We would like to thank our Partner Sponsors

We would like to thank our Partner Sponsors:

Carbon Market Business Briefs & Analyst Roundtable Part 2: Asia & CORSIA Catherine Leining, Motu Rene Velazquez, CBL Markets Sung Woo Kim, Kim & Chang Caspar Chiquet, BP Energy Asia Ilona Millar, Baker Mc. Kenzie Eva Weightman, IETA Katie Kouchakji, IETA

Update on the New Zealand Emissions Trading Scheme IETA Live: Carbon Market Virtual Series 10 June 2020 Catherine Leining Policy Fellow, Motu Economic and Public Policy Research We gratefully acknowledge funding support from the Aotearoa Foundation. This presentation does not reflect the views of the New Zealand Climate Change Commission.

ETS Reform Bill: Framework Alignment with Paris Agreement and ZCA [Obligations for biogenic agricultural emissions] [Alternative farm-level pricing mechanism] Target delivery Limit on offshore mitigation for participants Phase-down of industrial free allocation Forestry accounting Compliance Market oversight Auctioning under a cap on units Price safeguards (floor/ceiling) Transparency

Provisional emissions budget: 2021 -25 Approximation of NZ NDC (Added by author) Source: New Zealand Ministry for the Environment (2020). Update on NZ ETS Reforms. https: //www. mfe. govt. nz/reforming-nzets-resources

Provisional emissions budget: 2021 -25 Approximation of NZ NDC (Added by author) Overseas mitigation required to meet NDC: 65. 7 Mt CO 2 e over 2021 -2030 Source: New Zealand Ministry for the Environment (2020). Update on NZ ETS Reforms. https: //www. mfe. govt. nz/reforming-nzets-resources

NZ ETS cap structure: 2021 -25 Source: New Zealand Ministry for the Environment (2020). Update on NZ ETS Reforms. https: //www. mfe. govt. nz/reforming-nzets-resources

Post-pandemic emissions trajectory Source: New Zealand Ministry for the Environment (2020). NZ ETS Unit Supply and Price Control Setting Regulations: Regulatory Impact Assessment. https: //www. mfe. govt. nz/reforming-nzets-resources

NZ ETS price management: 2021 -25 Source: New Zealand Ministry for the Environment (2020). Update on NZ ETS Reforms. https: //www. mfe. govt. nz/reforming-nzets-resources

NZU prices: 2018 to 2020 Source: Comm. Trade/OM Financial (2020). https: //www. commtrade. co. nz/ Copyright OM Financial. Used with permission. Screen shot taken on 9 June 2020 NZ$30. 75 US$20. 09 € 17. 79

For more information: Catherine Leining catherine. leining@motu. org. nz https: //motu. nz @Silver. Lining. GS

Carbon Market Business Briefs & Analyst Roundtable Part 2: Asia & CORSIA Catherine Leining, Motu Rene Velazquez, CBL Markets Sung Woo Kim, Kim & Chang Caspar Chiquet, BP Energy Asia Ilona Millar, Baker Mc. Kenzie Eva Weightman, IETA Katie Kouchakji, IETA

Emission Reduction Fund Source: Clean Energy Regulator

Recommendations from King Review Issue identified Recommendation accepted by Government High upfront costs with some projects Allow certain projects to be awarded ACCUs on a compressed timeline Lack of methods for certain low-cost abatement Establish a new process to provide third parties with the opportunity to propose and prepare ERF methods CCS/CCUS methods currently being scoped The current requirements of the ERF system for assessing and overseeing projects are complicated and burdensome Introduce a formal "duty of utmost good faith" Small projects are effectively excluded by relatively high transaction costs associated with MRV requirements and minimum bid requirements for ERF contracts Create a fixed priced purchasing desk for small projects under the ERF Very few ERF projects have been undertaken by entities that are subject baselines under the "Safeguard Mechanism“ – especially for industrial – related abatement Establish a "below-baseline crediting arrangement’ for large facilities undertaking ‘transformative’ abatement projects” using the Safeguard Mechanism architecture. These will likely be known as Safeguard Mechanism Credits, or "SMCs" Facilitate ‘method stacking’, where multiple ERF projects are taken on the same property using different methods can submit a single project report and audits

Questions

Baker & Mc. Kenzie, an Australian Partnership, is a member firm of Baker & Mc. Kenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organisations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. © 2020 Baker & Mc. Kenzie bakermckenzie. com

