Good morning, and thanks to have the opportunity to present here, live at Vestland på Børs. This is also a quarter presentation, so this is quarter two, and we will include that with the company update. So I am Odd Strømsnes, and I'm the CEO of the company. The agenda is, as follows: Introduction, Q2 highlights, status and outlook, summary, and we're rounding up with, Q&A at the end, both from the web and, from the audience if you have any questions. BCS is, then, one of very few pure play CCU companies. CCU, carbon capture and utilization. With a value proposition, I would say, second to none. Local production of sustainable carbon for the world electrification needs. It's a pretty bold statement.
This carbon, which the battery needs, they are today produced with massive greenhouse gas emissions, and they are mostly produced in China. Through our CO2-consuming electrolysis technology, we develop carbon nanotubes, we develop graphite, synthetic graphite, and carbon black. These are all different structured carbons, which is critical for the world's battery production. The focus we have now is on quality and process optimization by stabilizing and controlling our process. We need to be able to document our repeatability, producing the same carbon product over and over again. This is really the essence of what we do From a CCU perspective, we have proved the concept of a complete carbon value chain, as we have produced carbon from CO2 captured directly from flue gas emitted by a large waste incineration plant here in Bergen.
We do see a dramatic increase in the demand, the global demand for batteries. 27% annual growth, or six times increase by 2030. The role of China is totally dominant. However, the role of U.S. and EU will increase to Chinese levels by 2030, with all the current planned European and American ramp-ups. We are talking about a $400 billion global market in 2030, driven primarily by the electric vehicle market, where our sector of production and refinement of the active material part of the batteries is around 40% of that market. We have previously communicated, comparing our green carbon from what we do with the prevailing fossil production, which is done today primarily in China, and this fossil carbon production is driven by petroleum and mining. Obviously, these products have huge and negative environmental impacts and large CO2 emissions.
This is a huge paradox, as the energy transition should be based on global green electrification products. We are, for all practical purposes, talking about the perception of clean batteries, but they are made out of non-sustainable components. As a response to this, EU will create a framework that enables the battery industry to be at the forefront of this green transition. Graphite is defined by EU as a strategic raw material, which means they want batteries with graphite produced at home. The regulations, which they present as a battery passport, intends to prevent and reduce the adverse impacts of the batteries on the environment and ensure a safer and more sustainable value chain for the batteries, while taking into account the carbon footprint of the battery manufacturing and the ethical sourcing of the raw material.
The battery passport will apply to all categories of batteries within the EU by 2027. It is a fair assumption that the batteries with a battery passport made with carbon products from Bergen Carbon Solutions, CNT and graphite, will have, in this context, a competitive edge. This is an overview of today's carbon production of fossil versus green CNT and graphite, and we have shown this graph before as an important message, cannot be said often enough. Our greenhouse gas emissions and our footprint is around zero.
The saving potential towards the existing production is massive, between 10 and 30 times for graphite and several hundred times saving for CNT. As the global CNT and graphite production will increase dramatically on a global scale, as a consequence of the growth in the battery consumption, the world needs urgently a more sustainable carbon production to get these emissions down. The industrial vision of creating a full carbon-based value chain by locally transferring CO2 into valuable carbon products for the battery industry, I would say, is a pretty hefty equity story, and it's second to none in many ways, but it's difficult. This is a true CCU exercise, and we think we have a fantastic equity story in an industry which is very early in its cycle, and that's important to remember.
The battery industry, especially in Norwegian context, European context, is very early in the cycle. The demand for greener and locally produced batteries will grow. We will see an increasing level of regulations to ensure that this is taking place. There are many indications that energy will be more expensive. We think it's a fair assumption that we could see a price premium for our local and sustainable technology. However, the technology entry barrier is high due to the complexity of our process, of our product, and the complexity of the industry as a whole. These are the highlights of Q2. We are continuing and ongoing with the activities for verifying our technology and verifying the product towards customers, and that is key focus, and we do make progress. We are not there yet to say that we have a product meeting all the market specifications.
However, the interest for our technology is vast, and I'm very pleased to say that was firmly confirmed last week, where we entered into a letter of intent with Morrow. The extensive market activity we have done in this quarter, with several ongoing partnership discussions. Our goal is to establish more of these technology agreements going forward. We did complete the construction of a battery laboratory in our office here at Flesland. With successful fabrication, our first reference test cells of the batteries. Our financial numbers, shown here, confirms that we continue to have the finances to execute on our strategic plan. We have a solid cash balance with a cash burn for last quarter of NOK 21 million . This includes the investments of the battery lab, and we would expect to see a reduced cash burn going forward.
In particular, that we have, we have less investments coming up. We have a half-year cash burn of NOK 41 million, and a pretty solid cash position, I would say, of NOK 191 million. Still 0 debts, satisfactory equity position. Our cost control is good, and we anticipate a reduced burn rate going forward. So the status and the outlook of the company. We did announce a technology cooperation agreement with Huchems, a major South Korean chemical company, and we did that in the spring of 2023. And they have provided specifications representing the true market expectations of carbon nanotubes. And this was key for us to really grasp and understand in detail what the CNT market really require. And we have learned a lot by this exercise.
