Trading Update

EcoSecurities Group plc
06 November 2007


                            EcoSecurities Group plc

                         CDM process and Trading Update


Dublin, Ireland - EcoSecurities Group plc ("EcoSecurities", or the "Company"),
one of the world's leading companies in the business of originating,
implementing and commercialising carbon credits from greenhouse gas emission
reduction projects, today gives an update on the United Nation's Clean
Development Mechanism ("CDM") project registration process and its impacts on
current trading.


In summary, the Company is reporting that, despite a background of continuing
positive developments in the carbon markets and strong Certified Emission
Reduction ("CER") prices, further delays in the CDM project cycle are limiting
the registration of projects and the issuing of CERs with the result that
revenues and earnings for the current financial year will be below the Board's
expectations.


CDM Registration and CER Issuance Process


  • While delays to the registration of CDM projects has been identified as a
    concern by EcoSecurities and many other carbon market participants for some
    time, it is now clear that the pace of progress of CDM project registration
    and CER issuance has slowed markedly over recent months.


  • Comparing the periods up to the three CDM Executive Board ("Executive
    Board" or "EB") Meetings held between February and  May 2007 (EB29 to EB31)
    with those of the four subsequent meetings held between June to October 2007
    (EB32 to EB35) shows a significant decline in the number of projects being
    registered without reviews.  Each project review needs to be considered by
    the Executive Board which means that multiple reviews can cause severe
    delays to the generation of CERs.  Of the projects considered for the first
    time in the periods leading up to the Executive Board meetings held between
    February and May 2007 (EB29 to EB31) 88% were registered and 12% were sent
    for review. This compares to only 48% registered and 51% sent for review in
    the periods to the four subsequent meetings (EB32 to EB35).  Full details
    are set out in the Appendix.



  • The pace of CER issuance by the CDM EB is also slowing markedly.  Of the
    requests for issuance considered for the first time in the periods up to the
      Executive Board meetings held between February and May 2007 (EB29 to EB31)
    95% were issued without review  compared to 64% issued in the periods to the
    four subsequent meetings (EB32 to EB35).  This slowdown applies to most
    projects, sectors and market participants.  Full details are set out in the
    Appendix.



  • The process of external validation and verification by Designated
    Operational Entities ("DOEs") has also slowed given the large volume of
    projects in the CDM pipeline and the increasing levels of CDM EB project
    reviews.



  • Since EB34, EcoSecurities has had 10 projects registered and a further 5
    projects sent for review.  Notwithstanding these delays, EcoSecurities
    continues to have the largest number of registered projects in the CDM and
    the largest portfolio of projects currently navigating the CDM process.



Portfolio Adjustments & Update



  • In light of these circumstances, and in line with the Group's policy of
    continually assessing its CDM project portfolio taking into account the CDM
    process as well as the inherent difficulties of developing projects in
    emerging markets, the portfolio gross contract volume was adjusted to 142
    million CERs at 31 October 2007 from 185 million CERs at 5 September 2007.



  • On a net entitlement basis, allowing for contract type, the CER portfolio
    to 2012 was adjusted to 130 million tonnes at 31 October 2007, from 163
    million tonnes at 5 September 2007.  The average cost of the CERs in the
    portfolio is currently Euro 6.49 compared to Euro 6.76 at 5 September 2007.



  • It is important to note that adjustments due to delays in CDM
    registration, in cases where the projects are already operating, can result
    in Verified Emission Reductions ("VERs") being produced and subsequently
    sold into the voluntary market. We have been both acquiring and selling VERs
    to corporate customers.  Projects delayed or removed from the CDM portfolio
    may continue to be eligible for the voluntary market. They may also be used
    for future compliance driven emission reduction markets including the US and
    elsewhere.  At present EcoSecurities has 158 operational projects generating
    emissions reductions.



  • The status of EcoSecurities projects in the CDM process is as follows; at
    31 October 2007 of 402 contracted projects (5 September 2007: 456); 223 PDDs
    were completed (5 September 2007: 222); 220 projects had been submitted to
    validation (5 September 2007: 215); 104 had completed the validation process
    (5 September 2007: 102); 89 were registered with the CDM Executive Board (5
    September 2007: 74); and 158 were operational (5 September 2007: 145).



