SOURCE: ECO2 Forests Inc.

ECO2 Forests Inc.

February 11, 2010 07:00 ET

ECO2 Forests Expands Kiri Tree and Target Revenue Streams Information

SACRAMENTO, CA and QUEENSLAND, AUSTRALIA--(Marketwire - February 11, 2010) -  ECO2 Forests Inc. (PINKSHEETS: ECOF) releases more information about the Kiri Tree and outlines the multiple target revenue streams intended to deliver bottom line profits for the company.

The Kiri Tree was selected by ECO2 Forests as the initial central tree as part of the company's business model. ECO2 Forests intends to deliver shareholder and investor value through the multiple revenue opportunities available through Kiri Tree forest creation as part of the Global Forestry Plan.

The use and 'know-how' in selecting specific Kiri Trees for each project is central to the successful implementation of the ECO2 Forests Global Forestry Plan projects around the world, including the recently announced Malakula Reforestation Project on the South Pacific island of Vanuatu.

"Our current and targeted projects each have their own unique climatic and soil conditions. Using linear selection from derivatives of the Kiri Tree enables ECO2 Forests to select the best suited strains to suit the conditions and project. The high quality end product lumber is indistinguishable between variants, but the ability to select the ideal variant ensures the tree maximises its carbon sequestration and growth rate. Matching variants to local conditions further aids the longevity of the project over multiple growth and harvest cycles," said ECO2 Forests Chief Executive Officer Collie Christensen.

The Kiri Tree's ability to sequester carbon dioxide (CO2) from the atmosphere enables ECO2 Forests to be able to generate carbon credits and achieve an immediate positive environmental outcome. Over a harvest period of seven years a single Kiri Tree would typically sequester up to 2.5 tons of CO2 thereby generating up to 2.5 carbon credits for ECO2 Forests, potentially among the highest sequestering trees currently being grown around the world.

"A single 1,000 acres in our Global Forestry Plan is forecast to sequester over 460,000 tons of CO2 from the atmosphere, allowing 460,000 carbon credits for ECO2 Forests every seven years. These carbon credits are required to be independently verified. Our Vanuatu project has been forecasted to deliver sequestration of approximately 7 million metric tons of CO2 from the atmosphere during the first full planting cycle," Christensen said.

Carbon credits generated by ECO2 Forests have been contracted to be sold through an independent distribution channel, through a recently announced 10-year contract, generating a forecasted US$120 million in revenue over the period of the contract, based only on the Vanuatu project alone.

"Although carbon revenue is only part of the overall project revenue, we expect this type of cash flow to increase shareholder value, and deliver a cash flow positive project prior to revenue created by the sustainably managed lumber harvest," Christensen continued.

ECO2's Kiri Trees, based on historical data, are forecast to grow 20 feet (6 meters) in their first season and a height of 80 feet (25m) and diameter of 20-inches (50 centimeters) in seven years. Linear selection techniques and the employment of ECO2's planting and growing methodologies under the Global Forestry Plan make the Kiri Tree, after seven years, ready for harvest; a fraction of the time compared to its traditional forestry competitors.

The lumber from the seven year harvest cycle contains minimal defects and is used across a wide range of industries, from fine furniture manufacturers, courtesy of its natural beauty and workability, through to the boating industry for framing due to its high strength to weight ratio.

One thousand acres of Kiri Tree grown under the Global Forestry Plan is projected to yield over 40 million board feet of lumber (95,000m3). Current lumber prices for Kiri Lumber range from USD$2.00 to $4.00 per board foot, depending on quality.

Approximately 3 million trees are intended to be planted over a seven year cycle in the planned Malakula Reforestation Project. ECO2 projects that under the sustainable Global Forestry Plan that the Kiri Tree may yield 100 million board feet (237,000m3) annually after just seven years, with annual revenue forecast in excess of US $260 million.

The Kiri Tree has a natural ability to regenerate from the stump after harvest, providing an additional level of sustainability for the Global Forestry Plan. Post harvest, the Kiri Tree grows a new stem from the stump which, in another seven years, will again be ready for harvest and generate up to 2.5 carbon credits for ECO2 Forests. This regenerative cycle is intended to allow ECO2 Forests to yield up to 10 cycles from a single plantation before the need for replanting.

Sustainability is central to the economic and environmental appeal of the Kiri Tree and its use within the Global Forestry Plan. It is intended to deliver a consistent and long-term revenue steam while creating hundreds of jobs for local communities and a positive environmental outcome.

About ECO2 Forests Inc.
ECO2 Forests is a progressive international forestation company focused on reforestation of previously damaged and deforested land and the saving of existing threatened forests through sustainable reforestation, afforestation and avoided deforestation projects for the generation and sale of carbon credits and sustainable timber to global markets.

ECO2 Forests management believe they have the ability to remove significant amounts of CO2 from the atmosphere through projects operated under the Global Forestry Plan and the sustainable Kiri Tree, a high CO2 sequestering tree that generates carbon credits. ECO2 Forests intends to produce revenue by selling those carbon credits to an independent third party or through the international carbon markets. Primary revenue is intended to be created through the sale of the sustainable lumber from the Kiri Tree in every 7-year harvest cycle.

Headquartered in Sacramento, California, the Company has adopted an 'E4 Philosophy' to achieve positive Environmental, Economic, Employment and Educational outcomes through its reforestation projects.

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Forward Looking Statements
This press release contains statements which may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include fluctuation of operating results, the ability to compete successfully, and the ability to complete before-mentioned transactions. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results.

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