BioCarbon Solutions International Inc (Pinksheets:BICS - News) (Pinksheets:BICS - News) announced today that it has entered into a Carbon Development Agreement (CDA) with Sierra Gold Corporation (Pinksheets:SGCP - News) for the purpose of co-developing carbon offset projects in Sierra Leone, Africa, with the intention of selling the offsets to the regulated European compliance market.
Sierra Gold Corporation is a gold mining and exploration company with numerous mining properties in Sierra Leone where gold extraction is currently taking place at Sierra Gold Corp's Sewa River, Moro River and Moa River projects. Under the Carbon Development Agreement between the companies, BICS will complete the preparation of a Project Design Document for the registration of an estimated up to 5.95 M tonnes of carbon offsets distributed over a reporting period of 7 years from 42,500 acres of degraded farmlands and forests to which Sierra Gold Corporation has secured tenure. In exchange BICS will receive ten percent of the net carbon revenues generated from the sale of carbon offsets. Moreover, BICS has the option to invest into the project infrastructure under terms that are subject to mutually acceptable negotiations.
Mr. John Semanchko, President of Sierra Gold Corporation, said, "We have begun our gold mining operations in Sierra Leone in 2006 and have found the country to be politically and economically stable through strong partnerships with local leaders. We have selected BICS for this work because of the credibility and reputation of the company's principal. We look forward to a long and fruitful relationship with BICS."
Dr. Luc Duchesne, CEO of BICS, said, "We're enthused to work with Sierra Gold Corporation. This will permit us to address the market need for carbon offsets in Europe, which is a well established market and permits us to diversify our operations globally."
The European Union Emissions Trading System (EU ETS) is the largest multi-national emissions trading scheme in the world and it is central to the European Union's climate policy. The EU ETS currently covers more than 10,000 installations with a net heat excess of 20 MW in the energy and industrial sectors which are collectively responsible for close to half of the EU's emissions of CO2 and 40% of its total greenhouse gas emissions.
The emitters within the ETS may reassign or trade their allowances by several means:
i.) privately, moving allowances between operators within a company and across national borders;
ii.) Over the counter, to privately match buyers and sellers; and,
iii.) trading on the spot market of Europe's climate exchanges.
Under the EU ETS, large emitters of carbon dioxide within the EU must monitor and annually report their CO2 emissions, and they are obliged every year to return an amount of emission allowances to the government that is equivalent to their CO2 emissions in that year. Clean Development Mechanisms defined by Article 12 of the Kyoto Protocol permit the trading of carbon emissions with a financial instrument called a Certified Emission reduction (CER). One CER represents the successful emissions reduction equivalent to one tonne of carbon dioxide (tCO2e).
Certified Emission Reductions (CERs) can be obtained by implementing emission reduction projects in developing countries, outside the EU, that have ratified (or acceded to) the Kyoto Protocol. Sierra Leone ratified the Kyoto Protocol on November 6, 2010, which offers the potential for the development of carbon offsets for sale on the European market.
Under the EU ETS, the governments of the EU Member States agree on national emission caps which have to be approved by the EU commission. Those countries then allocate allowances to their industrial operators, and track and validate the actual emissions in accordance with the relevant assigned amount. They require the allowances to be retired after the end of each year.
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