the OTC .today

The Truth About Carbon Credits
& How Bluforest (BLUF) Is Misrepresenting Its Own Asset Value

August 14, 2013: Carbon credits have become one of the new pretend assets of choice, claimed by penny stock companies in order to create the facade of a chance to invest in something with value.  In actuality, carbon credits are air. You cannot hold them. You cannot see them. It is difficult to sell them as their is a limited market. Their mere existence was conjured up by a bunch of countries looking for a way to reduce the carbon footprint of us humans.  As they are difficult to ascertain and put a value to or contest that value, they make for easy fodder to vend into a company looking to be the subject of a nefarious penny stock scheme.  Some of the companies which have claimed carbon credits as an asset in order to facilitate a Pump & Dump include: Amazonas Florestal, Ltd. (AZFL); Carbon Credits International (CARN); Foy Johnston, Inc (FOYJ); BioPower Operations Corporation (BOPO); and, Jim Can's sister schemes, Global Resource Energy, Inc. (GBEN) and Blueforest, Inc. (BLUF).  Interestingly, just yesterday, the perpetrators of the FOYJ fraud (among other frauds), were arrested after being indicted for wire fraud, securities fraud and other crimes.

BLUF is currently being heavily pumped for the sake of dumping insider shares. Seeking Alpha has already issued a warning about that Pump & Dump campaign, to go along with ours.

What Are Carbon Credits

A carbon credit is a generic term for any tradeable certificate or permit representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent to one tonne of carbon dioxide. Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases. Carbon trading is an application of an emissions trading approach. Greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other greenhouse gases into the atmosphere. Since greenhouse gas mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners and around the world. There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis. These carbon offsetters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects. Buyers and sellers can also use an exchange platform to trade, such as the Carbon Trade Exchange, which is like a stock exchange for carbon credits. The quality of the credits is based in part on the validation process and sophistication of the fund or development company that acted as the sponsor to the carbon project. This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously validated Clean Development Mechanism.

Carbon credits typically have value only in those countries who have committed to the Kyoto Protocol to reduce greenhouse gas emissions. The UN 1997 Kyoto Protocol supports the development of carbon-cutting projects by awarding investors with Carbon Credits that can be sold to companies and governments with pollution caps.

Carbon credits are stored electronically in ‘registries’. Registries are essential for issuing, holding, and transferring carbon credits. Once a carbon project is issued with credits, the registry gives each one a unique serial number so that they can be tracked through their entire life-cycle. Registries also facilitate the retirement (surrendering) of credits for carbon neutrality purposes, ensuring credits are not resold at a later date.

The Value of Carbon Credits

According to Redd-Monitor.org, a website tracking news about Reduced Emissions from Deforestation and forest Degradation, during 2012, the market for voluntary carbon credits grew by 4% in volume, reaching 101 million tonnes of carbon offsets. But the market value decreased by 11% as the average price of voluntary carbon credits fell from US$6.2 in 2011, to US$5.9 in 2012.  Today, Redd-Monitor issued their own concerns about BLUF.

According to this article from New Zealand, the cost of carbon credits fell to just 14 cents a tonne in February, "a far cry from the $25 a tonne forecast when the emissions trading scheme was created".

According to Bloomberg, in July, carbon credits surged to a six-month high after the European Union specified which credits are ineligible for use in its own market, the biggest market for carbon credits in the world. Prices jumped to as high as USD $0.33 a tonne, the highest since Jan. 31. Prices plunged to a record low USD $.08 a tonne on May 1 amid a surplus of carbon permits in Europe, where slowing economic growth has damped demand for the credits.  We cannot imagine that there would be too much of a discrepancy in price around the world, and since Europe is the biggest market for carbon credits, it is fair to assume that they are worth about 33 cents.

The point made is that the Carbon Credit market is hardly stable and certainly not worth what was once envisioned.  At least not yet.

Bluforest's So-called Asset

BLUF claims that it is its plan is to sell Carbon Credit generated by its property in Ecuador. In reality, BLUF is in a business that has very little if any carbon footprint and that is to run a printing press generating share certificates.  Their own website talks more about investment in their stock that availability of their supposed product, carbon credits.

Their first acquisition regards a property of 135,000 hectares in Ecuador, which BLUF does not own, but holds in trust for the rights to any assets of the property, including carbon credits.  The rights were acquired from another company controlled by Jim Can and BLUF President, Charles Miller, Global Environmental Investments Limited, a Belize corporation (GEIL).  GEIL acquired the rights from the land's actual owner. The second acquisition is a similar rights acquisition to another 25,000 hectares in Ecuador.  It is these two properties to which BLUF has arbitrarily assigned an asset value of almost $700 million.  What is curious is that the Bluforest website states that it has not yet evaluated the value of the assets.
"Land assets in Ecuador will be certified through approved methods that establish the number of CO2 offset credits per hectare"
So where does the almost $700 million number come from?

As is customary with these Pump & Dump schemes, we expect that BLUF will eventually lose these rights after the Pump & Dump is played out, either for "lack of performance", "inability to fund", or "surrender after unsatisfactory due diligence", much like what happened with BLUF's predecessor, Greenwood Gold Resources Inc's , phony acquisition of the Summer property from Candorado.

So how did BLUF come up with the valuation of the carbon credit assets?  We reason that the truth comes from BLUF's own statements in which it concocted a "sale" of carbon credits to sister fraud, GBEN:
"On November 12, 2012, the Company entered a Certified Emission Reductions Pre-sale and Purchase Agreement (“CERSPA”) with Global Resource Energy Inc. (“GBEN”). Under the agreement, GBEN pre-purchase of 66,000 CERs from the Company. Total purchase price of $660,000 was paid in the form of 3,000,000 restricted shares of GBEN."
66,000 carbon credits for $660,000 and in doesn't take a math genius to figure that BLUF valued these carbon credits at ten bucks a copy.

As discussed above, the actual value is about 33 cents per credit, a 96.7% discount to the value established by BLUF, in the phony transaction, rendering their purported almost $700 million asset to a more realistic value of about $23 million, but only if everything else is true, and don't bet the farm on that.

Suddenly, we see why there is more money selling share certificates than actually selling carbon credits.