Mr. Michael Costa reports

BASE CARBON PROVIDES UPDATE ON VIETNAM REGULATORY FRAMEWORK FOR INTERNATIONAL CARBON CREDIT TRANSFERS

Base Carbon Inc. is providing an update on its Vietnam household devices project following an important regulatory development from the government of Vietnam.

The government of Vietnam has issued Decree No. 112/2026/ND-CP, dated April 1, 2026, establishing a comprehensive regulatory framework for the international transfer of carbon credits. The decree formalizes the process by which the government of Vietnam may issue a letter of authorization (LOA) pursuant to Article 6.2 of the Paris Agreement and prescribes the procedures by which carbon project developers may apply for government approval to transfer carbon credits to international counterparties with a "corresponding adjustment." The decree takes effect on May 19, 2026.

Highlights

• The government of Vietnam has issued a comprehensive regulatory framework formalizing the LOA and corresponding adjustment process under Article 6.2 of the Paris Agreement.

• Receipt of a LOA, outlining the corresponding adjustment framework, would position the project's carbon credits for potential compliance market eligibility, including CORSIA and Singapore's carbon tax regime, replicating the compliance pathway successfully established for the company's Rwanda cookstoves project.

• The Vietnam household devices project is the company's largest project by anticipated future carbon credit generation, with an estimated 7.6 million carbon credits issuable during the project's second phase and an estimated additional 4.7 million carbon credits potentially available in connection with the project's expansion option.

• With the Vietnam regulatory framework now prescribed and project development partner, Sipco, actively preparing the required application documentation, the company believes it is well positioned to advance the project through the LOA process immediately following the decree's effective date.

Strategic significance

This regulatory development is directly relevant to the company's Vietnam household devices project, its largest project by anticipated future carbon credit production. Receipt of a LOA from the government of Vietnam would enable the application of corresponding adjustments to the project's carbon credits, a critical step toward potential compliance markets eligibility. These markets include CORSIA, the global aviation industry's carbon offsetting and reduction scheme, and Singapore's carbon tax regime, under which eligible international carbon credits must carry corresponding adjustments pursuant to Article 6 of the Paris Agreement. Singapore's carbon tax recently increased to $45 (Singapore dollars) ($35 (U.S.)) per tonne on Jan. 1, 2026, with a stated trajectory of $50 (Singapore dollars) ($39 (U.S.)) to $80 (Singapore dollars) ($62 (U.S.)) per tonne by 2030.

To facilitate the potential delivery of Vietnamese generated carbon credits into Singapore's carbon tax regime, the countries of Singapore and Vietnam have executed an implementation agreement for the international transfer of certain correspondingly adjusted high-integrity carbon credits aligned to Article 6 of the Paris Agreement.

The company's experience with its Rwanda cookstoves project provides a clear commercial precedent regarding the potential upside associated with expanding compliance market eligibility. In Rwanda, the LOA and Article 6 authorization process led to Verra's CORSIA-eligible tagging of certain project carbon credits and first compliance market sales completed in the first quarter of 2026. The company believes that advancing the Vietnam project through a similar process has the potential to enhance the value and monetization pathways for the project's future credit production.

Under the second phase of the project (2025 to 2032), the company retains the option to purchase all future carbon credits generated by the project on a yearly basis at $5.00 (U.S.) per credit, subject to certain buyback options at attractive prices materially higher than the company's option price. In addition, the company retains an expansion option under which it may expand the project up to an aggregate total of 1.2 million cookstoves and 600,000 water purifiers for an additional prepayment, with approximately 4.7 million additional carbon credits expected to be generated under this option. These structures provide the company with significant embedded optionality should the project's carbon credits achieve compliance market eligibility and the associated pricing premiums observed in markets such as CORSIA and Singapore.

"Vietnam formalizing its Article 6 framework is a meaningful regulatory catalyst for our business. We have been through this process before with our Rwanda project where the granting of a LOA ultimately led to CORSIA eligibility and our first compliance market sales. For our Vietnam project, the existing implementation agreement with Singapore adds an attractive and complementary potential sales channel, with Singapore's carbon tax currently priced at $45 (Singapore dollars) ($35 (U.S.)) per tonne," said Michael Costa, chief executive officer of Base Carbon.

About Base Carbon Inc.

Base Carbon provides capital, development expertise and management operating resources to projects involved in the global carbon markets. The company endeavours to be the preferred carbon project partner in providing capital and management resources to carbon removal and reduction projects globally and, where appropriate, will utilize technologies within the evolving environmental industries to enhance efficiencies, commercial credibility and trading transparency.

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