  • The gross volume contracted post-2012 was adjusted to 92 million CERs at
    31 October 2007 from 110 million at 5 September 2007. The post-2012 CDM
    portfolio volume relates to potential production of CERs from the Group's
    projects after 2012 and is incremental to the pre 2012 CDM portfolio.


  • The Group has built its global VER portfolio to 5.2 million tonnes at 31
    October 2007 from 4.3 million tonnes at 5 September 2007, further adding to
    its carbon credit volumes.


(S)         The Group's combined carbon credit portfolio now stands at 239 million tonnes gross.

Commercialisation Update


  • 35.5 million CERs had been sold forward at 31 October 2007, representing
    expected total forward CER revenue of Euro 440 million and net trading
    margin of Euro 202 million through to 2013.


  • Under these forward sales agreements, EcoSecurities has contractual
    obligations to deliver 28.7 million CERs from 2008 to mid 2013 of which 3.3
    million CERs must be delivered in 2008. The current CER inventory is 0.5
    million CERs.



  • EcoSecurities' CDM project portfolio is expected to generate 142 million
    CERs, prior to risk adjustments, through to 2012 which will be used to meet
    forward sales obligations.



Financial Update



  • Given the delays in the CDM EB process, we anticipate that a total volume
    of 1 million CERs initially expected to be verified and/or issued in the
    second half of 2007 are likely to be delayed to 2008 with a consequent
    effect on 2007 revenues and overall outturn.  Group operating expenses are
    in line with expectations.



  • The Group's cash balance as of 31 October 2007 was approximately Euro 109
    million and the Group had no debt.



Outlook



  • As a counterbalance to the challenges in the CDM process, EcoSecurities is
    focusing on its core expertise of maximizing the carbon value of its
    portfolio through a number of means:

•         Maximizing the value of our emissions reductions project portfolio by
exploring markets where offsets can be sold outside the CDM process, such as the
USA.  VER market demand this year has been robust and the conversion of pre-CDM
registration projects to this market has been successful.  The World Bank
estimates VER market demand could grow to 250 million tonnes annually in 2011;

•         Prioritizing project submissions to focus on the most valuable
projects;

•         Expressing our concerns via key national governments, industry forums
and at the forthcoming COP/MOP in Bali, Indonesia.



-         Despite delays in the CDM process we continue to originate emission
reduction projects.  In addition we will continue our expansion in the US and
other voluntary carbon markets and direct investment in clean energy projects.



-         We continue to have a strong pipeline of projects through our own
international network and increasingly in conjunction with Credit Suisse.
Currently the contracted projects undergoing internal due diligence, and
therefore not included in the Group's CDM portfolio, amount to 10 million CERs
through to 2012.



-         Efforts to extend and expand the geographical coverage and timeframe
of emission trading regulations continue to accelerate.  The Kyoto signatory
countries are working towards an agenda to agree the parameters of a post 2012
regime by late 2009.   The annual COP/MOP is taking place in Bali in early
December and further clarity on future CDM targets and the role of forestry is
expected from these meetings.  In the US, the McCain-Lieberman Climate
Stewardship Act and other climate change legislation gather momentum in
Congress, while 2008 US Presidential candidates from both parties have emission
reduction platforms.  These initiatives should provide EcoSecurities with
attractive, long term opportunities.



Bruce Usher, CEO, said: "It is now clear from recent EB meeting data that the
CDM registration and issuance process has slowed significantly.  This trend is
disappointing for the entire carbon market and is restricting CER issuance and
our short term revenues.  We are seeking to mitigate the impact of these delays
wherever possible by, for example, selling pre-registration credits into the VER
market."



"While we are disappointed with the delays in the process of creating and
delivering CERs, we remain fully confident in the emissions reductions market
and that more efficient mechanisms will be established and grow beyond current
constraints and transaction volumes."



APPENDIX


The period during which these projects had made requests for registration or
issuance of CERs and were considered at the referenced EB Meetings is referred
to as the catchment period.   This period normally extends from two weeks before
the previous EB meeting up until two weeks before the meeting at which the
project is considered, but varies depending on the caseload for the upcoming EB
meeting.  Note that for the catchment periods for both EB29 and EB30 a proxy had
to be used as information about requests for review for this period is not
available on the UNFCCC website. The start of the catchment period for EB29 is
assumed to be the earliest date that a project reviewed at EB29 could have been
registered. This date is estimated from the registration request form for the
projects. The same rationale is applied to EB30. The catchment period for EB30
finishes the day before the first request for review is sent to EB31 for
consideration.


