HydroDec Group plc Carbon Credit Service Agreement (8117K)
12 July 2017 - 4:00PM
UK Regulatory
TIDMHYR
RNS Number : 8117K
HydroDec Group plc
12 July 2017
12 July 2017
Hydrodec Group plc
("Hydrodec", the "Group" or the "Company")
Carbon Credit Service Agreement
Hydrodec Group plc (AIM: HYR), the clean-tech industrial oil
re-refining group, is pleased to confirm that it has entered into a
management services agreement in respect of all carbon credits
generated by Hydrodec of North America ("HoNA") recognised and
recognisable under its registration by the American Carbon Registry
("ACR") for HoNA's production for the period commencing 1 January
2015 and up to and including the period ending December 2022 (the
"Agreement").
In 2016 Hydrodec received carbon credit approval from the ACR,
enabling its product to be sold with a carbon offset and creating
an incremental revenue stream. The Group is now generating carbon
offsets through the re-refining of used transformer oil, which
would otherwise ordinarily be incinerated or disposed of in an
unsustainable manner. This is a highly distinctive feature for the
Group, confirming (as far as the Board is aware) Hydrodec as the
only oil re-refining business in the world to receive carbon
credits for its output. This is a significant endorsement of the
Company's proprietary technology and standing as a leader in its
field.
Under the terms of the Agreement with 3Degrees Inc.
("3Degrees"), a provider of renewable energy and carbon mitigation
strategies, products, and services, 3Degrees will prepare the plans
and reports required under ACR to support the accreditation of
carbon credits for the periods outlined above, and will work with
ACR and other relevant organisations to effect issuance of such
credits for sale. 3Degrees will manage all aspects of the
monetisation and sale of such credits, including marketing them to
eligible buyers, negotiating offers with such buyers, drafting and
negotiating sale agreements, and delivering credits to buyers.
Under the terms of the Agreement any such sale by 3Degrees will be
at a minimum price, unless otherwise approved in writing by
Hydrodec. If, at any time during the term of the Agreement,
Hydrodec identifies directly prospective third-party purchasers of
the credits, Hydrodec will be entitled to pursue such sales, if
such prospective sales are at a price that is at least 20% greater
than the current minimum guaranteed under this arrangement.
The Company anticipates that going forward it will generate
50,000 to 60,000 tons of carbon offset
annually and expects it could earn up to $5 per ton from the
ongoing generation of such credits based on recent industry
publications.*
Commenting on the Agreement, Chris Ellis, Chief Executive
Officer of Hydrodec, said: "This is another significant step
forward in leveraging the accreditation gained from the ACR for the
Hydrodec process in 2016. Concluding an agreement with such a
market leading organisation as 3Degrees provides further validation
that there is an active market for our carbon credits and more
importantly ensures that we have the support and expertise to
realise an important incremental revenue stream over a long term
period. Using 3Degrees will also ensure the process of monetising
our carbon credits will be as efficient as possible without calling
on management time."
*Source: Carbonomics
For further information, please contact:
Hydrodec Group plc
Chris Ellis, Chief Executive
Officer 01372 824 750
Canaccord Genuity
(Nominated Adviser and
Broker) Henry Fitzgerald-O'Connor
Richard Andrews 020 7523 8000
Vigo Communications
(PR adviser to Hydrodec)
Patrick d'Ancona
Chris McMahon 020 7830 9700
Notes to Editors:
Hydrodec's technology is a proven, highly efficient, oil
re-refining and chemical process initially targeted at the
multi-billion US$ market for transformer oil used by the world's
electricity industry. MarketsandMarkets forecasts that the global
transformer oil market is expected to grow from US$1.98 billion in
2015 to US$2.79 billion by 2020 at a CAGR of 7.14%. Spent oil is
currently processed at two commercial plants with distinct
competitive advantage delivered through very high recoveries
(near
100%), producing 'as new' high quality oils at competitive cost
and without environmentally harmful emissions. The process also
completely eliminates PCBs, a toxic additive banned under
international regulations.
Hydrodec's plants are located at Canton, Ohio, US and Bomen, New
South Wales, Australia.
Hydrodec's shares are listed on the AIM Market of the London
Stock Exchange. For further information, please visit
www.hydrodec.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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