Carbon Market Business Briefs & Analyst Roundtable Part 2: Asia & CORSIA Catherine Leining, Motu Rene Velazquez, CBL Markets Sung Woo Kim, Kim & Chang Caspar Chiquet, BP Energy Asia Ilona Millar, Baker Mc. Kenzie Eva Weightman, IETA Katie Kouchakji, IETA

IETA : CARBON MARKET BUSINESS BRIEFS &ANALYST ROUNDTABLE ASIA &CORSIA Emission Trading Scheme of Korea June 10, 2020 Sung Woo Kim, Head of Environment & Energy Research Institute

Phase 1 and 2 of K-ETS Phase 1 (2015 -2017) • • Allocation • 100% free allocation Benchmark allocation: 3 sub-sectors ü Aviation, oil refining, cement ü 6% of total emissions Allocation basis : facility unit Phase 2 (2018 -2020) • • • Verification & Certification • Trade Market • • International offset • • • 2 -month conformity assessment ü All businesses, every facility • 3% paid allocation (for auction) Benchmark allocation : 7 sub-sectors ü Power generation, energy complex, industrial complex, wastes ü 50% of total emissions Allocation basis : facility unit • 2 -month conformity assessment ü All businesses, every facility First publication of assessment results (2019) Launch Emissions Credits Exchange Implement market-stabilizing measures • • Regularly hold auctions (January 2019) Introduce market-makers (May 2019) Diversify emissions reduction methodologies ü Allow 211 CDM methodologies Implement extremely small-scale reduction business • Allow domestic transaction of international offsets achieved by domestic companies • Limit intra-phase carry over of excess credits ü Limit carry overs based on net sales amount of the subject year (May 2019) Limit inter-phase carry over of excess credits (take into account annual average allocations, net sales amount, etc. ) Carry Over & ü Phase 1 Phase 2 ü Phase 2 Phase 3 Borrowing • Modify the limit for borrowing credits in advance Source: Korea Environment Corporation, The 3 rd ETS Forum, 2020. 5. 27 ü Credits required for submission 10% 20% 15% 19

Phase 3 of K-ETS (2021 -2025) Reinforce allocation scheme Activate market function Transparent information Rationalize flexibility • Include domestic CDM projects within covered facilities for allocation • Change the allocation basis from facility unit to business unit • Increase the proportion of auction • Expand the scope of benchmark allocation to over 60% of total emissions • Allow financial institutions to trade with self account, individuals on consignment • Supply or retrieve reserve for proper liquidity • Introduce derivatives for better price discovery and predictability • Enhance the credibility of verifiers and publish sectoral reduction technologies for investment • Domestic offset : Assess the effect of allowance conversion for national GHG reduction • International offset : Overseas reduced emission recognized as Korea’s under the Paris Agreement can be converted to allowance Source: Korea Environment Corporation, The 3 rd ETS Forum, 2020. 5. 27 20 13 |

Price since 2015 Phase 1 (2015~2017) Phase 2 (2018~2020) KRW/ton Source: Korea Environment Corporation, “ 24 th ETS Insight : Emission trading scheme & carbon market”, 2020. 5. 5 21 13 |

Sung Woo Kim sungwoo. kim@kimchang. com 02 -3703 -4675 These materials are provided for general informational purposes only and should not be considered reflecting legal opinions of the firm nor relied upon in lieu of specific advice. Recipients of these materials, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this material without seeking appropriate legal or professional advice. These materials are property of Kim & Chang, and therefore, while recipients may view the materials recipients may not otherwise distribute, disclose or provide to third parties without Kim & Chang’s prior written consent.

Carbon Market Business Briefs & Analyst Roundtable Part 2: Asia & CORSIA Catherine Leining, Motu Rene Velazquez, CBL Markets Sung Woo Kim, Kim & Chang Caspar Chiquet, BP Energy Asia Ilona Millar, Baker Mc. Kenzie Eva Weightman, IETA Katie Kouchakji, IETA

Carbon Market Business Briefs & Analyst Roundtable Part 2: Asia & CORSIA Catherine Leining, Motu Rene Velazquez, CBL Markets Sung Woo Kim, Kim & Chang Caspar Chiquet, BP Energy Asia Ilona Millar, Baker Mc. Kenzie Eva Weightman, IETA Katie Kouchakji, IETA

IETA ROUNDTABLE PART 2: ASIA & CORSIA

Access to Global Commodity Markets CBL is the world’s leading global spot exchange for transacting energy and environmental commodity products. CBL provides market participants with a secure, simple, transparent, and anonymous electronic interface for trading commodities including; carbon, renewable energy, water, and gas. CBL’s secure electronic clearance and settlement processes remove the need for bilateral agreements and promotes confidence and liquidity in the markets.

