Good morning, ladies and gentlemen. Welcome to the Ence fourth quarter 2025 results presentation. I will now hand over to Mr. Ignacio Colmenares, Executive Chairman and CEO, and Alfredo Avello, CFO. Gentlemen, please go ahead.
Good morning, good afternoon, and welcome to Ence's fourth quarter and full year 2025 results presentation. Thank you for joining us. I am Ignacio Colmenares, Executive Chairman, and today I'm joined by our CFO, Alfredo Avello, and our Head of IR, Inés Álvarez. Let me start with a strategic picture of our overall objectives. Our plan is simple to describe and rests on four pillars. First, growth in higher margin special pulp, substituting BSKP. Second, local wood and biomass sourcing. Third, cash cost efficiency. Fourth, renewables EBITDA growth, leveraging our position as the largest collector and manager of biomass in the Iberian Peninsula. Slide four summarizes the year 2025 and the fourth quarter. It captures the progress we are making on all pillars of the strategy.
The pulp price environment was challenging for much of the year, but we saw a clear turning point at the end of the fourth quarter. At the same time, we kept moving the business forward. We improved our cash costs, increased the share of special pulp, substituting BSKP, and continued to increase the renewables platform to deliver stronger results. In our pulp operations, we delivered cash costs of EUR 477 per ton in fourth quarter, and EUR 483 per ton in 2025. Our lowest cash cost since 2022, despite the impact of the Pontevedra strike. The cash cost improvement reflects structural actions in wood, logistics, and harvesting, process optimization and productivity, combined with tighter operational execution and a continuous improvement culture.
On product mix, special pulp substituting BSKP reached 30% of total volumes sold in 2025, up 7 percentage points year-on-year, with a margin uplift of EUR 37.37 per ton versus standard BHKP. The increase in special pulp substituting BSKP volumes was a result of targeted customers programs, product development, and qualification work, and our ability to tailor fiber properties to end-user requirements. We are positioning Ence as a solutions provider rather than a standard commodity supplier. We also took a strategic step into fluff, becoming the only non-BSKP producer in Europe. We started the ramp-up in fourth quarter 2025 with 125,000 tons of capacity. On renewables, biomass to electricity generation increased by 6% year-on-year, up to over 1.2 terawatt-hour, and renewable industrial heating secured three landmark contracts in 2025.
I would also like to highlight that Magnon's biomass to regulated electricity business has posted an EBITDA of EUR 10 million for two consecutive quarters, third and fourth quarters, leading to an annualized EBITDA of EUR 40 million, to be increased by an additional EUR 10 million with the updates of the regulatory parameters, which came into force in January 2026. In biomethane, La Galera delivered a 27% increase in annual production through operating initiatives and not through CapEx, reinforcing the value of operational know-how and the scalability of this platform with 42 projects in the pipeline, of which 25 are under permitting phase, late permitting phase.
Financial speaking, the group's consolidated EBITDA was EUR 83 million in 2025, and EUR 13 million in fourth quarter 2025. Pulp EBITDA was EUR 56 million, and Renewables EBITDA was EUR 27 million. Magnon alone, EUR 32 million. Alfredo will explain this in more detail.
We also acted proactively on financing. We registered a new EUR 200 million MARF bond program in January 2026, and completed the first EUR 85 million issuance with a four-year bullet maturity and a 410 basis points coupon, refinancing all debt maturity in 2026 in the pulp business. In 2026, we see a more constructive market set up versus mid-2025, supported by firmer price momentum and a more balanced supply response. Operationally, we expect further progress on competitiveness with a structurally improved cash cost profile and guidance of EUR 468 per ton for 2026 cash costs. Alongside, continued mixed upgrades towards close to 40% of special pulp substituting BSKP. In renewables, the updated remuneration parameters for 2026-2028 support a higher regulated electricity run rate.
We expect several industrial heating projects to reach startup during 2026, and the biomethane pipeline will continue to advance. Putting it all together, these numbers show why the plan matters. Local wood supply, special pulp mix upgrade, cash cost reduction, and renewables EBITDA growth executed with capital discipline and balance sheet resilience. Our priorities for profitable growth are clear. Expand Ence, special pulp substituting BSKP, reduce cash costs, and convert our renewables pipeline in contracted long-duration cash flows. Slide six considers gross pulp prices in Europe and the market context behind the recent move up in hardwood pricing. The market has been tightening since the end of last year. The year-end six BHKP benchmark in Europe closed around $1,100 per ton. The average in 2025 was $1,086 per ton gross prices.
