Clarification of New Ukrainian Law on Wood Exports

10 July 2015

Active Energy Group Plc
("Active Energy Group" or the "Group" or the "Company" or "AEG")

Clarification of New Ukrainian Law
Banning Exports of Unprocessed Wood

Active Energy Group Plc (AIM: AEG.L), the London Stock Exchange AIM-quoted international supplier of industrial wood chip for MDF manufacturing and Biomass for Energy (BFE) power generation, global forestry and natural resources development services, and Biomass for Energy (BFE) fuel solutions and systems announces that it is aware of market speculation concerning the law passed by the Ukrainian parliament on 8 July 2015 banning the export of unprocessed wood from the country.

The new legislation stipulates a 10-year ban for 'unprocessed wood including raw wood, such as roundwood in the form of logs, poles etc.', which the Board believes will have a positive impact on AEG's Ukrainian wood chip processing operations. 

AEG is the largest producer and exporter of processed wood products (in the form of wood chip) in Ukraine, so the new law will not affect its operations.

In fact the Board believes that it will serve to enhance the Group's profile in the country, as it is intended to create new jobs within the wood-processing industry, to conserve the country's forestry assets, to prevent illegal logging, and to increase export revenues. 

It may also present new supply, logistics and shipping opportunities for AEG, which sources all of its raw timber, primarily waste wood and forestry thinnings, from the official Ukraine State Agency of Forestry Resources (SAFR).

Richard Spinks, CEO of Active Energy Group, commented:  "My co-Directors and I remain very confident in the long-term viability and continued success of the Group's Ukrainian wood chip operations - which reported revenues of US$17.395 million in 2014, an eleven-fold increase over the previous year." 

"We are fully-committed to continuing with our expansion plans to meet the greatly-increased demand for our products from our Turkish MDF manufacturing customer base."

 "Moreover, reports from the 'Association of Woodworking and Harvesting Enterprises of the Western Ukraine' state that 40% of the raw wood used at wood-processing plants goes to waste, which could be utilised as raw material for Biomass for Energy (BFE) fuel pellet production; an industry sector which AEG has been actively exploring and on which we presented a Public-Private Partnership proposal to the Ukraine government in May 2015."

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NOTES TO EDITORS & CONTACT INFORMATION

ABOUT ACTIVE ENERGY GROUP PLC:

Active Energy Group Plc is a London Stock Exchange AIM-quoted company (AIM: AEG.L).  Headquartered in the UK, it is a fast-expanding international business, which has experienced exceptionally strong growth and diversification into complementary industry sectors since the current management team assumed responsibility in mid-2012.

The Group has considerable expertise across the entire timber industry supply chain - from forest to finished product. 

Its four specialist business divisions, which reflect its knowledge and experience and which work together to maximise commercial opportunities, focus on providing products and services to specific global market sectors:

·   Forestry & Natural Resources Development and Management

·   Wood Chip for Medium-Density Fibreboard (MDF) Manufacturing

·   Wood Chip for Biomass for Energy (BFE) Power Generation

·   Second Generation Biomass for Energy (BFE) Fuel Solutions and Systems

Active Energy Group Plc operates from four international locations:

·   Ukraine, where it is the largest producer and exporter of wood chip for MDF manufacturing.

·   Canada, where it has entered into a landmark joint venture - KAQUO Forestry & Natural Resources Development Corporation - with several indigenous Métis Settlements to commercialise in excess of 250,000 hectares of their lands, containing valuable forests and natural resources, including oil and gas reserves.

·   Spain, from where it sources finished wood chip for export to international customers.

·   United Kingdom, where it operates a research & development facility for new BFE fuel technologies.

Ukraine and Canada, with their large forestry reserves and comprehensive road, rail and sea transport links, are ideal locations from which to source raw timber and manufacture wood chip and fuel pellets for supply to MDF producers and Biomass power plants.

In addition to its existing activities, the Group is actively developing innovative Biomass fuel solutions, converting waste wood and industrial/agricultural by-products into feedstock for clean energy power generation as a direct replacement for coal.

A highly experienced and dedicated management team leads Active Energy Group Plc, each of whom possesses a proven track record in the industries and regions in which it operates and from which its revenues are generated. 

The Company has grown significantly in recent years, and has established a firm foundation, excellent reputation and international customer base upon which to build for the future.

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