CO2 Group secures NZ carbon sequestration project

THE BOURSE WHISPERER: The New Zealand-based partner of ASX-listed CO2 Group Limited, CO2 New Zealand has secured a $10 million carbon sequestration project in with the Iwi Maori community on the Land of the Long White Cloud’s North Island.

CO2 Group holds a 45 per cent interest in CO2 New Zealand.

The project is to be undertaken in partnership with the Iwi and other local authorities, and according to CO2 Group will bring additional benefits such as carbon based afforestation, erosion control and waterway management.

“This is a significant project for CO2 Group and further strengthens our New Zealand business,” CO2 Group chief executive officer Andrew Grant said in the company’s announcement to the Australian Securities Exchange.

“It also diversifies our revenue streams and client base, and it is in line with our strategy of partnering with leading blue chip organisations, municipalities and government bodies.”

As well as securing this particular investment project, CO2 New Zealand has also been able to secure over $7 million of long term carbon contract sales with major New Zealand Emission Trading Scheme (ETS) compliance parties.

Grant went on to point out t that CO2 New Zealand is continuing to expand its range of services within the country, further positioning it as a broader based environmental services company.

He provided an example of this diversification to be the mapping of Pre-1990 forestry land currently being undertaken by CO2 New Zealand for a range of its clients.

Owners of pre-1990 forest land are subject to deforestation obligations under the New Zealand Emissions Trading Scheme.

The decrease in land value for some pre-1990 forest landowners as a result of the ETS rules will be partially offset by a one-off free allocation of New Zealand Units (NZUs) from the Government.

CO2 New Zealand is currently involved in the mapping of more than 220,000 hectares which will realise close to 5.7 million NZUs for clients.

Co2 Group claims this makes CO2 New Zealand the largest land applicant to the New Zealand Government for Pre-1990 forest allocations on behalf of its clients.

“This area of our business continues to grow and we are partnering with a number of leading blue chip organisations in the energy, agriculture, forestry and manufacturing sectors to manage their mapping and application activities,” Grant said.

“It is further evidence of our diversified environmental services model.”

CO2 Group said it is in strong shape financially with no debt and a growing cash position.