Since last December, main producers have announced several price increases of up to $1,330 per ton gross. Importantly, this pricing momentum is being supported by a solid demand and a supply side that is constrained, particularly in Indonesia. The Indonesian government revoked forestry permits for 22 pulp wood plantations in West and North Sumatra, with potential long-term annual losses of 4 million-8 million tons of wood chips, equivalent to 1 million-4 million tons of BHKP. From an operational standpoint, weather-related disruptions in Indonesia have also reduced short-term pulp availability and made fiber procurement more difficult. These disruptions are not happening in isolation.
Analysts estimate that the broader set of disruptions across the value chain could lift demand for market pulp by approximately 650,000 tons in 2026, in addition to demand already strengthened by fiber-to-fiber substitution and increased standards of living. At the same time, higher fiber costs are flowing through the system. Wood chip prices in China increased once the extent of the Indonesian damage was assessed, and eucalyptus wood chip prices rebounded in early February to recent November highs after a 21% spike since July due to heavy rains affecting harvesting. Overall, the message is clear. The market backdrop supports firmer hardwood pulp pricing, driven by a combination of solid demand, supply constraints, and higher fiber costs. That is precisely why our strategy is built around cost, fiber security, and disciplined growth in special pulp substituting BHKP.
Continuing with slide seven, our product strategy is progressing well as a key differentiator. In 2025, special pulp substituting BHKP accounted for 30% of sales volume, compared with 23% in 2024. These products deliver higher margin, EUR 37.37 per ton above standard BHKP in 2025, as they substitute higher cost softwood alternatives in multiple applications. These products are not a marketing label. They are an economical lever. When customers use our grades to substitute softwood pulp, they do so for performance reasons. That performance allows pricing discipline and over time, a structurally higher margin than standard hardwood pulp. We are also achieving our goals on fluff. In the fourth quarter, we started the ramp-up of our first 125,000 tons eucalyptus fluff pulp line, substituting BSKP fluff.
This is strategic because fluff typically trades at a meaningful premium versus standard hardwood pulp, and we expect it to generate even greater margins as volumes ramp. The priority now is product homologation. We are making progress on eight different processes. Fluff ramp-up is not just a startup story, it's a market access story. Qualification takes time, but once approved, volumes tend to be sticky, and the product can remain in more stable demand and markets linked to the aging population and improved hygiene habits worldwide. Looking forward, our mix ambitions are clear. We expect special pulp substituting BSKP to increase towards close to 40% in 2026, and to exceed 62% by 2028, supporting a structurally higher margin profile. As a special pulp substituting BSKP rises, our exposure to pure BSKP pricing decreases.
Ence's position in the global cash cost curve improves, and the business becomes more resilient through the cycle. Let me turn now to cash costs and competitiveness in slide eight. In 2025, cash cost was EUR 483 or EUR 478 per ton, excluding the impact of the fourth quarter strike in Pontevedra, and improved meaningfully compared to the 2022 peak. This was the result of tangible actions, local wood sourcing and process optimization, as well as operational improvements. We are not stopping there. We are focusing clearly on further reductions. Ongoing initiatives are expected to reduce cash costs by additionally EUR 30 per ton during 2026 and 2027, with 2026 cash cost guidance at EUR 468 per ton.
This 30 EUR per ton improvement is mainly based on the combination of our efficiency and competitiveness plan that accounts for 22 EUR per ton, and the Navia cost reduction and decarbonization initiative that accounts for the remaining 8 EUR per ton. On the efficiency and competitive plan, we aim to deliver an average annual saving of around 22 EUR per ton, to be implemented between 2026 and 2027 through process reengineering, operational streamlining, and digital and AI-enabled optimization. The work streams are very practical and execution-driven. 15 headcount rationalization, improving yields and consumption ratios across wood, chemicals, and energy. Raising reliability by cutting unplanned downtime, strengthening procurement, and contracting discipline on key inputs and services, and simplifying the organization. Specifically, agreements have been reached regarding corrective dismissal procedures.
