Mr. Michael Costa reports

EU PROPOSES TO EMBED CORSIA INTO LAW THROUGH 2035 AS BASE CARBON'S RWANDA INVENTORY BECOMES FULLY CORSIA-ELIGIBLE

Base Carbon Inc. with operations through its wholly owned subsidiary, Base Carbon Capital Partners Corp., has seen the European Commission's July 17, 2026, publication of proposed reforms to the European Union Emissions Trading System, which embeds the Carbon Offsetting and Reduction Scheme for International Aviation into European Union law through 2035. Additionally, Verra has completed the tagging of all 342,356 remaining carbon credits held in the company's inventory from the Rwanda cookstoves project as CORSIA first phase, 2024-2026 eligible, increasing the company-held CORSIA-eligible carbon credits available to serve the international aviation compliance market.

Highlights:

• The European Commission's proposal embeds CORSIA into European Union law through 2035, with initial EU demand anticipated to account for approximately 70 per cent of currently tagged global CORSIA carbon credit supply.
• CORSIA-eligible carbon credit pricing has strengthened materially in recent weeks, with the spot price of the ICE Dec. 26 CP1 futures contract increasing approximately 39 per cent since June 30, 2026.
• Verra has completed CORSIA-eligible tagging of all 342,356 previously untagged carbon credits held by the company from its Rwanda cookstoves project, developed in partnership with the DelAgua Group. This brings the company's total CORSIA-eligible inventory to approximately 1.1 million carbon credits at the time of tagging.
• The company and DelAgua are in the process of securing the insurance required to tag approximately 640,000 previously issued, untagged carbon credits held by DelAgua as CORSIA eligible, which are subject to the revenue-sharing arrangement between the company and DelAgua.

EU CORSIA announcement and market response

On July 17, 2026, the European Commission published its review of the EU ETS, including proposed reforms to address how CORSIA would operate alongside the EU ETS for flights beyond the EU. Under the proposal, CORSIA would be embedded into EU law through 2035, and would remain the sole compliance framework for all flights departing the European Economic Area during 2027 and 2028. Beginning in 2029, the EU ETS would expand on a trial basis to certain short- and medium-haul departures from the EEA. Under the proposal, expenditures on CORSIA carbon credits would be deducted from EU ETS obligations. The commission has also indicated it will conduct a further review of CORSIA's effectiveness in 2032, which will determine how the two schemes operate thereafter.

Importantly, the proposal confirms that no additional eligibility requirements will be imposed on CORSIA phase 1 carbon credits beyond those established through CORSIA's existing framework. The EU phase 1 demand for CORSIA carbon credits alone is anticipated to reach at least 29 million credits, representing approximately 70 per cent of the current global supply of the estimated 40 million CORSIA phase 1 carbon credits tagged to date.

"The European Commission's proposal provides an important validation for CORSIA, and, we believe, meaningful clarity on the long-term demand for high-integrity aviation compliance credits," said Michael Costa, chief executive officer of Base Carbon. "The EU has proposed to embed CORSIA into EU law through 2035. Base Carbon continues to be well positioned for this important and positive development, with all of our Rwanda cookstoves inventory now tagged as CORSIA eligible. In addition, we anticipate regular future carbon credit issuances from the project and near-term tagging of inventories held by DelAgua."

CORSIA-eligible carbon credit pricing has strengthened materially in recent weeks as confidence in the aviation compliance market has improved. Leading into and following the July 17 EU announcement, the spot price of the ICE Dec. 26 CP1 futures contract has increased approximately 39 per cent since June 30, 20262.

CORSIA eligibility of Rwanda cookstoves project carbon credits

On July 17, 2026, carbon credit registry Verra, following its review of the government of Rwanda's biennial transparency reports pursuant to the Paris agreement, completed the CORSIA-eligible tagging of an additional 342,356 carbon credits held in inventory by the company. At the time of tagging, Base Carbon now holds approximately 1.1 million CORSIA-eligible carbon credits, all subject to the project agreement and revenue-sharing arrangement with DelAgua.

The company is working closely with DelAgua and relevant counterparties to secure insurance coverage on the remaining untagged carbon credits (approximately 640,000) previously issued and currently held by DelAgua, which are subject to the revenue-sharing arrangement with the company. Upon completion of the insurance process and satisfaction of applicable requirements, these carbon credits are expected to be tagged by Verra as CORSIA eligible.

"Together with our project partner, DelAgua, we continue to advance initiatives intended to maximize the value and marketability of the project's issued credits, supported by the operational excellence DelAgua has consistently delivered on the ground," added Mr. Costa. "Securing insurance coverage on the remaining 640,000 credits held by DelAgua represents an important next step toward extending CORSIA eligibility across the project's full issued inventory."

Going forward, the Rwanda cookstoves project is anticipated to generate approximately 2.6 million additional carbon credits on regular six-month intervals during the rest of the project's crediting period, all of which the company excepts to become CORSIA eligible.

About Base Carbon Inc.

Base Carbon provides capital, development expertise and management operating resources to projects involved in the global carbon markets. It 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.

We seek Safe Harbor.