Flax Project Sask Association

CLIMATE CHANGE SOLUTIONS

1 MILLION TONNES CO2 ANNUALLY CARBON NEUTRAL OR WASTED ENERGY 5 BILLION KW PER YEAR

LARGE CO2 EMITTERS

ENVIRONMENTAL IMPACT OF BURNING FLAX STUBBLE IN THE FIELDS 1 – carbon molecule (atomic wt. 12) 2 – oxygen molecules (atomic wt. 16) 12 + (16x2) = 44 12 kg of carbon combusted = 44 kg CO2 1 kg carbon combusted = 3.67 kg CO2 Flax = 48.2% carbon (1.77 kg CO2 emitted per Kg flax stubble burned in the fields) Saskatchewan: 800,000 acres planted 80% burned in field = 640,000 x .65 (tonnes stubble/acre) = 416,000 416,000 tonnes x 48.2% x 3.67 = 735,879 tonnes CO2 735,879 x $50 carbon rate (Federal) = $36,794,000

Carbon Pollution cost $88.45/tonne

Burning flax stubble in the fields is a waste of a clean energy resource!

PRICING CARBON POLLUTION CREATES NEW GREEN MARKETS! Eco-Growth Environmental proposes new biomass upgrading facility for flax and hemp stubble.

Phase 1 plant calls for an annual capacity of 150,000 metric tonnes of stubble to be upgraded to high calorific biomass to replace fossil fuels and compliment biomass hog fuels used currently in electrical generating plant in Kamloops B.C. The $10 million upgrading facility is proposed for the Regina area Global Transportation Hub. Flax stubble is currently burned by farmers in the field after harvest. 150,000 tonnes burned creates 265,000 tonnes of CO2 pollution. Priced at $50/tonne = $13,200,000 annually ($88.33 / metric tonne).

Replacing the use of fossil fuels with zero carbon emission biomass drives measurable carbon offsets.

Phase 1 flax fiber used to replace natural gas will generate 1.25 million mt of CO2e. Offsets. At a market price of $50 would produce $62.5 million of marketable offsets.

Phase 1 carbon reduction would equate to over 327,000 cars off the road or 1.5 million new trees planted.

CLIMATE CHANGE ACTION PLAN

Climate change is undeniable according to 97% of scientific studies. It is believed that CO2 concentration levels in excess of 400 ppm will result in catastrophic consequences. We have just surpassed this level.

Strategies to combat “Climate Change” by reducing pollution have been adopted by most first world countries, including Canada.

The use of biomass has been identified as a carbon neutral energy source and is one of the new alternative energy platforms the world has stated is necessary to combat “Climate Change”.

Eco-Growth Environmental technologies fit perfectly with the global “Climate Change” objectives and are both simplistic and cost effective.

Canada, per capita, is the most wasteful country in the world, Eco-Growth plans on changing our wasteful habits by converting organic wastes into cleaning burning energy.

Significant carbon emission reductions are achieved in the way of avoiding landfill pollution (methane gas which is 23 times more potent than CO2) and reduced use of hydrocarbon energy (natural gas and diesel).

Flax fibre = woody biomass

Climate Strategy Alternative Energy

Coal Carbon Capture Technology – Texas, Houston https://www.youtube.com/watch?v=0Fxrs1a7fD0&feature=youtu.be

Project Cost: $1 billion + CO2e captured per year: 1.7 million tonnes Capital cost per tonne CO2e captured: $571.43+

Biomass Type MJ/Kg BTU/lb Flax Straw 18 7,810 Wood bark 19 8,432 Lignite coal 22 9,350

Ash% 3.7 1.5 22

Total Hydrogen Chlorine Carbon % % Nitrogrn % Sulpher % Oxygen % (ug/g) 48.2 5.6 0.9 0.1 41.6 2,594 47.8 5.9 0.4 0.1 45.4 257 58.8 4.2 0.9 0.5 13.6 25

Potential availability 500,000 tonnes / Saskatchewan

Flax – Wonder Health Food & Climate Change Solution!

Kamloops, B.C. ▪ Domtar – Kamloops ▪ Electrical Generation: fuel source = biomass hog fuel & Natural Gas ▪ Annual use of hug fuel (wood bark) = 350,000 tonnes ▪ Annual use of natural Gas in boiler: 433,000 mtbu (~$2 million) ▪ CO2e = 433,000 x 117lbs/2,200 = 230,277 tonnes/CO2e ▪ Phase 1 Project: 70,000 mt flax fiber / annum ▪ Biomass replacing Natural Gas: 1 tonne biomass produces 8.5 tonnes reduction in CO2e pollution (see Brightspot Climate Inc.)

Value Carbon Offset: 230,277 @ $50 mt = $11,513,850

Domtar Kamloops Pulp & Paper Facility

BRIGHTSPOT CLIMATE

Business Overview Flax Stubble is baled at farm.

Flax bale is transported.

Flax bale is delivered to upgrading facility at the Regina Transportation Hub.

Upgraded flax stubble is densified and shipped to end customer in Kamloops.

MAKE THE EASY SOLUTIONS FIRST

Agricultural Waste-toclean energy is low hanging fruit

Carbon Capture: Capital cost to build: $571+ / metric tonne Capital project: $1 billion + Operating cost / metric tonne: $80 - $90 Eco-Growth Technology: Capital cost to build: $38 / metric tonne Capital cost: Phase 1 (265,000 metric tonnes CO2e / 150,000 metric tonnes flax fiber).