In total, 141 posts will be amortized through voluntary departures, early retirements, and reallocation to other growing business units within the group. On Navia, remember that we are executing a dedicated cost reduction and decarbonization program. The project was launched in first quarter 2025, and we expect commercial operation in second quarter 2026, achieving roughly EUR 8 per ton of annual savings in the second half of 2026. Taking together, these initiatives underpin the expected EUR 30 per ton cash cost reduction over 2026 and 2027, with approximately EUR 15 per ton targeted in 2026, supporting our guidance of around EUR 468 per ton cash cost. As you can see in slide nine, our strategic goal is simple. We are not only lowering costs, we are improving what we sell.
Together, these moves are designed to place Ence as the most competitive producer on a BSKP substitute basis, and to improve earnings quality throughout the cycle. Our cash cost reduction programs not only lower our cash cost base, but also strengthen our relative position on the curve in down cycles and increase our operating leverage in up cycles. As regards monetization, in slide 10, we completed the sale of energy saving certificates, CAEs, for a net amount of EUR 40 million in 2025, fully cashed in. We also expect to register and cash additional CAEs in 2026, amounting approximately EUR 10 million, of which EUR 6 million are cashed in the first quarter of 2026. We treat CAEs as value realizations from operational excellence rather than a substitute for the underlying strategy. They support cash generation, we do not build a business plan around them.
Strategy is designed to be repeatable and resilient. One-offs may help in specific years, but the pillars, local wood supply, product mix, cost, and diversification drive the long-term trajectory. Let me now turn to renewables in slide 11, which is the second strategic engine of the group. Regulated biomass electricity provides a stable earning base, and we have a regulatory tailwind. Recent updated remuneration parameters, starting in January 2026, improve remuneration for biomass to electricity and cogeneration. For our portfolio, this translates into an incremental run rate, EBITDA of around EUR 10 million, taking the regulated electricity run rate closer to EUR 50 million. Having said that, please note that we experienced extraordinary and constant heavy rains in the Iberian Peninsula in late January and early February 2026. This affected the quality of the biomass and challenged our operations. Everything has come back to normal and is going well now.
Continuing with slides 12 and 13. Beyond regulated electricity, we are scaling to business verticals. First, renewable industrial heating. Our target is 2 terawatt-hour of thermal energy supply by 2030, and the contribution of over EUR 40 million to EBITDA. Today, we have 1 contract in operation, 1 in startup, and 3 projects in construction, with a disciplined pipeline and required returns of above 11% ROCE. As a result, we expect 4 industrial heating plants to start operations this year. Second, biomethane. We continue to build a biomethane platform in Spain, which will produce more than 1 terawatt-hour of biomethane by 2030, and contribute over EUR 60 million to EBITDA, with return discipline above 12% ROCE. This pipeline is substantial, with 25 projects already in the late permitting phase and a total pipeline of 42 projects. Biomethane leverages on long-term BPAs.
Over time, this creates an infrastructure-like business vertical with scalability returns. All these are long duration infrastructure-like businesses, anchored in local biomass supply chains, precisely where we have solid structural advantages. I will now ask Alfredo to summarize our financial position.
Thank you, Ignacio, and hello, everyone. When looking at 2025, you will see two realities at the same time. First, the headline EBITDA is lower year-over-year because 2024 benefited from a much stronger pulp price environment. Second, the delivery of our strategic targets continued. We increased the weight of our special pulp. We launched our first pulp line. We continued to cut cash cost, and we kept building our renewable biomass backbone growth platform. With that in mind, let's start with the income statement on slide 15, where you can see the headline figures for the year and for the fourth quarter. At group level, revenues reached EUR 747 million in 2025. Pulp revenues were EUR 544, and renewable revenues were EUR 206.
The variation in revenues year-on-year is explained by the lower net pulp price compared to the previous year, partially offset by higher contribution from our renewables platform, despite its also lower prices year-on-year. Moving to profitability, consolidated EBITDA was EUR 83 million in 2025, including EUR 13 million generated in the fourth quarter, 6% higher than that of the fourth quarter 2024. To put that in context, 2024 delivered EUR 164 million EBITDA, being the year-on-year delta, essentially, the pulp pricing cycle, partially mitigated by our cost and product mix actions and by significant value capture initiatives, such as the monetization of energy efficiency certificates. Let me now unpack pulp first, because that's where the cycle is most visible. In pulp, EBITDA was EUR 56 million in 2025, compared to EUR 138 million in 2024.
