Business Approach

Fully Integrated Developer

Since its inception in 1987, the Biothermica group has evolved from a technology company to a fully integrated carbon and energy project developer, managing all aspects of the development, financing and implementation of its projects. Biothermica will invest in VAM carbon and energy projects, generating revenues associated with the monetization of carbon credits and other attributes (i.e. electric power, thermal heat). Biothermica strongly believes that its proven and integrated approach, bringing together technological and financial expertise within one (1) entity, represents a significant advantage over the approach of its competitors.

This strategy enables Biothermica to fully control and ensure an optimal performance at each stage of the project, thereby maximizing the generation of revenues. The company oversees all development stages, from the design of the project to the commercialization of renewable energy and emission reduction credits.

Biothermica's business approach is based on the recurring sale of carbon credits and/or power associated with the destruction of VAM at underground coal mines worldwide.

A Flexible Business Approach

Biothermica offers a flexible range of options for mine owners to unlock and share the economic value of their VAM, including the following two (2) business models:

Joint venture (JV) : Project costs and revenues (from the sale of carbon credits and/or power) are shared between Biothermica and the mine.
Royalty based approach: No investment is required by the mine, which benefits from royalty payments.

Biothermica can also supply turn-key projects, applying either a “build and operate” model or “finance, build, own and operate” model. This business model is used in the following cases:

In jurisdictions where carbon credits cannot be generated (i.e. mines obligation to reduce or pay a tax on VAM emissions)
VAM rights are owned by another VAM project developer.

Biothermica also proposes an array of other flexible commercial approaches.

A VAM carbon project is typically implemented followings these steps:

1 - Non-Disclosure Agreement (NDA) between Biothermica and Coal Mine

This NDA agreement aims at protecting the confidentiality of technical and commercial information provided by each party, fostering a more open discussion in the assessment of project(s) opportunities.

2 - Identification of potential vent shafts(s)

The mining plan is reviewed to identify potential vent shafts (current and future) with sufficient methane concentration (i.e. >~0,4%v/v) and service life (at least ~3 years) to implement a VAM abatement project. This assessment shall also include a site visit to validate the possibility to install the RTO plant on the targeted site, considering local topography and physical constraints.

3 - Preliminary Financial Analysis

Based on the information provided by the mine (expected range of methane concentration, service life of vent shaft, etc.), Biothermica carries out a preliminary feasibility study to assess project’s profitability.

4 - Strategic Alliance Agreement with coal mine

This agreement aims at defining the scope of the project, the relationship between Biothermica and the mine, the project’s ownership, the obligations of each party and the compensation for the mine.

5 - Financing Strategy

Biothermica defines/proposes a financial structure specifically adapted and optimized for the project.

6 - Emission Reduction Purchase Agreement

Within the financing strategy, an Emission Reduction Purchase Agreement (ERPA) may be signed in advance with potential buyers to secure the selling price of all (or only a part of) future emission reductions (i.e. carbon credits) to be generated.

7 - Permits and authorizations

With the support of the mine, Biothermica secures all permits and approvals required from the authorities for the implementation of the project, including the preparation of a Mine Vent Plan Addendum to be approved by MSHA (Mine Safety and Health Administration).

8 - Financing Closing

Financing is typically closed once the ERPA has been concluded (if this strategy is retained) and all required permits/authorizations have been obtained.

9 - Project Implementation (EPCC - Engineering, Procurement, Construction & Commissioning)

Biothermica proceeds to the implementation of the VAM project (i.e. EPCC) based on its proprietary VAMOX® technology, including the detailed engineering, procurement, site preparation, construction and commissioning in accordance with an established budget and schedule.

10 - Project Registration (Listing)

Biothermica proceeds to the registration of the project for emission reduction eligibility (i.e. project’s listing).

11 - Operation and credits monitoring

Biothermica overviews the operation, maintenance and monitoring activities to ensure they are carried out in compliance with the applicable methodology (i.e. ARB’s Compliance Offset Protocol Mine Methane Capture Projects). Depending on the obligations as defined in the Strategic Alliance Agreement, some basic daily operation and maintenance activities may be carried out by mine’s staff.

12 - Verification (audit of each reporting period)

At the end of each reporting period, Biothermica leads the independent audit process for the verification and eventual issuance of emission reductions (i.e. offset carbon credits).

13 - Monetization

The issued offset carbon credits may then be sold as per the ERPA agreement (if this strategy was retained) or according to another strategy as agreed with the mine.

Integrated services – a win-win approach

Biothermica is offering all the above services with its own staff, minimizing interfaces with various stakeholders and all related risks such as construction delay, over-budget, potential litigations, underperfomance, which optimizes the Internal Rate of Return (IRR) for the all the parties.

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