Greenearth Energy Ltd.

Quarterly Activities Report December 2012

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Corporate Directory

Corporate Directory

Directors Mark Miller (Non-Executive Director)Robert J. Annells (Non-Executive Chairman

John T. Kopcheff (Non-Executive Director)

Samuel Marks (Managing Director)

Company Secretary

Leslie Smith BBS, MBA, CPA, CA (NZ)

Address for CorrespondenceLevel 14 P.O. Box 24500 Collins Street Collins Street WestMelbourne Victoria 3000 Victoria 8007 Telephone: (03) 9620 7299 Email: greenearth@greenearthenergy.com.au

Facsimile: (03) 9629 1624 Web site: www.greenearthenergy.com.au Securities Exchange Share RegistryAustralian Securities Exchange Limited Computershare Investor Services Pty. Ltd.Level 45, South Tower, Rialto Yarra Falls 452 Johnston Street525 Collins Street Abbotsford Victoria 3067Melbourne Victoria 3000 (03) 9415 5000ASX code: GER Auditors Pitcher Partners

Legal Advisors Baker & McKenzie

Bankers Westpac Banking Corporation

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Highlights

Highlights

• Continued execution of the recommendations outlined in the June 2012 Business Review;

• Implementation of sales strategy for growth and development of Energy Efficiency business;

• Visit by Jacob Karni and David Banitt for NewCO2 Fuels (NCF) project;

• Renewed application and extention of ETIS grant for the Geelong Geothermal Power Project;

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for the Latrobe Valley project;

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Introduction

The second quarter of 2012/13 saw continued internal focus and strengthening across the Greenearth Energy (‘GER’) consolidated group. The group’s long term strategy remains unchanged, with efforts

under-writing the longer lead-time entities of the business (Geothermal, NewCO2 Fuels and Greenearth Solar Energy). After Q1 saw GER implementing various strategic and management changes to achieve these goals, the second quarter focused on consolidating these changes whilst ensuring the business was building a strong platform for success in the second half of 2012/13 and beyond.

During this second quarter, managements day-to-day focus was centred around growing the opportunities-

Australian Renewable Energy Agency (ARENA) for the geothermal projects in Geelong and Latrobe Valley. Essential in this process was working with the Victorian state government to successfully obtain an extension for our $25m ETIS grant which was confirmed in late December 2012. Further to our announcement on the 29th January, it is with great sorrow we saw the passing of Dr Les Erdi, OAM on the 26th January, 2013. A director and valued member of the Greenearth Energy team, it was a truly humbling experience to be able to get to know Les during his involvement with Greenearth. Les had focused much of the past 6 months of his life dedicated to seeing the success of the NewCO2 Fuels project and we will strive to see this come to fruition as he had dreamed. His energy, passion and determination were extremely enviable qualities that we all learnt from and he will be sorely missed.

The business continues to generate exciting opportunities in the clean energy space and the achieve-.

The following pages outline the progress achieved during the quarter.

SIGNED ON BEHALF OF GREENEARTH ENERGY LTD.

Samuel Marks Managing DirectorGreenearth Energy Limited 31 January 2013

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New CO2 FuelsThe past quarter was highlighted with a visit by Professor Jacob Karni and David Banitt (CEO) to Australia in early December, along with the NewCO2Fuels Ltd

the demonstration unit in the Solar Tower within the Weizmann institute.

From a technical development focus, the past quarter saw the NCF team in Israel advance various aspects of the R&D phase across the following areas;

1. Fabrication of the solar receiver;2. Final stages of design of the solar reactor;3. Establishment of the testing facility within the Solar Tower;4. Development of the hardware designs and software implementation of the control systems;5. Ongoing patent protection across the globe.

The visit by the Professor and Mr Banitt was focused around future business de-velopment and promotion of the technology and included meeting potential ‘stage 2’ partners for NCF for involvement with the project post proof of demonstration. Meetings were held with some of Australia’s most prominent ‘blue-chip’ companies and key potential partners provided exciting feedback which has been passed on to the team in Israel by its leadership team.