The main driver is the net pulp price environment. The reference price for short fiber pulp averaged $186 per ton in 2025, compared to $1,236 in 2024. In the fourth quarter, the average was around $1,070, and the European PIX gross price closed the year around $1,100. The bottom point is not just what the average was, but what the end of the year trajectory is. Producers have already announced price increases into 2026, reaching up to $1,330, reflecting a timing supply-demand balance. While the price cycle is exogenous, the mix and cost are not, and 2025 is a year where we will see a measurable progress on both.
First, regarding mix, our special pulp that substitute more expensive long fiber pulp, accounted for 32% of sales in Q4 2025, versus 24% in Q4 2024. This special pulp generates an incremental margin of around EUR 37 per ton versus standard pulp. Second, in the fourth quarter, we started up with customer qualification processes for our first fluff pulp line, with capacity of up to 125,000 tons. Third, cash cost in the fourth quarter was EUR 477 per ton, versus EUR 521 in the same period last year, including the December pulp price strike. Beyond the EBITDA line, you can see how the cycle flows through the net income. As a result, pulp business recorded a net loss of EUR 42 million in 2025, including a provision related to our efficiency and competitiveness plan of EUR 24 million.
On renewables in 2025, energy sales volumes increased by over 6% to over 1.2 GW, the full quarter production rose almost 10% versus the same quarter of last year. Revenue also increased by around 5%, up to EUR 206 million for the full year. EBITDA was EUR 27 million in 2025, up 4% year-on-year, EUR 10 million in the fourth quarter, including approximately EUR 1 million of development and ramp-up costs for growth platforms, biomethane and renewable industrial heating. The base biomass into regulated electricity business showed a solid performance, reaching EUR 20 million EBITDA in the second half 2025, therefore increasing its run rate average up to the 40s. Additionally, the recent regulation updated will increase it up by approximately EUR 10 million per year for a target production of 1.4 GW.
Below EBITDA, renewables reported a net loss of EUR 15 million for the year, including a specific impairment charge on a PV development project, partially offset by tax credits. Turning now to slide 16, let's enter into cash flow. In 2025, we achieved a positive free cash flow before working capital variation and growth and efficiency CapEx of EUR 12 million, while executing EUR 59 million of growth and efficiency CapEx and maintaining our asset base. Let me walk you through the underlying dynamics. In the pulp business, operating cash flow was EUR 55 million in 2025, versus EUR 87 million in 2024, consistent with the lower price environment. In the fourth quarter, operating cash flow was EUR 16 million, up from EUR 9 million in the fourth quarter 2024, showing the benefit of improved cash cost and special pulp mix.
In the renewal business, operating cash flow in our accounts was EUR 9 million before the EUR 14 million of CapEx related to the industrial heating business that are registered as inventory changes rather than in the CapEx line, since the assets will be finally acquired by the customer. Working capital improved in this business by EUR 11 million due to lower IRs level in the said lower price environment. Regarding CapEx, total investment was EUR 114 million versus EUR 125 million guidance. Of which EUR 59 million are strategic. Namely, in the pulp business, we're including the new fluff line or the Navia cash cost reduction and the carbonization project, and the renewables, the industrial heating, and the biomethane development.
Regarding cash flow, importantly, for 2026, following the Constitutional Court decision on the limitation of tax loss offset, we expect a cash refund of roughly EUR 23 million related to activity tax losses. This is a tangible cash relevant item expected for first half 2026. Turning now to slide 17, the message is straightforward. Strong liquidity, long-term maturities, covenant-free in the pulp business, and a capital structure that supports a strategic execution. At the end of 2025, consolidated net debt was EUR 378 million, compared with EUR 321 million at December 2024. Primarily explained by our investment program and by working capital movements. Importantly, we closed the year with EUR 241 million of cash on the balance sheet, which provides optionality. It allows us to proceed with CapEx after working capital trends and still remain in control of the balance sheet.
