The Canadian federal government’s Clean Energy Canada website defines biofuels as “any automotive, domestic, commercial and/or industrial fuel derived from recently living organisms or their metabolic by-products, rather than natural resources, such as petroleum, coal and nuclear fuel. Biofuels can be subdivided into three main categories: solid biofuel, such as peat, wood and wood wastes from industries; liquids biofuel, such as bio-alcohol (ethanol and methanol), biodiesel, and straight or waste vegetable oil; and, gaseous biofuel, which is a mixture of carbon dioxide and methane, also termed biogas.” Canada’s vast peat reserves are currently the most important environmentally friendly energy source. Peat fuel has very low sulphur content and virtually no mercury. The Province of Ontario’s peat resources can provide the energy equivalent of 14 billion tonnes of coal, enough to satisfy the province’s needs for centuries. The Ontario government has committed to eliminate coal fired power usage in Ontario by 2014, leaving a large scheduled shortfall in energy production as coal provided 20% of Ontario’s power in 2007. Using existing off-the-shelf equipment, a cost effective process has been designed to produce peat fuel with a thermal calorific value comparable to coal (9,000 BTU per pound). Combustion tests of coal/peat at Ontario Hydro’s Research Division show that peat has lower ash content and sulphur emissions than lignite which is the coal currently burned at Ontario’s generating stations. Peat Resources Limited (now Cobalt Blockchain Inc.) is a company devoted to establishing the viability of peat as an alternative fuel for existing power stations. IBK Capital has raised a total of $10.5 million of equity capital for Peat Resources. The proceeds from these offerings were used to fund the company’s drilling, sampling and engineering of its peat resources in Ontario, and the construction and operation of a pilot plant in Newfoundland. The Province of Newfoundland and Labrador has significant peat reserves and is working with Peat Resources to plan for a new peat fuel industry which could produce 5 million tonnes of peat fuel per year, generate annual revenues of $750 million and annual net free cash flow of approximately $250 million. Total capital investment, estimated at $800 million, will be spent in four different communities thereby creating 1,000 new jobs. Most of this biomass fuel will be exported to the North-Eastern USA as a clean fuel blend for coal-burning utilities. Pelletized peat can be used to make a high-quality activated carbon product. Since the activated carbon industry is characterized by high growth and high margins, there is strong strategic rationale for Peat Resources to harvest peat for the purposes of producing activated carbon. Peat Resources must assess which entry strategy is best given the opportunities available and the constraints faced by the company. Opportunities include: Create a fully-integrated activated carbon production company Become a supplier of raw materials to current activated carbon producers Enter into a joint venture agreement with an activated carbon producer to develop peat pellet production infrastructure and carbon activation Sell Peat Resources to an activated carbon producer Activated carbon has an average price of $1,900 per tonne and a global market growth of 10% CAGR through 2016. Industry applications of activated carbon include water treatment and purification, decaffeinated tea and coffee, gas and air purification and pharmaceuticals.