The Clean Development Mechanism (CDM) monitored under the guidance of the UN Framework Convention on Climate Change (UNFCCC) is the procedural basis which allocates credits for reduced carbon emissions projects worldwide

Brenco will work to optimize its qualification for and management of carbon credits. Potential sources of carbon credit will include our power co-generation operations, opportunities in crop rotation, and related developments in alternative cellulosic and biomass technologies.

Under the Kyoto Protocol, developed countries have committed to reducing their emissions of carbon dioxide and will pay for effective carbon dioxide mitigation projects in developing countries through the CDM process. Although ethanol production does not presently qualify for carbon dioxide mitigation, such production can benefit from mitigation projects tied to the co-generation of electricity.

In the process of producing ethanol from sugarcane, tons of carbon dioxide are not emitted due to the use of bagasse instead of hydrocarbon fuel for power production. As with electricity co-generation, however, any carbon credit efforts we undertake will be secondary to our focus on ethanol production.