We also actively manage market risks that could otherwise translate into balance sheet volatility. On FX, we maintain a rolling hedging policy to reduce the impact of euro-dollar volatility on pulp results. In 2025, that policy delivered EUR 8.4 million of positive settlements. For 2026, we have hedged a nominal amount of EUR 80 million, $80 million, sorry, with an average cap around 1.19 and a floor around 1.16 dollars per EUR. On energy price risk inside renewals, we also use hedges designed to replicate the regulated methodology, aiming to stabilize returns. In 2025, hedges covered around 60% of biomass generation, and hedge settlements offset the deviation between the market prices and the regulators' estimate.
If you look at the maturity schedule on the right of the slide, the key takeaway is that maturities are spread over time, reducing refinancing claims. Together with the fully available 150 million EUR revolving credit facilities, this provides a liquidity buffer that is meaningful relative to the volatility of commodity markets. At the beginning of 2026, as our Executive Chairman has said, we have registered at the market a 200 million EUR four-year bullet bond program, with the aim of continuing with the diversification of our financial resources. Our first issuance was successfully launched, placed, and oversubscribed in February, ending at 85 million EUR, with a fixed coupon of 110 basis points maturing in 2030, and fully absorbing all the financing needs for the whole year 2026.
This is a clear signal from the investor community of the reliability and resiliency of our company, even in the low part of the cycle. After covering the financial and balance sheet performance, I want to step back and show you how our sustainability leadership reinforces competitiveness and protects returns in the slide 18. Ence's view is pragmatic. Sustainability is a tool to be more competitive and to capture returns. Let me make the connection explicit. Each pillar links to value creation, each reduces a category of risk. First, eco-efficiency operations. This is about operational stability and cost. In 4Q 2025, we achieved historic performance of zero odor minutes raised in Navia, we also achieved a historical record for the lowest specific water consumption. We maintain 100% zero waste certification across our pulp and energy sites.
In Pontevedra, our water recovery system completed its third year of operating, improving resiliency to draught risk. These are operational KPIs, but they translate into fewer disruptions, lower compliance risk, and a stronger social license. Second, byproducts and ecosystem services. This is about top-line potential and strategic positioning. You have already seen that 32% of our sales in 4Q 2025 came from a special pulp, substituting more expensive BSKP with higher margins and growing demand. In the quarter, we achieved three new sustainability certifications for fluff pulp, reinforcing market access and customer preference. On forestry, byproducts, and ecosystem services, we continue to improve plant material, including the development of new eucalyptus clones better adapted to climate change, and we also expanded the registration of forest carbon sinks over 4,300 hectares.
This is about building long-term asset base with increasing optionality and monetization pathways, while maintaining biodiversity and responsible management. Third, responsible supply chain. This is about being the preferred counterparty. 100% of sites certified under the SURE system for sustainable biomass. In 4Q 2025, we deployed a new third-party due diligence procedure to reduce risks related to human rights and environmental impacts along the supply chain, and we also obtained PEFC certification for biomass trading. These measures reduce reputational and compliance risks. Fourth, positive social impact. This is our talent and community stability, which is, again, a risk and return topic. Our safety performance is well above sector benchmark, as you can see in the slide. On talent, 30% of managerial positions are held by women, and 41% of jobs opening were filled through internal promotion. This is a sign of organizational strength.
On community engagement, we launched a new edition of the Pontevedra Social Plan, supporting 240 initiatives. In the rural communities, we provided more than 950 technical advisory sessions to forest owner and deliver a new edition of forestry machinery training. These actions strengthen the ecosystem in which we operate and reduce long-term operational risk. As said, Ence sustainability leadership is not about scoring well on ESG frameworks. It is about increasing returns and lowering risks. Let me hand back the lead of the presentation to our Executive Chairman for the closing remarks.
Thank you, Alfredo. Let us finally look at slide 20, with the outlook for 2026 and some closing remarks before inviting your questions. Putting all of this together, our strategy is consistent and disciplined. One, increase volumes of special pulp substituting BSKP. Two, look at wood supply. Three, reduce cash costs. Four, expand renewables platform EBITDA, while protecting the balance sheet and maintaining capital allocation discipline. To summarize the year and the setup for 2026, I wish to highlight four messages, each one part of our strategy. First, the pulp market is improving. We are not waiting for the cycle. We are positioning Ence to perform throughout the cycle. Hardwood price momentum strengthened in early 2026. Demand is solid. The supply side is temporarily constrained, including the Indonesian fiber disruption we discussed. That supports a more constructive pricing environment versus 2025.
