to acquire the land, rather
to generate carbon credits at Altan through a revenue sharing model between
EGT and the Landowner. The Company is looking to replicate a number of
successfully implemented projects in Scotland. Scotland leads the way in
Europe in peatland re-wetting and will be restoring 3,000 hectares of bog a
year by 2025.

 

Building a Carbon Credit Generating Business

As energy demands of businesses grow globally, there is an increased scrutiny
on the environmental footprint of each business, particularly its emissions.
Policymakers have implemented challenging targets for businesses to progress
towards carbon neutral goals in the coming years.  Therefore, large
organisations actively buy carbon credits to absorb their emissions or to
claim a contribution to societal climate targets. The Taskforce on Scaling
Voluntary Carbon Markets, sponsored by the Institute of International Finance
with knowledge support from McKinsey, estimates that demand for voluntary
carbon credits could increase by a factor of 15 or more by 2030, with a value
upwards of $50 billion, and by a factor of up to 100 by 2050.

 

A carbon credit is generated by either removing from the atmosphere, or
avoiding the emission of one tonne of carbon dioxide equivalent. Carbon
credits can be sold through a large number of organisations and carbon markets
exist as mandatory (compliance) schemes or voluntary programs. Peatlands have
immense carbon market potential as restoration can substantially reduce
emissions and ultimately sequester carbon. As a result, EGT sees significant
opportunity to generate carbon credits from Altan and scale the Carbon Credit
Project across other peatland opportunities.

 

Peatlands - A Nature-Based Solution to Europe's Climate Goals

Peatlands are vital ecosystems in the fight against climate change, covering
just 3% of the world's surface yet holding nearly 30% of all natural carbon -
almost twice as much as the entirety of Earth's forest biomass. Peatlands are
characterised by permanently waterlogged conditions that prevent plant
material from fully decomposing, keeping carbon locked in and preventing it
from entering the atmosphere as greenhouse gas.

 

Peatlands continue to be degraded around the world. About 12% of the world's
peatlands have been drained for agricultural and forestry use with degraded
peatlands accounting for 4% of global annual emissions.  The European Union
has experienced the largest losses, with over 50% of former peatland areas no
longer accumulating peat. Peatlands cover 1.5 million hectares in Ireland and
approximately 30% have been degraded through activities such as draining and
agricultural practices.

 

Drained and degraded peatlands currently emit around twice as much greenhouse
gas as the aviation industry. This is a result of the peat soil becoming
exposed to air, which accelerates the decomposition of its organic matter,
releasing stored carbon as CO2 into the atmosphere. Restoring European
peatlands would prevent roughly the same amount of annual emissions as taking
84 million passenger vehicles off the roads. Peatlands also naturally
sequester carbon by absorbing it through plants and storing it in the ground
(provided the water table is kept persistently high), making them a valuable
tool in plans in climate mitigation plans.

 

 

Enquiries

European Green Transition plc

 Aiden Lavelle, CEO  +44 (0) 208 058 6129
 Jack Kelly, CFO

Panmure Gordon - Nominated Adviser and Broker

 James Sinclair-Ford / Dougie McLeod / Ivo Macdonald  + 44 (0) 20 7886 2500

 Mark Murphy / Hugh Rich / Rauf Munir

 

Camarco - Financial PR

 Billy Clegg, Elfie Kent, Lily Pettifar, Poppy Hawkins  europeangreentransition@camarco.co.uk

                                                        + 44 (0) 20 3757 4980

Notes to Editors

 

European Green Transition plc (listed on the AIM London Stock Exchange under
the ticker "EGT") is a business operating in the green economy transition
space in Europe. EGT intends to capitalise on the opportunities created by
Europe's transition away from fossil fuels to a green, renewables-focused
economy. The Company plans to expand its existing portfolio of green economy
assets through M&A, targeting what it believes to be distressed and
undervalued projects. EGT sees substantial opportunities to deliver value from
its M&A pipeline, which includes critical material, wind, solar,
processing and recycling projects.

 

EGT's highly experienced leadership team have a strong track record of
building successful public companies through the acquisition of distressed
assets. EGT plans to replicate this approach, creating a sustainable and
profitable business while generating shareholder returns.

 

The Company's current portfolio of green economy assets includes the Olserum
Rare Earth Project in Sweden. The Olserum project is one of Sweden's projects
of "National Interest" and has the potential to become Europe's first
operating REE mine. EGT has taken an exclusive option over a copper tailings
recycling project in Cyprus with the potential to generate meaningful amounts
of copper, and with the site and surroundings offering an excellent long-term
location to establish a potential solar power facility. EGT own additional
projects in northern Sweden and Germany which have defined and tangible upside
with potential to realise near-term inflection points in a cost effective
manner. EGT's objective is to build a profitable business while aiming to
monetise some of its assets through sale or partnership with larger industry
players or European end users. The team is focused on success while remaining
committed to its defined ESG strategy, ensuring excellent development
practices across all projects in addition to regular local community
engagement.

 

For more information visit www.europeangreentransition.com
(http://www.europeangreentransition.com) or follow us on Twitter
(https://twitter.com/EuropeanGreenT) and LinkedIn
(https://www.linkedin.com/company/european-green-transition-ltd/) .

 

 

 

 

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