Customer will acquire 25,000 CFR credits in 2024 under the purchase agreement, with an option for an additional 100,000 credits in 2025
Vancouver, British Columbia--(Newsfile Corp. - March 27, 2024) - DevvStream Holdings Inc. (CBOE: DESG) (OTCQB: DSTRF) (FSE: CQ0) ("DevvStream" or the "Company"), a leading carbon credit project co-development and commercialization firm specializing in technology-based solutions, today announced a multi-year carbon credit purchase agreement (the "Agreement") with a major logistics and marketing firm (the "Customer"), a wholesaler, transporter, supplier and marketer of liquid petroleum gases, crude oil, heavy fuel oil, and refined fuel and bio-fuel products. Under the terms of the Agreement, the Customer will purchase 25,000 compliance carbon credits from DevvStream, with an optional 100,000 additional credits.
Compliance credits purchased under the agreement will be generated under the Canadian Clean Fuel Regulations ("CFR") program in Compliance Category 3 "supplying fuel or energy to advanced vehicle technology," such as electric vehicle ("EV") charging stations. The first delivery of CFR credits is expected by December 31, 2024.
"This Agreement reflects the strong demand for CFR credits and DevvStream's commitment to fostering long-term relationships with commercial buyers to incentivize innovation and adoption of clean technologies and expand the use of low-carbon intensity fuels throughout the economy," said Sunny Trinh, CEO of DevvStream. "The CFR credits sold under this Agreement will be developed under Canada's CFR program, the first national low-carbon fuel program in North America. Our ability to meet these stringent requirements showcases DevvStream's expertise in the carbon sector."
The CFR is a crucial component of Canada's climate plan aimed at reducing emissions, advancing clean technologies and fuels, and fostering sustainable jobs in various sectors like clean technology, agriculture, and low-carbon energy. CFR regulations focus on making gasoline and diesel cleaner over time, promoting the adoption of clean fuels and technologies, and driving innovation across multiple industries. According to company estimates, the expected price for compliance credits developed under the CFR program is $200 - $300 CAD per credit.
DevvStream's Low Carbon Fuels Advisor, Dr. Michael Rensing, will oversee the generation of CFR credits under this Agreement. Dr. Rensing has been instrumental in developing and implementing successful low-carbon fuel standard ("LCFS") policies and legislation, including British Columbia's, which is one of the most successful LCFS Programs in North America. Carbon credits that are sold in the BC LCFS market are among the world's highest in value, with prices in 2023 averaging $472 CAD per credit.
The CFR program aims to reduce the carbon intensity of transportation fuels, such as gasoline and diesel, by approximately 15% below 2016 levels by 2030, resulting in significant greenhouse gas reductions of up to 26 megatonnes. The CFRs have replaced Canada's Renewable Fuel Regulations and focus on lifecycle greenhouse gas emissions rather than volumetric blending requirements. To comply with these regulations, primary suppliers must create credits and can trade them through a credit market established to meet specific carbon intensity reduction requirements. The CFR program was developed under the 2016 Pan-Canadian Framework on Clean Growth and Climate Change ("PCF"), and is now included under Canada's 2030 Emissions Reduction Plan, which provides a roadmap for the Canadian economy to achieve 40-45% emissions reductions below 2005 levels by 2030, building upon the actions outlined in Canada's previous climate plans. The PCF is considered a foundational step for Canada to achieve its commitments under the Paris Agreement and work towards a prosperous net-zero emissions future by 2050.
About DevvStream
Founded in 2021, DevvStream is a leading authority in the use of technology in carbon project development. The Company's mission is to create alignment between sustainability and profitability, helping organizations achieve their climate initiatives while directly improving their financial health. With a pipeline of over 140 technology-based projects worldwide, DevvStream makes it simple for corporations and governments to address their net-zero goals while generating premium carbon credits in the process. DevvStream takes a programmatic approach to evaluating project opportunities, and co-develops projects spanning energy-efficient buildings, facilities and homes, industrial facilities, LED systems, EV charging stations, and technologies to seal oil wells. The Company's end-to-end proprietary solution removes the risk and complexity from every step, allowing organizations to move from project ideation to credit monetization with ease. The result is a multi-year stream of carbon credit revenue that transforms sustainability into a financial investment. In addition, for organizations that need help to offset their most difficult-to-reduce emissions, we also provide premium carbon credits for purchase.
