PRODUCTION OF BIOMASS

Through the harvesting of our forests, we anticipate amassing large volumes of biomass grade timber (tree tops and branches), which is not suitable for timber production. This biomass is chipped?and the larger-sized logs are graded for sawn timber production.

To avoid shipping large amounts of cellulose wood chips around the world to power utilities, paper producer’s and chipboard manufacturers, we plan to eventually build our own power generation facilities on site.

After all, transporting low-grade low-value chips overseas will generate no real income and will only make shipping companies wealthy. The power utilities are fuelled with our own wood chips and sawmill waste to produce electrical energy, which we will sell directly to local power companies, on contract.

-The biomass is burnt primarily to produce steam, which drives a turbine to produce 30% electrical energy efficiency.

-The heat produced is then recycled and recovered in a cogeneration plant to obtain up to 45% of electrical energy.

-The remaining waste heat can then be used in our other production facilities to dry timber and heat water, and thus optimize efficiency.

-By burning wood instead of fossil fuels to produce the energy we are carbon neutral, therefore?we create zero impact on the environment.

-Contributing to the reduction of CO2 generates CER credits under the Kyoto protocol mechanism. These credits are

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valuable commodities which we trade on the international carbon markets. In addition to the power sold, we anticipate that eventually, we could produce sufficient electrical energy to power all of our own on site operations, making us totally self-sufficient and energy effective.

Whenever possible we also build and operate “Run of the river” hydro power which relies on the natural flow of a waterway and involves placing small, mini, or micro hydro turbines into running waterways and is achieved without the construction of large dams. Run of river hydro usually involves a low-level diversion weir or a streambed intake and is usually located on a fast flowing, non-seasonal stream or river. This form of hydro power generation has the zero impact on the environment. Hydro power turbine generators are very efficient when compared to wind turbine generators and solar panels.

Biomass Process
Amazonas Biomass is used to create energy through a process called gasification. Gasification is the breaking down of carbon-based materials by applying extreme temperatures in an oxygen-starved environment to create a high-energy gas. The high temperatures and limited oxygen radically reduce harmful emissions compared to either incineration or landfills. It works much like covering a candle with a jar, without oxygen, the material can’t burn.

Gasification has been used as a more efficient and cleaner method than traditional “burn” or combustion processes to generate energy for over a century.
The primary output from gasification is a clean synthetic gas called “syngas,” similar in properties to natural gas or propane. Syngas has many commercial uses including electricity generation, biofuels production and powering hydrogen fuel cells.

In addition, gasification has other advantages over burning:
-Greater reduction of waste volume: 90-95% reduction vs 60-70% reduction
-Higher energy efficiency
-More effectively detoxifies hazardous materials
-A sustainability process ensures that the absolute minimal amounts of Emissions are created from the entire gasification process.

The production of Amazonas biomass is part of a sustainable process to maximize efficiencies and minimize any waste and emissions.

Sustainability Process
I.
a. Remaining flue gases are captured and sent to a plasma arc to heat a boiler where hot water is sent throughout the community providing perpetual hot water.
b. Any remaining CO2 is sent to algae ponds to feed algae that produce bio-diesel.
c. Hot and cold water is sent throughout the community. This water is captured in sewage containment where the solids and liquids are separated.

II.
a. Solid waste is sent to an aerobic digester for methane gas production.
b. This gas is captured for additional feedstock in energy production.
c. The excess solids are taken out and dried before being sent to the gasifier for syngas production.

III.
a. Liquids are processed to clear remaining impurities and sent to algae ponds to feed algae in biodiesel production.
b. Water is stiffened from the algae ponds to feed hydroponic food production where 3 acres can produce enough food to feed 10,000 people.

Amazonas Forestry and Timber Extraction Operations

Amazonas Florestal owns Title for a property denominated Fazenda Jatuarana. This property contains some 36,481hectares or 90,146 acres of rainforest land located in the southern part of the State of Amazonas in Brazil and was appraised in 2011 by EB da Amazonia, a real estate appraisal company that has been credentialed through Banco do Brazil, at a fair market value of more than 77 MM BR Reais or approximately US$46 MM. Along with and completely independent of Fazenda Jatuarana, Amazonas Florestal has also acquired two fully approved forest management projects and their associated permits and licenses. Through these licenses, AMZO is authorized to harvest approximately 14,000 cubic meters of timber. The Company’s forest property and assigned and approved to extract forest land, have been recently audited by a P.C.A.O.B. (Public Company Accounting Oversight Board) certified accounting firm as collateral to fund Amazonas Florestal’s capital requirements needed to develop the properties and bring them into a profitable commercial status. 