Included during this visit were discussions with various government and non-

Scientist of Australia, Professor Ian Chubb, Professor Robin Batterham, Kernot Professor of Engineering at Melbourne University and Professor Chubbs predecessoras the Chief Scientist of Australia from 1999 to 2006, and the Chief Scientist of New Zealand, Sir Peter Gluckman. A key site visit was to the Latrobe Valleys Hazelwood power station, a 1.6GW brown coal power plant which, due to the high water content of the brown coal utilised by the station, sees this power plant as one of the largest emitters of CO2 in Australia and subsequently an potential partner for the NCF technology once the R&D phases are completed.

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New CO2 Fuels cont.

In 2011 Greenearth Energy secured an exclusive worldwide Research and Licence Agreement for a revolutionary technology that has the ability to convert CO2 emissions-to fuel. GER ‘s investment is represented by a 42.5% ownership in a subsidiaryary of NCF.

The CO2 to fuel conversion technology concept, successfully developed in Israel by Professor Jacob Karni and his group at the Weizmann Institute of Science, and proven in subsequent extensive laboratory trials, involves a new method of using concentrated solar energy for the dissociation of carbon dioxide (CO2) to carbon monoxide (CO) and oxygen (O2).

The same system can also dissociate water (H2O) to hydrogen (H2) and oxygen (O2), at the same time it dissociates the CO2. The CO, or the mixture of CO and H2 (called Syngas) can then be used as gaseous fuel (e.g. in power plants), or converted to liquid fuel (e.g. methanol or other transportation fuels), which has the potential to be stored, transported and used in motor vehicles. The oxygen producedcan be used in the combustion of the clean fuel, or elsewhere.

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Urbain du Plessis. As detailed in the previous Quarterly Activities Reports, Urbain has brought with him a wealth of knowledge, skills and experience from over 25 years in the high-end lighting sector around the world. His roll is predominantly around business development and sales, along with product development and the establishment of key supply chain and operational controls.

The main focus during the past three months was to bed down the initial wins from the previous quarter off the independent results of the Linfox / Goodman warehouse in the Hazelmere in Western Australia (refer attached except from the Linfox Solutions quarterly magazine - December edition: http://www.linfox.com/News-and-Media/~/media/Solutions%20Magazines/Solutions%20December%202012%20

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cont.

-ing project for a large General Mills Ltd food processing facility in New South Wales. As a US Fortune 500 company, General Mills is one of the largest food manufacturers in the world, owning brands such as Cheerios, Old El Paso, Latina Fresh Pasta and Betty Crocker. The facility saw impressive energy saving results with extremely positive feedback from management. Further discussions are underway with the service providers about additional opportu-nities within this group.

sales approaches; Original Equipment Manufacturers (OEM’s) and Turn-Key solutions. The OEM focus revolves around the sale of the Metrolight technology

The past quarter saw GEE reinvigorate relationships with some of Australia’s largest lighting manufacturers and distributors, as well as developing key relationships with some of the global players in the industrial, warehouse, mining & sports lighting OEM sectors. The turn-key solutions strategy is in line with the Linfox and General Mills model where GEE provides an ‘end to end solution’ of the

full capacity of the Metrolight system.

As mentioned in the previous Quarterly Activities Reports, GEE is in the process of

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applying to become a creator of Victorian Energy Efficiency Certificates, in linewith our current Energy Saving Certificate accreditation in NSW. After submitting the application at the end of the prior quarter, we are eagerly awaiting feedbackfrom the Victorian Government to hopefully progress this early 2013.

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Geothermal Energy

with the current economic constraints and lack of investment from the private sector due to the early stage nature of the high risk industry. Subsequently, the previous quarter was spent reviewing opportunities to attain an extension of current state funding approvals and obtain new federal government funding to progress our two key geothermal opportunities in Victoria; the Latrobe Valley and Geelong.

Greenearth Energy continues to drive both the Geelong Geothermal Power Project (GGPP) and our Latrobe Valley Consortium (LVC), especially in the area of sourcing the large level of investment required to develop the projects. We formalised the consortium for the Latrobe Valley, whilst continuing discus-sions with the Victorian Department of Primary Industries (DPI) to request an extension of the $25m Energy Technology Innovation Strategy (ETIS) grant which was originally granted in 2009.

The process to bring these two opportunities to fruition is one which takes time and a dedicated group of supporters at all levels. This company was formed on the back of proving that geothermal energy has the capabilities in Australia

viable price. We still believe this is the case.

