todays australian, page-4

Further to yellowcake's point about combining food production and carbon credits, I've made some enquiries and learnt that that the carbon credits business is a tightly regulated industry (surprise surprise).

Any species grown for carbon credits must meet the definition of a forest and be Kyoto compliant e.g. cleared prior to 1990, be greater than 0.2 hectares, have a crown cover of 20% and a height of at least 2 metres. It is not obvious that species such as olives or sandalwood would meet the definition of a forest for this purpose.

It also turns out that rotation crops (forestry or otherwise) are of little value for carbon sequestration because the international accounting rules treat harvest as a total emission (irrespective of what the science or common sense provides for). Therefore, the revenue achieved from credits is lost when you provide for the emissions associated with harvest.

It is also important to be able to model the biomass accumulation of the forest so that investors can get some measure of the Internal Rate of Return or the Present Value of the carbon offset. Apart from the mallee eucalypt species that COZ specialises in, few Australian plants have been
measured over time with sufficient accuracy for such modelling to be of any value.

Given the recent maiden profit, first mover status in the market, strong IP position, strong business focus and reasonable share price performance during this difficult period, I continue to hold for the long term. I am also confident that management will monitor policy developments for new opportunities as they arise.

Jim.