Operating cost (subsidy): $88 / metric tonne

Flax Fiber Upgrade Plant Regina Global Transportation Hub

150,000 – 180,000 tonne/year capacity Upgrader budget: $10 million Includes: Building Equipment Installation Capital cost / mt = $56 – $67 metric tonne flax processed CO2 = 1.76 / mt flax burned in fields Capital cost / mt CO2 = $32 - $38

Shipping Logistics

Distance: Regina – Kamloops 1,371 km 70,000 tonnes flax shipped CO2e = 1,436 tonnes Estimated volume per rail car: 40 mt

Estimated cost: $40 metric tonne

REGINA TRANSPORTATION HUB

Loblaws

CP Rail Yard

Hog Fuel

Market Price Biomass per million btu (mbtu) Hog Fuel Flax Fiber Price metric tonne ($/mt) $ 60.00 $ 90.00 mbtu/mt (bone dry wt.)

18.7 17.2 % moistue 56% 10% mtbu / mt. adjusted for H 2O 7.3 15.5 Price / mbtu adjusted for H 2O $ 8.22 $ 5.81

Domtar Kamloops – consumes 35,000 mt hog fuel per month. Phase 1, 6,250 mt of flax fiber represents 17.9% of total usage.

Flax fiber would be blended with hog fuel currently used at a ratio of 17.9%.

Pictures taken at Domtar Kamloops site showing hog fuel entering boiler house. Energy produced is used on-site and/or sold back into he BC Hydro grid.

Hog Fuel Market B.C. SIMULATED SUPPLY/DEMAND CURVE HOG FUEL BC

SUPPLY 2 SUPPLY 1

DEMAND 2

DEMAND 1 Reduced supply through plant closures and increased demand from new biomass electrical plant is putting upward pressure on the price of Hog fuel.

Canadian Agri-Fuels Company establishes market for 1 million tonnes of Agricultural Waste Product.

Industry Sectors Agriculture Pulp and paper Potential Markets Domestic Export Clean Energy

Agri-Green Energy President, Kim Caron says, “carbon emission pricing in Canada has changed the energy economy, many agricultural wastes are now looked at as valuable energy resources�.

The domestic and world demand for biomass fiber has exploded as we move to carbon neutral energy sources. Biomass is considered a carbon neutral energy source under the Paris Protocol on Climate Change.

The Canadian supply of biomass fiber has not kept up with demand forcing energy producers to look for more unconventional sources of biomass. Flax and hemp straw is currently burned in the fields, however, changing market conditions is making this agricultural waste into an economic source of biomass fiber.

Agri-Green Canada has plans to construct a 30,000 ft2 biomass upgrading facility in the Regina area. The plant will produce up to 70,000 tonnes of biomass fiber annually which can be scaled up.

The Company is working with a large consumer of biomass (360,000 tonnes annually) to supplement their current 70,000 tonne annual shortfall.

Technology Agri-Waste to Energy Tonnes Available 1 million per annum Energy Potential 17.6 million gigajoules (5 billion kw) GHG Emission Reduction 1.8 million tonnes CO2e per annum Market Value GHG 1.8 million x $50 = $90 million annually Economic Impact Saskatchewan 200+ jobs $100 million economic activity

Executive Mat Service Ltd 6, 115 28th street, SE Calgary, Alberta T2A 5K4

December 4, 2019 JC Allaire Domtar Kamloops Re: Flax Biomass – Hog Fuel Thank you for your letter dated October 30, 2019 expressing interest in possibly incorporating flax fibre into your hog fuels operation in Kamloops.

I understand you have requested an amendment to your hog fuels permit to include flax fibre and might see approvals granted early in 2020.

Since we received your letter of support, we have moved the project along as follows: ❑ Received pricing and delivery timelines for flax straw processing equipment (made in Canada). ❑ Confirmed logistics of baling straw in the fields immediately after harvest ensuring fibre is free of any non-flax contaminants. ❑ December 12, we present our business model to the Board of Directors, Flax Association in Regina. Interim discussions suggest a willingness to enter into long-term supply contracts. ❑ Pricing of flax fibre to your Domtar Kamloops site has many logistical pieces. They are: removal of flax fibre from fields and delivery to processing plant; processing to ensure compatibility with Domtar existing hog fuels, transportation from Regina to Kamloops and delivery to Domtar facility in Kamloops.

We hope to have more clarity on costing after the December 12th meeting, however, interim figures suggest we can economically supply flax fibre to your Domtar facility in Kamloops.

We will keep you posted as things move along on our end.

Best Regards,

Kim Caron President Executive Mat Group of Companies

$12.1 million in startup costs

Phase 1: Economics Revenue Domtar 75,000 mt @ $90 mt

$

6,750,000

Farmer - 75,000 mt @ $15 mt Baler/Hauler to Regina @$30 mt Upgrader - $40 mt Transport Regina - Kamloops @ $45 mt Carbon Offset @ 75,000 mt @ $88.33 Total Expense

$ $ $ $ $ $

1,125,000 2,250,000 3,000,000 3,375,000 (6,624,750) 3,125,250

Profit before tax

$

3,624,750

The project is not feasible based on current logistic costs without monetizing carbon offsets generated.

Monetizing Phase 1 offsets into the project makes the project feasible.

Action Plan: Secure grant for $10 million to build upgrade plant and staff venture.

Secure Federal carbon offsets to be paid from Carbon Tax fund of $88.33 per metric tonne of flax fiber processed.