The wood products Amazonas Florestal exports require specific governmental approval. Amazonas Florestal maintains the necessary governmental permits for importing and exporting and meet any safety standards set. Yearly licenses and permits are required.

High rates of deforestation in the Brazilian Amazon are the focus of both national and international concern. The Brazilian government heavily regulates the Timber Industry to make sure that all forest management practices are conducted in a sustainable and environmentally friendly way. In the State of Amazonas specifically, the regulatory environmental protection agency is known as IPAAM, or Instituto de Protecao Ambiental do Amazonia, has been granted ample powers by IBAMA, the Federal Environmental Agency to regulate, approve and enforce Sustainable Forest Management Projects. These regulations are so specific that an inventory of the forest resource is taken whereby 100% of the trees existing on a particular property is inventoried and cataloged by species, diametric size, and age.

Each of the harvestable trees found to be more than 60 cm at chest height and in the species of commercial value is tagged using aluminum tags and numbered according to the complete catalog tally. Engineers then come in to determine the environmental impact of felling those trees and the direction that each should be filled in order to minimize the damage to its surroundings and considering potential erosion once that tree is removed. No trees are felled within 50 meters of any stream, lake or river to protect the natural erosion of its bank.

A forest engineer is responsible for laying out an extraction program breaking down the property into 50 x 50-meter sectors and indicating the paths where equipment can be introduced and roads built when needed. Once the project is formulated it goes to IPAAM for approval. An LO – Licencia Operativa, Operating License, is issued and accompanied by an ACOF- Harvest Authorization. Once approved the amounts shown on these approval documents are entered in exact m3 quantities per species and are allocated to the project owners in the IBAMA DOF system.

This federal control and regulative system not only fulfills verification that the timber extracted from each project is of legal origin but controls the transportation 100% from standing tree to finished product shipped locally or exported. This is achieved by the various steps in the system where an original DOF and Invoice need to accompany a log shipment from the project to the mill and contain information on the shipping method, whether by land or water with the license information for the shipper (truck tag, badge number, tugboat registry) Another DOF control the product while shipped from the mill or manufacturing industry anywhere else.

Once brought to market, if done so internally in the Brazilian domestic market, the seller has to show a DOF number on each invoice and send a copy to IBAMA to have that amount removed from the system. In order to export IBAMA reviews the DOF and inspects the product upon shipment at the port of discharge.

These government agencies have the power to immediately halt any and all operations should any impromptu inspection reveal even the slightest discrepancy in size, quantities, species or environmental practices. Furthermore, continued Domestic and International pressure to protect the Amazonian rainforest can lead to more stringent regulations or even the complete banning of all Timber operations in this region.

AMAZONAS FLORESTAL FOREST LAND: Fazenda Jatuarana 

The Company primary land holdings are called Fazenda Jatuarana, which is located 389_kilometers from the city of Manaus, Brazil in the State of Amazonas. On December 14th, 2010, the Company commenced development of carbon studies on the land. This Fazenda Jatuarana represents 90,108 acres and has been recently appraised by EB da Amazonia, a certified appraisal company that specializes in the valuation of rural forest properties in Northern Brazil. The land was valued at BRL $ 77 Million which, at the time of the appraisal, was based on the concurrent exchange rate, equivalent to approximately USD$ 44 Million. The appraisal methods used were in line with acceptable GAAP principles to determine the actual fair market value of the land and the netback to stumpage methods widely acceptable to calculate the net value of a forest resource.

Lago Preto Dos Ramos I Lago Preto I has 979.12 hectares with an approved license for the extraction of 10,086.548 cubic meters of various species of semi-hard and hardwoods of commercial demand, both in the region and worldwide. Through the Operation License number 371/10, as authorized by IPAAM (Instituto de Protecao Ambiental de Amazonas).

Lago Preto Dos Ramos –II

Lago Preto II has 1,351.79 hectares and contains 4,701.947 cubic meters of timber authorized for extraction through the IPAAM license number 538/10.

The Forest Engineer who managed the studies for the Company was the Company retained Ricardo Ludke, who was responsible for all of the technical and management aspects of the projects. Mr. Ludke’s responsibility, working closely with IPAAM- Instituto de Proteccao Ambiental da Amazonas, the State of Amazonas, (the government agency that regulates and controls all such sustainable projects in the state), together with IBAMA, (the Brazilian EPA, in the approval and enforcement of all laws that govern such projects in Brazil), is to ensure that all of the filling and extraction is done in compliance with the low impact logging criteria that is described and as specified on the project literature as conditional for its approval by IPAAM. Mr. Ludke has a thorough background in the management of

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such projects have worked with several dozen such projects in the past with IBAMA in congruence with such platforms at a government level.

