Active Energy Ukraine is a wholly owned subsidiary of Active Energy Group. A Ukrainian acquisition formed in October 2011 to address the opportunity provided by the immense timberlands in the Ukraine and the European growing demand for biomass. The company assets are all situated along the EU; Polish-Ukrainian border.

Active Energy Ukraine's strengths are found in its access to incredibly qualified staff, modern equipment and access to vast feedstock from the Lyuboml Forestry in Lutsk, the Ukraine which covers 137,000 ha of land with over 25 to 27 mln m2 of standing timber. This represents 8&perc; and we are in the process of planning to secure more in the future. The close proximity of the Lyuboml forest to the Polish border enables easy provision of biomass sales to electricity generators based in Poland and the EU.

With such a vast feedstock Active Energy Ukraine has huge potential to provide not only Polish, Ukrainian and EU clients with product, but also global companies with raw materials, logs, wood chips. It has access to a major timber yard on site for processing, storage and loading with an area of 30,000 m2. Performing a wide range of forestry and processing operations, allowing us to service a wide variety of customer specifications and specifically the latest contract, to supply the Polish Power Generation sector with large scale shipments of biomass.

Ukrainian Forestry and Timber Market Overview

Biomass is an abundant, untapped and environmentally friendly renewable energy carrier.

The Ukraine is the 8th biggest country in Europe (exc Russia) with 9.5 million hectares of forest, which currently accounts for 15.7% of the total land area.

The timber stock volume is around 1.8 bln. cu.m with an average annual accession rate of forest at 4.0 cu.m. per hectare and varies from 5.0 cu.m. in Carpathian Mountains to 2.5 cu.m. in steppe zone. The export volume of wood and wood products accounts for over 2% of the total exports from the Ukraine for the period (2008) or $801 million.

The Lutsk and Lyuboml Forestry Area

Active Energy Ukraine has an agreement with access to vast feedstock supplies from the Lyuboml Forestry in Lutsk. Lyuboml Forestry in the Ukraine covers 137,000 ha of land with 25 to 27 mln m2 of standing timber., amounting to over 0.5% of all wood in the Ukraine.

Active Energy Contracts

Active Energy Ukraine has a number of contracts providing biomass underway, these include:

• Ukrainian state Enterprise "Lyuboml Forestry" - access to 100,000 tonnes of timber per annum for a 10 year contract.
• Volyuninvestbud in the Ukraine - ability to process and ship 80,000 tonnes of processed wood chips per annum.
• Medium SP.Zo.o in Poland. - order contract for 80,000 tonnes a year of processed wood chips to power stations in Poland.

Biomass In Europe

Biomass currently accounts for around half (44 to 65%) of all renewable energy used in the EU. Biomass meets 4% of the EU’s energy needs (69 million tonnes of oil equivalent (toe)). The aim by the EU is to increase biomass use to around 150 million toe, providing a significant opportunity for biomass imports from the Active Energy Ukraine site in the Ukraine to the EU and specifically Poland.

Biomass Opportunity Poland

The biomass energy market in Poland is less developed than the fossil fuel market. In Poland sustainable solid biomass resources have been difficult to obtain whilst the requirement for good quality solid biomass to fuel power plants has been steadily increasing, mostly due to the recently dynamically developing use of biomass in co-firing with coal for electricity production and heating.

In Poland large-scale biomass fuelled power plants utilise direct solid biomass combustion (e.g. Jaworzno, Elbląg, Konin, Połaniec, Białystok) or co combustion of solid biomass with coal (e.g. Opole, Ostrołęka, Siersza, Jaworzno, Łaziska, PAK, Turów/lignite etc.). Large-scale biomass co combustion has created strong demands on biomass markets in Poland contributing to their development in recent years

Benefits of Biomass

Biomass is a sustainable fuel that can offer a wide range of benefits:

• Biomass is a “carbon lean” fuel producing a fraction of the Carbon emissions of fossil fuels.
• The use of biomass fuel provides an economic incentive to manage woodland which improves biodiversity.
• Many biomass fuels generate lower levels of such atmospheric pollutants as sulphur dioxide
• Modern biomass combustion systems are highly sophisticated, offering combustion efficiency and emission levels comparable with the best fossil fuel boilers.

Gavin Little - Executive Chairman

Gavin Little was appointed Chairman of Active of Active Energy Group plc in April 2011.

Gavin has over 20 years' sales, marketing and general management experience, most recently with British American Tobacco Co Plc ("BAT") as CEO of the Northern Europe region, where he was responsible for strategy and operations; overseeing the restructuring and corporate development of the GBP700m turnover business. Prior to this, Gavin was Chief Marketing Officer, USA, for Reynolds American Inc., a leading US tobacco company in which BAT is the major shareholder, having held previously a number of senior management roles globally within BAT.

Philip Palmer – Chief Executive Officer

Philip Palmer was appointed as a Director of Active Energy Group plc on 19th September 1997.

In 1977, Mr Palmer established Healthcare Logistics Ltd to provide logistical services for the pharmaceutical industry. He was responsible for developing the company into the leading UK provider of outsourcing services to the pharmaceutical sector. The business was sold in 1997 via a management buyout and is now the UK logistics arm of Movianto a division of Celesio AG.

Significant Shareholders