SOURCE: ECO2 Forests Inc.

ECO2 Forests Inc

January 04, 2010 16:05 ET

ECO2 Forests Signs Multi-Million Dollar Carbon Credit Deal

SACRAMENTO, CA and QUEENSLAND, AUSTRALIA--(Marketwire - January 4, 2010) - ECO2 Forests Inc. (PINKSHEETS: ECOF), an international sustainable forestry company focused on reforestation and carbon sequestration projects, has reached a multi-million dollar agreement for the sale of carbon credits created through the commencement of its Global Forestry projects.

ECO2 has entered into contract with CarbonX Trade, Inc., a wholly owned subsidiary of Lakewood, CO based Green Ventures Future Fund, for the sale of all generated carbon credits through the first seven years of planting from the company's recently announced Vanuatu venture and its ongoing projects in the Eastern states of Australia where the planting of 150,000 initial Kiri trees has been completed creating approximately 375,000 carbon credits at an initial price of $10.00us per credit from these trees. Green Ventures Future Fund ("Green Ventures") will begin making payments for those carbon credits over a 12 month period beginning in April of 2010 creating ongoing cash flow for ECO2 while allowing the company to incrementally build income. An additional 150,000 trees are on schedule to be planted by the end of Q1 2010 in Vanuatu, following the anticipated land closing in mid-January, with their initial payments then commencing 90 days after completion. ECO2 plans to have a minimum of 3 million trees planted by the end of the seven year cycle per the contract with Green Ventures.

Other key components of the contract with the buyer include the first right of refusal to carbon credits from any future forestation projects initiated by ECO2 during the total ten year contract period; a purchase price based upon the 90 day trailing average price of the European Emissions Trading Scheme, less a 20% discount in price, a five percent increase per year in the price of each carbon credit with a base starting price of $10.00us.

ECO2's Global Forestry Plan intends to deliver large scale reforestation projects with a positive environmental and economic impact for the global environment. The high level of carbon sequestration is a naturally occurring event of the Kiri Tree, however improvements to the strains developed over the last 20 years sees improved levels of carbon dioxide absorption.

"The Kiri Tree is an intrinsic element of the Global Forestry Plan; it is a high carbon sequestering (absorbing), fast growth tree ready for mature harvest in just seven years. Once harvested it regenerates from the stump and goes through the carbon sequestration and fast growth cycle again. This cycle is designed to be sustainable and should allow ECO2 Forests to generate up to 2.5 carbon credits every harvest per tree between each harvest cycle. The resulting forests create a consistent supply of environmentally friendly lumber. One of our next steps is to focus on securing the forward orders for our lumber sales," ECO2 CEO Collie Christensen said today.

"Since listing publicly in September we have had a strong level of support from both private and 'accredited' investors and this significant announcement serves to re-affirm the support the company is receiving in working its way through delivering its Global Forestry Plan. We feel that many of our investors have joined us because they believe in what we are doing from an economic level and an environmental level as well."

The ECO2 Forests Global Forestry Plan is specifically designed to meet the company's E4 Philosophy which ensures positive outcomes are achieved from an environmental, economic, employment and educational perspective.

The inclusion of carbon credits in sustainable forestry allows the Global Forestry Plan to generate cash flow from the beginning of the forests life-cycle. Forestry has traditionally relied solely upon revenue from harvests, often decades after initial planting. The generation and sale of carbon credit sales changes the business model dramatically.

"The demand for lumber is still expected to increase for decades to come but as a society, we cannot continue to log old forests like they have been in the past. Reforestation and the generating of revenue from carbon credit sales highlights how a move to sustainable forest creation can generate a positive cash flow years before a single tree is harvested and all done while creating a positive environmental outcome," Christensen said.

About ECO2 Forests Inc.

ECO2 Forest Inc. (PINKSHEETS: ECOF) is an international sustainable forestry company focused on reforestation projects under our Global Forestry Plan for a positive environmental and economic impact through large scale bio-sequestration of carbon dioxide greenhouse gases, the generating of carbon credits for resale and the eventual growth and sale of sustainable timber to global markets.

In Management's view, our focus on proprietarily developed intellectual property regarding Kiri tree reforestation, positions the Company well to take advantage of the emerging demand for renewable forests and the escalating carbon credit market.

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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