ICAO Eligible Programmes: On 13 March 2020, the ICAO Council approved the eligible emissions units for the CORSIA. The decision establishes a set of eligible emissions units complying with offsetting requirements in the 2021 -2023 pilot phase of CORSIA from six programmes. Emissions units are issued to activities which commenced as of 1 January 2016, and in respect of emissions reductions occurring through 31 December 2020, subject to each programme’s respective scope of eligibility. 5 out of the 6 programmes which applied, are connected to CBL directly or via the EMA. Programme Name Connected to CBL American Carbon Registry YES China GHG Voluntary Emission Reduction Program NO Clean Development Mechanism YES Climate Action Reserve YES Gold Standard YES VCS Program (managed by Verra) YES

Aviation Carbon Exchange On January 30, 2020, The International Air Transport Association (IATA) and CBL Markets announced a partnership to develop the Aviation Carbon Exchange (ACE). The ACE has been designed to provide a centralized marketplace where airlines can identify, select, and transact CORSIA eligible emission units via a secure electronic interface.

ACE Member Airlines account for more than 300 million t. CO 2 e annually. 14 out of 30 of the world’s largest airlines have accepted an invitation by IATA to join the ACE Pilot program. Of the ACE Pilot members, 20% of airlines have made voluntary commitments including; carbon neutrality for domestic as well as global emissions. This accounts for ~80 million Many of the commitments are scheduled to begin in 2020 Via ACE, Airlines can source voluntary and CORSIA emission units.

Why Airlines are Joining the ACE! • ACE is free for Airlines to join • ACE is intuitive and simple to use • ACE offers Airlines price discovery • ACE removes the barriers of entry associated with carbon markets • ACE can be used by airlines to prepare for CORSIA compliance • ACE has transparent fees

Impact Analysis Modelling COVID-19 impacts on CORSIA and Voluntary Demand (via ACE)

Millions COVID-19 Impacts on CORSIA Emissions 600 500 400 300 200 100 0 2019 2020 Worst Case 2021 Medium Case Pre-COVID Forecast 2022 2023 Baseline

Millions COVID-19 Impacts on Voluntary Commitments 50 45 40 35 30 25 20 15 10 5 0 2021 Worst Case 2022 Medium Case Pre-COVID Forecast 2023

Cumulative CORSIA & Aviation Offset Demand (in millions of t. CO 2 e) 115. 0 100. 6 97. 9 80. 8 64. 2 59. 8 33. 1 60. 5 42. 5 37. 8 23. 6 9. 5 2020 2021 Worst Case 2022 Medium Case Pre-COVID Forecast 2023

Disclaimer This presentation contains information, ideas and analysis which are proprietary to Xpansiv CBL Holding Group (ACN 610 645 148) (“XCHG”). By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you agree not to reproduce in any manner any part of the information contained herein without our prior written consent. This presentation has been prepared by and issued by XCHG to assist in informing interested parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. This presentation may contain forward looking statements. Whilst XCHG has no reason to believe that any such statements are either false, misleading or incorrect, it cannot and does not warrant or guarantee that through either the passage of time or actions beyond the control of XCHG they will not become so. You should not act and you must refrain from acting in reliance on any of this presentation material. Nothing contained in this presentation constitutes investment, legal, tax or other advice. This overview of XCHG does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. The Company has not verified the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this presentation. The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to, or discuss it with, any other person without the prior written permission of the Company.

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Carbon Market Business Briefs & Analyst Roundtable Part 2: Asia & CORSIA Catherine Leining, Motu Rene Velazquez, CBL Markets Sung Woo Kim, Kim & Chang Caspar Chiquet, BP Energy Asia Ilona Millar, Baker Mc. Kenzie Eva Weightman, IETA Katie Kouchakji, IETA

We would like to thank our Partner Sponsors: