TRCPA - Carbon credits are something that I have not factored into any of my models. The impact they will have on new biomass fuel sources can't be dismissed by any means. It's more that I don't have enough data points to know what factors to use. Clearly they will drive more biomass use and by extension affect the manufacturing aspects of the commodity stream.
With all of this as a backdrop, the question then is how will carbon credits affect fasc via KDS sales? Before I hazard an answer though, the US has it's own version of a carbon tax in the form of higher gasoline prices. The pundits have been telegraphing significantly higher fuel prices by May. Ethanol and green gasoline manufacturers like Sundrop Fuels have found the KDS can enhance their overall productivity. So worldwide I believe there will be pressure to identify and incorporate all equipment and processes that make the fuel industries efficient and competitive.
Assuming the KDS is in fact more efficient than other drying/grinding processes, the short answer is that KDS sales should begin a significant upward trend. To that end, the recent quarterly and annual report are beginning to identify these increases. The reports in the first 2 quarters this year appear to indicate 9-10 sales completed or in the works already with each quarter leaping forward over the previous.
The big question becomes at what value to place on fasc and its shares? There is a certain amount of ambiguity surrounding this point primarily due to the lack of information coming from HQ. However, one or two more positive quarters (and I am very certain the current quarter will be in the black) will underscore the current trend. My belief is longs will be smiling a lot by August.
fwiw,
Net-Man