Additional Forestry Properties

The company has options to purchase another 303,000 hectares of virgin rainforest and from related parties to management and another 203,000 hectares from business associates of management and their families in Brazil.

CARBON CREDITS:

A carbon offset is a reduction in emissions of carbon dioxide or greenhouse gases made in order to compensate for or to offset an emission made elsewhere.

Carbon offsets are measured in metric tons of carbon dioxide-equivalent (CO2e) and may represent six primary categories of greenhouse gases.[5] The categories include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), and sulfur hexafluoride (SF6).[6] One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gases.

In the compliance market, companies, governments, or other entities buy carbon offsets in order to comply with caps on the total amount of carbon dioxide they are allowed to emit. This market exists in order to achieve compliance with obligations of Annex 1 Parties under the Kyoto Protocol, and of liable entities under the EU Emissions Trading Scheme. In 2006, about $5.5 billion of carbon offsets were purchased in the compliance market, representing about 1.6 billion metric tons of CO2e reductions.

In 2009, 8.2 billion metric tons of carbon dioxide equivalent changed hands worldwide, up 68% from 2008. The World Bank puts the overall value of the market at $144 billion.

The global carbon market is dominated by the European Union, where companies that emit greenhouse gases are required to cut their emissions or buy pollution allowances or carbon credits from the market, under the European Union Emission Trading Scheme. Europe, which has seen volatile carbon prices due to fluctuations in energy prices and supply and demand, will continue to dominate the global carbon market for another few years, as the U.S. and China—the world’s top polluters—have yet to establish mandatory emission-reduction policies.

Land use, land-use change, and forestry (LULUCF) projects focus on natural carbon sinks such as forests and soil. Deforestation, particularly in Brazil, Indonesia and parts of Africa, accounts for about 20% of greenhouse gas emissions. Deforestation can be avoided either by paying directly for forest preservation or by using offset funds to provide substitutes for forest-based products. There is a class of mechanisms referred to as REDD schemes (Reducing emissions from deforestation and forest degradation), which may be included in a post-Kyoto agreement. REDD credits provide carbon offsets for the protection of forests and provide a possible mechanism to allow funding from developed nations to assist in the protection of native forests in developing nations.

Preservation of the Brazilian Rainforest

The Brazilian Amazon represents over half of the planet’s remaining rainforests, and it comprises the largest and most species-rich tract of tropical rainforest in the world. Amazonas Florestal is committed to the sustainable and environmentally responsible management of these forests. Amazonas Florestal’s sustainable forest management strategy, with its selective method of harvesting timber for the production and commercialization of wood products, addresses deforestation, which is one of the primary causes of global warming. Additionally, Amazonas Florestal’s strategy rehabilitates ecosystems through habitat and water resource preservation. Amazonas Florestal intends to preserve these properties through UN REDD (Reducing Emissions from Deforestation & Forest Degradation) incentive programs, while selectively harvesting their resources through sustainable “Green” government approved forest management projects. Towards this end, Amazonas Florestal has entered into a strategic relationship with Carbon Forest Group, a financial management Company that is charged with the development and monetization of Carbon Credits through Sustainable Forest Management (SFM), Agro Forestry and or R.E.D.D.

Brazil has a land area of 846 million hectares and an estimated population in 2010 of 195 million people (United Nations Population Division 2010); the country is ranked 75th out of 182 countries in UNDP’s Human Development Index (UNDP 2009). Ninety-three per cent of the country is below 800 m in altitude. The highest peaks, at about 2500 m, are found on the northern border with Venezuela and in the southeast on the Atlantic coast. The vast Amazon Basin contains the world’s largest area of tropical rainforest; the majority of it is Brazilian territory. FAO (2010a) and Government of Brazil (2010) both estimated Brazil’s total forest cover in 2010 at 519 million hectares, including both tropical and non-tropical natural and planted forests; an estimated 354 million hectares of the total was in the Amazon.

More on the Brazilian Rainforests:

Brazilian Rainforests

Types of Brazilian Rainforests

Permanent Forest Estate

Deforestation and Forest Degradation

Status of Brazilian Tropical Rainforest in 2011

Vulnerability of Forests to Climate Change

Sustainable Forest Management Policy Framework

Brazilian Rainforest Policy and Legislation

Institutions Involved in Rainforest Management

Status of Rainforest Management

Silviculture and Species Selection

Planted Forest and Trees Outside the Forest

Brazilian Rainforest – Forest Certification

Estimate of Sustainably Managed Forests

Timber Production and Trade

Non-Timber Forest Products

Brazilian Rainforest – Forest Carbon

Brazilian Rainforest – Forest Protection