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Geelong Geothermal Power Project (GEP 10)At the end of last year GER received formal notification from the Victorian Government that we had successfully been given an extension of time to raise the additional funding required to match the $25million grant under the ETIS grant. This is a key step towards bringing the GGPP to fruition and has subsequently provided the opportunity to prepare a second Expression of Interest to the federal government under its $3.2 billion Australian Renewable Energy Agency (ARENA), as a part of its Clean Energy Future package.

Greenearth had previously applied for funding towards the testing and develop-ment of a geothermal well in withing the GEP 10 permit zone under the Austral-ian Government’s $126 million Emerging Renewables program, however this was unsuccessful due to various factors which we are looking to rectify in this new application to ARENA during the 3rd quarter of this year (February 2013).

Background on the project: In November 2011 Greenearth Energy successfully concluded negotiations with the Victorian State Government and executed the $25 million funding agreement for the GGPP. The $25 million Victorian Government grant funding was awarded in December 2009 under the government’s Energy Technology Innovation Strategy (ETIS). The funding was awarded to assist two stages of the GGPP development, with $5million of the $25million to be utilisted towards establishing Proof-of-Resource, and the further $20 million awarded for Stage 2 being a grid connected 12MWe hot sedimentary aquifer (HSA) geothermal energy demonstration plant.

Subsequent project partners have been developed including Alcoa of Australia, Leighton Contractors, Holcim Australia and Lakes Oil N.L.

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Latrobe Valley Region (GEP12 / GEP13) Further to previous unsuccessful applications under the Australian Government’s$126 million Emerging Renewables program, Greenearth received

Expression of Interest (EOI) for funding for the Latrobe Valley region of Victoria upon establishment of the new federal governments $3.2 billion Australian Renewable Energy Agency (ARENA). Off the back of this recommendation, a consortium was formed in the Novermber 2012 with Monash University, University of Melbourne and Intrepid Geophysics, whilst also supported by experts from the University of Adelaide, ANU and the Institute of Earth Science and Engineering (IESE) University of Auckland New Zealand. Greenearth Energy (exploration permit holder), has taken a more minor role in this project however will continue to work with the consortium through-out the life of the project.If successful in obtaining funding, the project will utilise Victorias / Australia’s best geoscience bodies to assess the potential productivity of geothermal reservoirs prior to drilling expensive deep wells. It has the potential to, if successful,reduce exploration drilling risk and address one of the biggest challenges facing the geothermal industry.

This updated consortium has the opportunity to combine some of the topacademics and newest technologies across the geothermal industry with the intent

, yet also the geothermal industry across Australia. The project will be focused on the Latrobe Valley

The Project will focus on Victoria’s Latrobe Valley where work by Greenearth

new geothermal province close to transmission infrastructure.The Latrobe Valley is an exciting geothermal prospect as thick insulating coals overly the hot sediments. An innovative geoscience program will integrateadvanced and emerging geological, geophysical and petrophysical technologies to understand the potential native productivity and the potential to enhance this through stimulation. Matrix, fracture and fault permeability will be differentiated. An advanced uncertainty analysis, will be developed to quantify uncertaintities.Success will lead to greater exploration success for the Australian geothermal industry and a decision regarding a deep well in the Latrobe Valley.

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Other InformationGreenearth Energy continues to receive monthly installments from Erdi Fuels Pty Ltd, as detailed in the 30 June 2012 Annual Report. These cash inflows, together with receipts collected by Greenearth Energy Efficiency; will enable the business to continue to execute our strategy.

directors, Dr Les Erdi, Erdi Fuels Pty Ltd will nominate a replacement for Dr. Erdi in due course.

On the 31st December, 2012, Greenearth energy appointed a new Company Secretary, Mr Leslie Smith. Mr Smith is the company secre-tary of Lakes Oil N.L and replaces Ms Vicki Kahanoff. We welcome Leslie on-board and look forward to working with him going forward.

At the date of this report, Greenearth Energy has approximately 1,169 shareholders, with a issued capital structure of:

Total Listed Ordinary Shares 113,069,913Total Unlisted Options 13,000,000

SIGNED ON BEHALF OF GREENEARTH ENERGY LTD.

Samuel MarksManaging DirectorGreenearth Energy Limited31 January 2013

The images contained in this document are of a generic nature and are not intended to be

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