AGM Statement

RNS Number : 1844S

Camco International Ltd

16 November 2011

 



AGM Statement

Camco International Limited ('Camco', AIM: CAO), a global developer of emission reductions and clean energy projects, will make the following statement at its AGM today, covering relevant developments in the global macro-regulatory environment and its recent operations.

Regulatory Progress and Continued Delivery

Regulatory highlights

There have been significant regulatory advances in a number of regions in the last quarter that will act as key drivers in the emission reduction and clean energy markets, in which Camco is active, over the course of the next few years, these include:

·      The Australian Senate passed on November 8^th 2011 a clean energy bill establishing an A$23 (€17) carbon price from mid-2012 and floating price Emissions Trading Scheme (ETS) from mid-2015. Up to 50% of emissions may be covered through purchase of international offsets.

·      California has progressed towards its cap-and-trade scheme following the Air Resources Board approval on October 20^th 2011 of its final regulations for the scheme to start in 2013.  Indicative broker offer prices are up to USD $13.00 (€9.66) from USD$11.75 (€8.73) in July 2011.

·      Quebec adopted on July 7^th 2011 draft cap-and-trade regulations with compliance commencing 2013. Other Canadian provinces and US states are set to follow under the Western Climate Initiative, a growing collaboration between jurisdictions to jointly reduce emissions.

·         China State Council approved on November 9^th 2011 its 12^th 5-year plan targets to reduce energy intensity 16% and carbon intensity 17% by 2015, and increase non-fossil fuel primary energy consumption from 10% to 15% by 2020. As part of this, China is piloting four city and two provincial carbon ETS's in 2013, towards the establishment of nationwide cap-and-trade scheme in 2015.

·         EU Heads of State endorsed on 23^rd October 2011 the EU position for COP17 in Durban in December 2011. The EU has stressed a desire for a comprehensive global legally binding framework with a clear timeline. The extension of the Kyoto Protocol to a second commitment period and corresponding treaties covering additional countries are seen as a possible means towards this.

 Operational highlights

·      Camco's post-2012 in specie portfolio has grown to 45.9 million tonnes as at 31 October 2011

·      Strong delivery of 1.5 million tonnes from our pre-2012 in specie portfolio since half year.

·      Construction of the company's dairy biogas project in North America is ahead of schedule for completion early 2012.

·      Our Camco South East Asia joint venture signed Carbon Development Contracts (CDCs) totalling 2.8 million tonnes since half year.

Scott McGregor, Camco Chief Executive Officer, said: 

"We have built on our performance in the first half of the year by progressing our project development business and continuing to expand our post-2012 carbon portfolio. Whilst the current carbon price in the EU is undoubtedly depressed, we believe the recent regulatory advances globally point to a far more favourable future for the market in the medium to long-term.

We see our focussed strategy over the past two years of servicing our clients within an integrated market for carbon and clean energy in Asia and North America as being validated by recent regulatory developments."

Business Review

Carbon Project Development

Despite the current low carbon price, Camco remains confident of the longer-term potential of carbon markets with much regulatory progress in the period towards trading schemes in new regions set to increase overall demand. Furthermore, the EU has pledged to improve the efficiency and economic effectiveness of its own ETS in the future. The entrance of new sectors, such as aviation in 2012, should help to stimulate this, together with the need for buyers to address their forthcoming tighter Phase 3 commitments.

Since Camco is only involved in projects that deliver "green" credits, eligible for Phase 3, and with 11.2 million tonnes of its pre-2012 portfolio scheduled to issue in 2013, the company is well placed to take advantage of higher forward prices. It also continues to benefit from having certain projects for pre-2012 volumes delivery with locked in contracts, whilst most of its post-2012 arrangements are designed to deliver value even in adverse pricing conditions.

In North America, under the Climate Action Reserve (CAR) scheme, a national offset programme in which prices have recently increased, Camco has 2.0 million tonnes of emissions reductions under contract. Camco has seven projects registered with the CAR, predicted to deliver over 1.0 million tonnes, and another four projects on track for registration by the end of 2011.

Our South East Asian joint venture signed new CDCs expected to deliver 2.8 million tonnes in Indonesia, Vietnam and Thailand, providing a strong basis for growth in the region since half year.

Camco is actively developing project opportunities under the new Australian scheme, based around the Australian regulated domestic offset project market.

Clean Energy Project Development and Investment

Camco's Clean Energy project operations in North America and Asia continue to develop.

In North America Camco has focused on the agricultural sector and is mid-construction with a 4.5MW biogas installation, the largest of its kind, is well ahead of schedule and on budget for completion in early 2012. This will convert the manure of over 10,000 cows into 39.4 GWh of generation. The project is wholly owned by Camco and operated by AgPower LLC.

Further, Camco announced earlier this year it was awarded a share of a $1.5 million grant, with its partners, from the US Department of Agriculture to develop a program to improve nitrogen management practices on farms and reduce N₂O emissions, a potent greenhouse gas.

In China, Camco is pursuing projects within the remit of the China 5-year plan energy efficiency and emission reduction targets

Energy and Carbon Advisory

The UK Government's newly released CRC league table shows Camco clients averaging in the top quartile and a recent Verdantix report has identified Camco as one of the top six companies offering sustainability consulting.

Camco's Africa consulting business has been increasingly servicing REDD+ projects and clean energy projects in a region where significant capital is focussed on project investment, winning contracts worth USD 1.8 million in revenue over the next three years.

Outlook

Camco's three business segments have all made further progress this year during difficult economic times.

The Advisory business retains a strong order book and is expected to continue its expansion in the UK and Africa.

The Carbon business is transitioning into delivery phase whilst continuing to complete more projects and increase its portfolio. Although the decrease in carbon price may lead to downward revisions to income accrued for prior periods, the outlook in the medium to long-term for the business remains positive. The protection afforded by certain locked in contracts, the ability to deliver credits into Phase 3 of the ETS and the structure of the post-2012 portfolio should reduce the business's exposure to short-term carbon price volatility.

Promising regulatory developments make the longer term prospects of the carbon price much brighter. Further,  growth in the clean energy project business throughout Asia and North America reduces the company's dependency on carbon prices in the longer term.

Enquiries:

Camco	[phone]
Scott McGregor, Chief Executive Officer
Shirona Partem, Investor Relations
Singer Capital Markets (Camco Nominated Adviser and Broker)	[phone]
Jonathan Marren

Citigate Dewe Rogerson                                                                          [phone]

Chris Gardner / Alistair Kellie / Malcolm Robertson        

Notes to editors:

About Camco

Camco International Limited (Camco, AIM: CAO) is a global developer of clean energy solutions and projects to reduce greenhouse gas emissions with operations in the US, the UK, China, Africa, Russia and SEA.

Camco has a 20-year track record in project development, technical delivery and policy development, working with local industry, multinational companies, governments and regulatory bodies.

The Carbon Project Development business has created one of the largest emission reductions portfolios and has structured ground breaking and innovative arrangements for the sale and delivery of emission reductions to compliance and voluntary buyers.

Camco's Clean Energy Project Development and Investment teams collaborate with industry, project developers, equipment providers and investor groups to create emissions-to-energy projects and maximise sustainable energy production across a range of industries; including agricultural methane, industrial energy efficiency, coal mine methane, municipal solid waste, biomass and landfill gas.

The Energy and Carbon Advisory teams provide strategic, commercial and technical expertise accrued over two decades to deliver low carbon energy and sustainable development solutions.

www.camcoglobal.com

 

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