Mr. Tejinder Virk reports

OSTROM CLIMATE PROVIDES CORPORATE UPDATE

Ostrom Climate Solutions Inc. has provided a corporate update covering key milestones in its global carbon project portfolio. This includes the signing of an emission reduction purchase agreement (ERPA) for its flagship Climate-Smart agriculture project in the Philippines, an overview of British Columbia's output-based pricing system (B.C. OBPS) and Ostrom Climate's role in supporting compliance, and the Quadra Island Forestland conservation project's contribution to high-quality carbon offset supply for the B.C. OBPS.

Ostrom signs emission reduction purchase agreement for Climate-Smart agriculture project in the Philippines

Ostrom entered into an emission reduction purchase agreement (ERPA) with a Fortune Global 500 corporation for the Upper Pampanga River Climate-Smart agriculture rice project (UPRIIS) in the Philippines. This agreement includes an advance payment for carbon credits to finance project development costs, which helps reinforce Ostrom's ability to assess risks, mitigate them and execute this high-integrity carbon project. The ERPA relates to the purchase of verified emissions reductions (VERs), which are independently verified carbon credits representing the reduction of one metric tonne of carbon dioxide equivalent (tCO2e). The first payment under this ERPA has been received as a prepayment against future VERs and becomes repayable if the company is unable to deliver the credits under the terms of the ERPA. Due to confidentiality agreements, further details cannot be disclosed at this time.

UPRIIS has the potential to span over 100,000 hectares in Central Luzon, and is expected to generate high-quality carbon credits over its planned 21-year term, with compliance potential under Article 6 of the Paris agreement. Proceeds from carbon credit sales will directly benefit local partners, including the local irrigation authorities and rice farmers.

Tejinder Virk, chief executive officer of Ostrom, stated: "We are excited to partner with a leading global corporation as a strategic buyer on this transformative project. The UPRIIS initiative is a critical step in advancing Climate-Smart agriculture and achieving significant methane reductions. This agreement underscores our commitment to delivering high-quality carbon projects that drive substantial environmental and socioeconomic benefits."

Rice production is one of the largest agricultural sources of methane emissions, a greenhouse gas over 28 times more effective at trapping heat than CO2 (carbon dioxide) over a 100-year period. According to the World Bank, methane from rice fields accounts for approximately 12 per cent of global agricultural methane emissions. The Alternate Wetting and Drying (AWD) methodology used in this project can reduce methane emissions by up to 48 per cent per hectare according to the International Rice Research Institute (IRRI), while also improving water efficiency and crop resilience. The project design description (PDD) is currently under development and will align with updates to global rice methane crediting methodologies. The company recently applauded Verra, a leading global standards organization that certifies greenhouse gas (GHG) reduction projects through the Verified Carbon Standard (VCS), for releasing VCS methodology VM0051 improved management in rice production systems, v1.0. This methodology replaced the previous CDM AMS-III.AU., expanding eligible project activities, enhancing monitoring techniques and strengthening baseline calculations.

Ostrom supports B.C. industry with output-based pricing system (B.C. OBPS) compliance

British Columbia (B.C.) pioneered carbon pricing by introducing Canada's first greenhouse gas (GHG) tax in 2008. Over time, the province adapted its carbon pricing framework to balance emissions reductions with industrial competitiveness. The B.C. OBPS, which came into effect on April 1, 2024, replaces the CleanBC Industrial Incentive Program (CIIP) and introduces a more flexible, performance-based approach to industrial emissions regulation. The system allows companies to comply based on their emissions intensity rather than facing a blanket carbon tax.

According to the B.C. government's B.C. OBPS program and reporting guidance, which was released in January, 2025, the B.C. OBPS applies to industrial facilities emitting 10,000 tCO2e or more annually. Instead of paying a fixed carbon tax, regulated emitters receive a facility-specific emissions limit that becomes progressively more stringent over time. Facilities that reduce emissions below their assigned limit can generate compliance credits, while those exceeding their limit must either purchase credits or pay a carbon price, which starts at $80/tCO2e in 2024 and increases by $15 per year until reaching $170/tCO2e by 2030.

Ostrom supports the British Columbia industry by providing GHG quantification, regulatory compliance advisory services and access to verified B.C. OBPS-compliant carbon offsets. As industrial operators adjust to the new regulatory landscape, Ostrom's expertise will ensure businesses can optimize their emissions management strategies while remaining competitive. The B.C. OBPS allows emitters to use high-quality offset credits to meet their obligations, which management believes will position Ostrom as a key provider of credible offset solutions for industrial facilities.

Quadra Island Forestland conservation project: one of the few B.C. OBPS-compliant offset projects available

Ostrom has had an exclusive carbon offset marketing and sales agreement in place since 2016 with the Quadra Island Forestland conservation project, a significant environmental initiative that preserves over 400 hectares of at-risk forestland in British Columbia. Without carbon offset funding, this land would have been subject to logging and development. Instead, it has been permanently protected and is now managed by B.C. Parks, contributing to long-term climate resilience and biodiversity protection.

This conservation project was validated under the B.C. Forest Carbon Offset Protocol (B.C. FCOP) and verified by KPMG Performance Registrar Inc., ensuring the highest standards of environmental integrity. Over its 25-year life span, the project is expected to generate over 90,000 tonnes of carbon dioxide equivalent (tCO2e) in B.C. offset units. In addition to its climate benefits, the project protects second-growth Coastal Western Hemlock forests, maintains wildlife corridors and safeguards cultural heritage sites, including an aboriginal portage route.

Management believes the Quadra Island project is one of the few carbon offset projects currently available that is fully B.C. OBPS-compliant, making it a valuable solution for industrial emitters seeking cost-effective pathways to regulatory compliance. The project also serves as a model for conservation finance, demonstrating how carbon markets can help protect critical ecosystems while supporting the transition to a lower-carbon economy.

About Ostrom Climate Solutions Inc.

Ostrom is one of North America's leading providers of carbon project development and management services, climate solutions, and carbon credit marketing. Over the past 12 years, Ostrom has validated and verified forest carbon projects globally for voluntary and regulated markets, having developed 16 million acres of forest land for conservation and monetized over 10 million carbon credits. Based in Vancouver, B.C., Canada, Ostrom has a global reach, working with over 200 organizations -- including Fortune 500 companies-managing projects in partnership with indigenous stakeholders, and gaining extensive on-ground experience in emerging markets.

Ostrom is focused on developing high-quality carbon projects that have a positive impact on the environment, local communities and biodiversity. Ostrom is publicly listed on the TSX Venture Exchange (COO) and the Frankfurt Stock Exchange (9EAA).

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