On September 13, 2023, DevvStream and Focus Impact Acquisition Corp (NASDAQ: FIAC) ("Focus Impact") announced that they have entered into a definitive business combination agreement for a business combination that would result in the combined company (DevvStream) to be listed on the Nasdaq Stock Market under the ticker symbol "DEVS". On December 11, 2023, DevvStream announced the filing of a registration statement on Form S-4 with the U.S. Securities and Exchange Commission, which contains a preliminary proxy statement/prospectus in connection with the proposed business combination between DevvStream and Focus Impact (the "Business Combination"). Upon closing, the Business Combination is expected to result in DevvStream being the first publicly traded carbon credit company on a major U.S. stock exchange.
Disclaimer
Certain statements in this news release may be considered forward-looking statements. Forward-looking statements are statements that are not historical facts and generally relate to future events or DevvStream's future financial or other performance metrics. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expect", "intend", "will", "estimate", "anticipate", "believe", "predict", "potential" or "continue", or the negatives of these terms or variations of them or similar terminology. These forward-looking statements, including, without limitation DevvStream's expectations with respect to future performance and anticipated financial impacts of the Agreement and Business Combination are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by DevvStream and its management, are inherently uncertain and subject to material change. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the ability to produce carbon credits under the Agreement which will adhere to the Core Carbon Principles and comply with the CFR program's standards; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of negotiations and any subsequent definitive agreements with respect to the Business Combination; (3) the outcome of any legal proceedings that may be instituted against Focus Impact, DevvStream, the combined company or others; (4) the inability to complete the Business Combination due to the failure to obtain approval of the stockholders of Focus Impact and DevvStream or to satisfy other conditions to closing; (5) changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations; (6) the ability to meet Nasdaq's or another stock exchange's listing standards following the consummation of the Business Combination; (7) the risk that the Business Combination disrupts current plans and operations of Focus Impact or DevvStream as a result of the announcement and consummation of the Business Combination; (8) the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; (9) costs related to the Business Combination; (10) changes in applicable laws or regulations; (11) the possibility that Focus Impact, DevvStream or the combined company may be adversely affected by other economic, business, and/or competitive factors; (12) estimates of expenses and profitability and underlying assumptions with respect to stockholder redemptions and purchase price and other adjustments; (13) various factors beyond management's control, including general economic conditions and other risks, uncertainties and factors set forth in the section entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Registration Statement on Form S-4 that includes a proxy statement and prospectus of Focus Impact (as amended, the "Registration Statement"), filed with the SEC on December 4, 2023, and other filings with the SEC; and (14) certain other risks identified and discussed in DevvStream's Annual Information Form for the year ended July 31, 2023, and DevvStream's other public filings with Canadian securities regulatory authorities, available on DevvStream's profile on SEDAR at www.sedarplus.ca.
These forward-looking statements are expressed in good faith, and DevvStream believes there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and DevvStream is not under any obligation, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review the statements set forth in DevvStream's public filings with Canadian securities regulatory authorities. This news release is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in DevvStream and is not intended to form the basis of an investment decision in DevvStream. All subsequent written and oral forward-looking statements concerning DevvStream, the proposed transaction or other matters and attributable to DevvStream or any person acting on DevvStream's behalf are expressly qualified in their entirety by the cautionary statements above.
On Behalf of the Board of Directors,
Sunny Trinh, CEO
DevvStream Media Contacts
DevvStream@icrinc.com and info@fcir.ca
Phone: (332) 242-4316
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