CO2 GRO Inc (TSX-V:GROW, OTCQB:BLONF) said that besides coronavirus-related labor shortages and supply chain bottlenecks, the recent sharp rise of fossil fuels, CO2 gas shortages rising costs, and carbon taxes globally are negatively impacting the profitability of all protected vegetable, flower, and cannabis growers.
The Toronto-based company believes that now, more than ever, all protected agriculture growers will realize increasingly significant benefits of its sustainable, highly efficient, low-cost CO2 Delivery Solutions technology.
Natural gas prices affect the functioning of facilities and may lead them to close down. For instance, natural gas is employed in the manufacture of ammonia which produces CO2 gas as a by-product. When natural gas prices increase dramatically, the production of ammonia can be unprofitable leading to facility shutdowns as occurred at Terra Nitrogen in the UK and the loss of CO2 gas production that was being captured and delivered to greenhouses.
READ: CO2 Grow CEO writes letter to shareholders; says company technologies resulting in increased grower profitability, reduced ecological footprint
Carbon taxes, meanwhile, are a policy tool to lower CO2 gas emissions.Greenhouses that use CO2 and lose up to 95% via heat venting and building porosity, may have to pay carbon taxes going forward or have to reduce their volume of CO2 gas used, hurting their plant yields, which means that the grower’s profitability will be sharply reduced.
While natural gas prices can and do fluctuate significantly, carbon taxes as a policy tool to reduce greenhouse gas (GHG) emissions are forecast to increase over the coming years. This suggests the CO2 input pricing pressures on facilities that purchase CO2 gas will increase over time.
CO2 GRO said that its CO2 Delivery Solutions is the only CO2 application method that reduces the environmental impact per unit of yield produced in all of the globe's greenhouses that currently employ CO2 gassing while reducing their operating costs.
CO2 use in sealed greenhouses and indoor operations can be reduced by up to 90% using CO2 Delivery Solutions. The company said that its targeted and efficient delivery of CO2 to plant surfaces can help all protected agricultural growers worldwide increase yields by up to 30% and potentially double their profitability.
Since 2018, CO2 GRO has scientifically and commercially proven that misting a dissolved CO2 solution on plant leaves enhances plant yields by up to 30% versus ambient or sub-optimal CO2 concentrations. Nearly all of the CO2 in the solution is diffused into the plants, with minimal CO2 evaporating into the atmosphere.
CO2 emissions taxes would be saved by growers gassing CO2, while at minimum, achieving the same plant yields they get today using up to 90% less CO2, the company said. The benefits to consumers are many, including increasing the supply of locally grown food, improving food security, improving food quality, reducing GHG emissions by shortening supply chains, and significantly reducing CO2 emissions from the greenhouses themselves.
Since 4Q 2019, GRO has sold 24 systems in North America and announced 27 commercial feasibilities in 10 countries. The collective growth facility ownership of these 27 is close to 200,000,000 square feet of predominantly vegetables. This total represents only 0.003% of the massive 600 billion square foot global protected ag capacity.
The agricultural technology company said its product can further add to plant yields and lower the carbon footprint of the eight billion square feet of mostly sealed greenhouses globally that gas CO2. Misting dissolved CO2 instead of CO2 gassing works when greenhouses vent heat that drops their desired 800-1500 PPM CO2 levels to 400 ppm or less as plants consume CO2.
Commercial feasibilities to measure the additional yield at greenhouses that do gas CO2 but vent, are underway in Canada, the UK, and the US, the company said.
CO2 GRO said that its Delivery Solutions also addresses nine of the following United Nations' Sustainability Goals:
1. Will enrich all global protected ag farmers.
2. Will increase food supply from existing protected ag structures.
3. Improves the quality and safety of protected ag food production as well as human worker health in glasshouses that gas with CO2 by displacing 90% of CO2 in the grow room air.
9. Reduces new protected ag infrastructure requirements.
11. Works in urban and vertical protected ag facilities in cities.
12. More responsible and sustainable food production.
13. Uses 90% less CO2 to achieve better yield results in glasshouses as all glasshouses have to vent heat, losing their targeted CO2 gassing concentrations.
15. Will improve protected ag food production at lower cost supporting life on land as well as reducing the need for expanding land use for food production.
17. We will operate internationally with local partners.
The urgency of reducing CO2 emissions to limit climate change is evidenced by government policies and goals which are being discussed at the COP 26 Glasgow Summit. CO2 GRO believes the use of CO2 Delivery Solutions can cut CO2 gassing emissions from greenhouses from up to 90% loss to less than 10% loss.
Current EU CO2 emission credits are €55/tonne (C$80/tonne), with Canada at C$40/tonne targeting $170/tonne by 2030.
Contact Ritika at ritika@proactiveinvestors.com