Second, our mix upgrade continues. We expect special pulp substituting BSKP to increase volume to close to 40% in 2026. Key priorities will be with the fluff ramp-up and continued qualification work. Our objective is to deliver structurally higher margins by substituting softwood pulp. Over 62% of our sales will compete against BSKP by 2028, positioning Ence as the lowest cost producer in the BSKP cash cost curve. Third, we are following a clear operational plan for improved competitiveness. We are reducing cash costs to around EUR 468 per ton for 2026, supported by our efficiency and competitiveness plan and the Navia cash cost reduction initiative, and we remain focused on execution. Fourth, the renewables platform continues its diversification, pushing for growth, more than tripling its contribution by 2030.
The operational improvements in second half of 2025 and the updated regulatory parameters support a higher run rate for the regulated electricity business. We expect four industrial heating projects to start up during 2026. Our biomethane pipeline will continue to advance. Thank you. We now invite your questions.
Thank you. Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press star one on your telephone keypad. You will have the opportunity to ask all the questions that you may have. We kindly ask you to ask only one question at a time to our speakers, instead of asking multiple questions at the beginning. You may queue by pressing star one again. Thank you. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Alvaro Bernal from Alantra. Please go ahead.
Hi, thank you for taking my questions. I have a couple. The first one is regarding the biomethane platform. I've seen you push back targets over a year. If you can give us more color on what problems you're encountering here and what makes you comfortable with meeting your current targets. The second one is a quick one. It's just about the commercial discounts that have been agreed this year. If you can give us some disclosure regarding this, it would be very helpful. Thank you.
Yeah. Thank you very much. Yeah. Regarding our biomethane platform, we have eight plants who have almost what we call in Spanish, the AAI, Autorización Ambiental Integrada. Everything has been done. Everything. Now is the administration who has to move. Some are in Catalonia, some are in Aragon, some are in Castilla y León. The fact is, it is not moving. The administration is going very, very slowly. None of these eight projects have social opposition. We expect them to be ready to build by mid 2026 or on the second half of 2026. Then we will start construction, I would say one of them, not the eight at the same time, but to be prudent.
We think that we will start construction by the end of the year, but not before. That's the vision we have today, that's what we have reflected on the presentation in slide 13. If things move quicker, well, we will go faster. Regarding your other questions, yeah, it's interesting to talk about discounts. Yeah. European gross pulp prices closed the year at $1,100, as you know, the discounts last year were on the range of 48%-49%. There were a deficit on the discounts in the negotiations for 2026, as those negotiations were between December and January. I would say that in general terms, BHKP has been sold by the market at an average discount of 53%-54%.
By two reasons, you will see on our figures a lower discount. This 40% special pulp substituting BHKP we are selling, is sold at a higher price, and then it diminish the discount. Secondly, the less standard BHKP pulp we have, the better prices we get, because what we are changing is, let's say, the worst customers, the worst destinations with this special pulp. That is why within this year, as I told you, we will see between 51% and 52% discount for entry.
Understood. Thank you.
Thank you. Once again, that is star and one to ask a question. Your next question comes from the line of Cole Hathorn from Jefferies. Please go ahead.
Good afternoon. Thanks for taking my question. You've got a lot of moving parts impacting your cash flows in 2026. I was just wondering if you could just remind us all nicely, the key moving items. You know, you've got the benefit from your tax losses, you've got various other items. Would you mind just listing the cash flow impacts and then also giving us some color of how you think about CapEx in 2026?
Let me give you a rough figure, and then Alfredo can go on more detail. As extraordinary incomes, we have, as you mentioned, the EUR 23 million of taxes. We think we are going to collect that quite soon. As extraordinary outflows, we have the redundancies. I estimate we are going to have a cash out of between EUR 12 million and EUR 14 million-EUR 15 million this year. As another extraordinary income, we have CAEs, I think, a minimum of EUR 10 million during the year. We have the CapEx. Regarding CapEx, Alfredo will go on details. Well, we are talking about EUR 74 million from the pulp business and EUR 46 million on the renewable business. Maybe, Alfredo, you can give the breakdown.