The periods used are detailed below:

For requests for reviews considered at EB 29       24 September 06  - 19 November 06

For requests for reviews considered at EB30        20 November 06 - 12 February 07

For requests for reviews considered at EB31        13 February 07 - 16 April 07

For requests for reviews considered at EB32        17 April 07- 21 May 07

For requests for reviews considered at EB33        22 May 07 - 26 June 07

For requests for reviews considered at EB34        27 June 07- 16 August 07

For requests for reviews considered at EB35        17 August 07 - 17 September 07


CDM Project First Time               EB29        EB30        EB31        EB32        EB33        EB34        EB35
Registration
EB Meeting Dates                    15-16       21-23         2-4       20-22       25-27       12-14       15-19
                                   Feb-07      Mar-07      May-07      Jun-07      Jul-07      Sep-07      Oct-07
                                                           
Projects Registered during             92          75         117          33          33          31          16
catchment period (considers
first-time projects only and
excludes those registered
after a review)

Project registration requests          15           7          16          25          25          46          22
with reviews requested during
catchment period

% Registered                          86%         92%         88%         57%         57%         40%         42%

% Request for Review                  14%          8%         12%         43%         43%         60%         58%




CDM CER Issuance                     EB29        EB30        EB31        EB32        EB33        EB34        EB35
EB Meeting Dates                    15-16       21-23         2-4       20-22       25-27       12-14       15-19
                                   Feb-07      Mar-07      May-07      Jun-07      Jul-07      Sep-07      Oct-07
                                                           
Project issued with CERs               19          63          63          13          32          37          14
during catchment period
(considers first-time
projects only and excludes
those issued after a review)
Projects issuance requests              3           3           1           9          12          19          16
with a review requested
during catchment period

% Issued                              86%         95%         98%         59%         73%         66%         47%
% Request for Review                  14%          5%          2%         41%         27%         34%         53%



For further information please contact:

EcoSecurities Group plc
Bruce Usher, CEO                                            [phone]
Pedro Moura Costa, President                                [phone]

Citigate Dewe Rogerson                                      [phone]
Kevin Smith / Ged Brumby

Notes to Editors


CDM = Clean Development Mechanism, the provision of the Kyoto Protocol that
governs project level carbon credit transactions between developed and
developing countries



CER = Certified Emission Reduction, carbon credits created by Clean Development
Mechanism projects.  One CER corresponds to 1 tonne of CO2e emission reductions


EcoSecurities is one of the world's leading companies in the business of
originating, developing and trading carbon credits. EcoSecurities structures and
guides greenhouse gas emission reduction projects through the Kyoto Protocol,
working with both project developers and buyers of carbon credits.



EcoSecurities works with companies in developing and industrialising countries
to create carbon credits from projects that reduce emissions of greenhouse
gases. EcoSecurities has experience with projects in the areas of renewable
energy, agriculture and urban waste management, industrial efficiency, and
forestry. With a network of offices and representatives in 36 countries on five
continents, EcoSecurities has amassed one of the industry's largest and most
diversified portfolios of carbon projects.



EcoSecurities also works with companies in the developed world to assist them in
meeting their greenhouse gas emission compliance targets. Utilising its highly
diversified carbon credit portfolio, EcoSecurities is able to structure carbon
credit transactions to fit compliance buyers' needs, and has executed
transactions with both private and public sector buyers in Europe, North America
and Japan.



Working at the forefront of carbon market development, EcoSecurities has been
involved in the development of many of the global carbon market's most important
milestones, including developing the world's first CDM project to be registered
under the Kyoto Protocol. EcoSecurities' consultancy division has been at the
forefront of significant policy and scientific developments in this field.
EcoSecurities has been recognised as the world's leading greenhouse gas advisory
firm over the last five years by reader surveys conducted by Environmental
Finance Magazine.


EcoSecurities Group plc is listed on the London Stock Exchange AIM (ticker ECO).


Additional information is available at www.EcoSecurities.com.


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