Trading Update

EcoSecurities Group plc 19 January 2007 EcoSecurities Group plc Trading Update EcoSecurities increases portfolio to 156 million Carbon Credits EcoSecurities Group plc (the "Group" or "EcoSecurities"), one of the world's leading companies in the business of originating, implementing and commercialising carbon credits from greenhouse gas emission reduction projects, today issues a trading update for the six month period ended 31 December 2006. Origination The Group continued its strong project origination performance during the period, with projects and tonnage added ahead of expectations. The total gross Certified Emission Reduction ("CER") portfolio grew by 26 million tonnes to 156 million CERs at 31 December 2006. In line with the Group's policy of continually assessing the projects within the portfolio for expected operating and regulatory performance, this total takes into account volume adjustments principally relating to several biodiesel projects in Indonesia. The total number of projects with which the Company has contracted grew to 353. In addition, the Group has a further 21 million CERs from projects that had yet to complete the full contracting and due diligence process at year end and which have not yet been added to the portfolio. Adjusting for the relative proportions of Agency, Principal and Project Development contracts in the gross portfolio, the Group's net ownership position totals 127 million CERs at 31 December 2006. The Group's net ownership expanded by a considerable amount during the period, primarily due to the restructuring of its EcoMethane joint venture whereby the Group will now acquire all the CERs generated from these landfill gas projects. Other highlights of the Group's origination activities included continued geographic expansion with the opening of additional representative offices in Kenya and Singapore, bringing the total number of offices and representative offices to 23 at year end (2005: 14). EcoSecurities also signed strategic agreements with Standard Bank, the largest retail bank in South Africa, and UOB Kay Hian, a division of the second largest bank in Singapore, to maximise business development activities in Africa and Southeast Asia, respectively. Implementation Implementation of the Group's contracted projects - the process of guiding Clean Development Mechanism ("CDM") projects through the United Nations registration process - made further progress in the second half of 2006. Notwithstanding the well publicised delays experienced in external validation and verification of projects and with the CDM Executive Board ("EB") in the processing of projects, the pace of registrations increased in the latter part of 2006. The number of projects registered with the EB by the Group increased from 17 at 30 June 2006 to 53 at the end of December 2006. These registered projects are expected to produce 16 million CERs through to 2012. A total of 84 projects in EcoSecurities portfolio are now operating, and are expected to produce 39 million CERs through to 2012. Commercialisation The Group executed a number of new sales transactions in the second half of 2006 with counterparties in Europe and Japan, significantly increasing the amount of contracted forward sales over the 2008 to 2012 period. The total gross contract volume of CERs sold forward during the period was 8 million tonnes, increasing the total forward sale contract volume to 29 million tonnes. The total Net Trading Margin on contracted forward sales at 31 December 2006 increased to €151 million, up from €100 million as at 30 June 2006. For the year ended 31 December 2006 the Group will recognise revenue from the sale of verified CERs from a number of Principal, Agency and Project Development projects. A total gross number of 451,442 CERs were verified in relation to the Group's projects during the year. At year end 67,954 of these CERs had not yet been sold. Operations and Finance Despite significant expansion in 2006, costs were within expectations. Furthermore, the Group's cash position at year end was larger than anticipated, placing EcoSecurities in a comfortable position going into 2007. Bruce Usher, Chief Executive Officer, commented: "Throughout 2006 the Group placed significant emphasis on building its carbon credit portfolio, which grew to a gross total of 156 million CERs and a net total of 127 million CERs at the end of 2006. Despite experiencing the industry-wide delays in the processing of our projects by the CDM Executive Board, we have continued to progress a significant number of projects through the CDM process. "During 2006, there have been many developments raising not only the awareness of climate change, but also examining the likely economic impacts. In particular the publication of the Stern Report in the UK has helped focus attention on this ongoing problem and need for emissions trading and project offsets. In addition, tighter EU emissions targets brought about by recent EU ETS National Allocation Plans and accelerating policy momentum in the United States, especially in California, will contribute to further development of the global carbon market and provide additional opportunities for EcoSecurities in 2007." + Note: Gross and net contract volume measures expected CER production from projects through to the end of 2012 and does not adjust for operating or regulatory risk. Gross and net contract volume excludes projects where the probability of either the development of a relevant methodology or the underlying development of the project is still uncertain. CDM = Clean Development Mechanism, the provision of the Kyoto Protocol that governs project level carbon credit transactions between developed and developing countries CER = Certified Emission Reduction, carbon credits created by Clean Development Mechanism projects. One CER corresponds to 1 tonne of CO2e emission reductions EU ETS = European Union Emissions Trading Scheme, a market based "cap and trade" system for green house gases adopted by the European Union member states - Ends - For further information please contact: EcoSecurities Group plc + 353 (0) 1613 9814 Bruce Usher, CEO Pedro Moura Costa, President & COO Citigate Dewe Rogerson + 44 (0) 20 7638 9571 Kevin Smith / Ged Brumby About EcoSecurities: EcoSecurities is one of the world's leading companies in the business of originating, implementing and commercialising carbon credits. EcoSecurities structures and guides greenhouse gas emission reduction projects through the Kyoto Protocol, acting as a principal between the projects and the buyers of carbon credits. EcoSecurities works with companies in developing and industrialising countries to create carbon credits from projects that reduce emissions of greenhouse gases. EcoSecurities has experience with projects in the areas of renewable energy, agriculture and urban waste management, industrial efficiency, and forestry. With a network of offices and representatives in 21 countries on five continents, EcoSecurities has amassed one of the industry's largest and most diversified portfolios of carbon projects. Today, the company is working on 353 projects in 36 countries using 17 different technologies, with the potential to generate more than 156 million carbon credits. EcoSecurities also works with companies in the developed world to assist them in meeting their greenhouse gas emission compliance targets. Utilising its highly diversified carbon credit portfolio, EcoSecurities is able to structure carbon credit transactions to fit compliance buyer's needs, and has executed transactions with both private and public sector buyers in Europe, North America and Japan. Working at the forefront of carbon market development, EcoSecurities has been involved in the development of many of the global carbon market's most important milestones, including developing the world's first CDM project to be registered under the Kyoto Protocol. In 2006, EcoSecurities won the Point Carbon Award for 'Best CDM/JI Project Developer'. EcoSecurities' consultancy division has been at the forefront of all the significant policy and scientific developments in this field, and has been voted the world's leading greenhouse gas advisory firm over the last five years through reader surveys conducted by Environmental Finance Magazine. EcoSecurities Group plc is listed on the London Stock Exchange AIM (ticker ECO.L). Additional information is available at www.ecosecurities.com. This information is provided by RNS The company news service from the London Stock Exchange
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