I have to say that, for most of it comes from things already made or for things that are almost finished. Like in the pulp business, the 74 that Ignacio was talking about, you include, remember the core generation turbine and Navia that have a problem in the past? Well, there's like EUR 5 million there. We have the end payments of the Navia 80 investment that we made also in the past that accounts for EUR 16 million. You have the fluff for around EUR 8 million, and you have the rest of the Navia reduction costs and the conversion project for around EUR 18 million. This, you have all those extraordinary on that part. Regarding the renewable, we are including, as Ignacio was saying, the starting payments of maybe one of the biomethane plant.
We have the biomass trading expansion, and we have the renewable industrial heating. All those projects that Ignacio talked about are all CO2 ones. Sorry, all those projects go in the line of 19. We are also starting with a CO2 development. We are expecting a CapEx of around EUR 7 million in this item. Most of it are kind of either growth or expansion projects that will start up in 2026, or we are starting to invest in them for future customers.
The extraordinary things are the ones that Ignacio has mentioned before.
Yeah, what is important is out of these EUR 74 million in pulp business, EUR 14 million are maintenance. we have to add the EUR 5 million of the repair of the turbine, who failed last year at Navia. As Alfredo was saying, we have outstanding payments of the old project of Navia 80, who was performed a few years ago. we have for growth and for efficiency on the pulp business, EUR 35 million. regarding renewables, well, out of EUR 46 million, EUR 10 million are maintenance, EUR 36 million are for growing.
That's clear. If I follow up with the shift to more speciality grades of pulp, moving the product mix to, you know, 30% this year and 40% next year, it's a big movement in your mix of pulp sales, and congratulations for doing it so quickly. I'm just trying to understand, one of the key benefits for that is when the softwood pulp price is at a substantial premium to hardwood. How do you think about it now that, you know, the gap has narrowed with hardwood rising, particularly in China, off its lows and kind of narrowing in Europe? You know, will there be any challenges getting people to switch down to the speciality grades?
No, we don't see this challenge today. Now, it's five years we are selling this special pulp. We have problems to keep this, let's say, EUR 36 per ton extra margin, when the gap between softwood and hardwood is lower than 150. When this gap is above 150, well, we share the benefits with the customers, and we get these EUR 36 per ton on average. No, we don't see a problem today, and the vision we have is that, well, the gap will continue this year and on the future. Yeah, we see less and less offer in BSKP.
Thank you. Then maybe just following up on, you know, the cash costs. You know, you've been very clear, and it's a helpful slide, you know, from the outside in to see the cash cost development down EUR 15 a ton this year and then EUR 15 a ton next year. I suppose there have been some extraordinary impacts from, you know, strikes in the fourth quarter, you know, a little bit of strikes in Q1, and now that's all resolved and behind you. Are you comfortable with delivering those cash cost numbers, or are you know, are you confident on that delivery and there's upside?
Yes, absolutely. We have checked the number once the strike were finished and before preparing this conference. The impact of the strike in Navia between January and February has been EUR 5 million. Very similar to the strike we had in Pontevedra, another EUR 5 million. EUR 5 million of Pontevedra is in 2025. The EUR 5 million of Navia will be on the first quarter of 2026. When we say 468, is included all the extra costs we have during the strike. Yeah.
That's clear. you know, that's all your own internal help actions that are delivering that. I'm just wondering if there's also any benefit from lower wood costs. I mean, we're seeing some slightly lower wood costs in the Nordics. Well, not slightly lower. We're seeing lower wood costs in the Nordics, and I'm just wondering if there's any downward pressure on wood costs in the Iberian Peninsula?
No, unfortunately not. No. In this decrease of 15 EUR per ton for this year, we see a slight reduction on the cost of the wood. On the price of the wood, we will continue doing what we did last year, is to reduce the cost of the transport and to reduce the cost of the harvesting. At the end, we will keep the prices we are paying to the forest owners. We are reducing logistics, we are reducing harvesting, and we are keeping the price of the wood. There is a very slight reduction coming from this side in this 15 years.
Very clear. Thank you.
Thank you very much.
Thank you. There are no further questions at this time. I want to hand the call back to Mr. Ignacio Colmenares for any closing remarks.
Well, thank you very much all of you for your attention and your questions. We are in contact. Any doubt you have, you can contact Ines, Alfredo, or myself, and we will meet soon at the end of first quarter. Thank you very much, and good afternoon, and good evening.
Thank you. Bye-bye. This concludes today's call. Thank you for participating. You may all disconnect.