We have delivered several rounds of CNT samples to Huchems, but also to other major industrial players, many of them in Asia, to test and to verify our product in their battery chemistries. We have compared the comparative performance of the batteries, based on our material, with world-class CNT producers, which have made this product, fossil-based, of course, for decades. We have made good progress. The critical features of our product, the size, the surface, morphology, there's a lot of these specifications. As we also announced earlier this year, we still have a way to go to meet all the needed specifications. We still have too large variations in our product mix. We have to admit, the development process has been more time-consuming and more complex than we anticipated four years ago.
And our process is also different to the fossil CNT technology, which creates a certain degree of conservatism in the expected testing regime, which again takes time to overcome. We are aiming to create a new green industry. It's a bold goal, but it's complex, and it takes time. And this is, I would say, also reflected in many other technology development companies in the green space, where many of these battery production companies, in particular, busy expanding and building factories. That is what the focus is on. That's why we are totally focusing our efforts on quality improvement and not production volumes. And we are discussing with Huchems to extend our existing contract. These discussions are ongoing. Our new battery lab, which I mentioned, is finished. It was delivered on time and below budget, and the lab is important for us.
It has equipment for testing our product in different battery chemistries. The lab will allow us to conduct more in-house cell manufacturing and performance testing, significantly reducing the time we need to move on, to progress, and enable a faster and more precise improvement. Material testing and production of battery cells has started. We started that a couple of weeks ago, and we have successfully fabricated our first reference cell. That's a major milestone. Organization, as in any organization, is important, and it's important to stress that we are a material and technology development company. We are not operating today as a production company, so we focus on reshaping the organization competence to fit with this battery technology strategy. That takes also time, as competence in this field is a scarce commodity, strengthening the team to ensure we have the best people at the site.
The cell producers are increasingly focused on their supply chain security, even though much of the focus these days are on expansion and building factories, especially here in Europe. Being strategic at the same time as you ramp your production up of existing battery chemistry, that can be a challenge. Morrow is able to do both, industrialize production of today's battery chemistry, at the same time as they develop and secure sustainable and local supply chain for the battery chemistries of tomorrow. You basically need to have two thoughts going at the same time, and this is all about technology development for the next generation batteries chemistry. As part of the Morrow factory opening in Arendal last week, we announced our letter of intent for developing technology together, and we are really excited about that.
These type of agreements is very important for us with significant industrial partners, and this is what we need in order to drive our technology and development progress going forward and in order to secure potential offtake contracts later on. So in order to summarize, I would say that our activities ongoing for full steam by verifying our technology and products towards customers, it's key focus. And we are exploring optimized process routes to progress on the required specifications for different battery chemistries. Our product adapts to certain battery chemistries better than others, and that's, of course, very important. We are, however, still not there, that we have a product meeting all the market specifications. Our process is new, and as I said, the industry is very new, and the industry's focus is very much on expansion. There's a limit to what we can control, so this takes time.
We signed an LOI with Morrow last week, which shows that we are going in the right direction. We completed our construction of the battery lab here in Bergen with successful startup, and we are reshaping the organization to fit the strategy and status of the company. The burn rate is under control and well-financed, and our focus and strategy remains on process optimization, product customization, and on securing additional technology development agreements with major industrial players. And this is paramount for us to successfully conclude on, prior to plan for potential large volume offtake contracts later on. So that concludes my presentation, and now, I would say opening up for Q&A.
Thank you, Odd. Before we're opening up for live questions from the audience, we have a couple of answers from our online attendees.
Questions?
Yes.
Mm.
Is there any money to get from EU or Norwegian governmental support to receive to develop the product further?
... And why isn't more money getting into green subsidies, which fits for BCS?
I mean, as I said, we are solidly financed as we speak, for what we do. We have a good dialogue with all the government bodies here in Norway, and we are participating on different regimes and applications for funding, I would say, but that is also linked to what kind of Technology Readiness Level we are on, so we need to make sure that we are on the right application processes, so that is not an issue today. There are also big EU initiatives, which we, as of today, have not participated in.
Next question. What timeline do you have to meet the specifications? Are we talking about years, months, or weeks?
It's not weeks, and I have done those mistakes before, that I came with a prediction of a timeline. This is difficult. We are not doing a linear progress. The progress is sort of stepwise, so I wouldn't forecast any timeline here, but I mean, we are optimistic and confident that we will continue to progress and meet the specifications, but some of them, they're difficult, and it's a stringent requirement for the components for the battery industry, and that is something we really need to grasp, and I would say that we have learned a lot this year on that, and that it is important for us going forward.
And then a question about the Huchems MOU. I think you addressed it in the presentation, but anyway.
Yeah.
What about the Huchems and MOU? It ends soon?
Yeah. The Huchems MOU ends soon, and as I said, we have a good dialogue with them. And we have initial discussions of extensions to that contract, and we will announce that in due time.
Thank you. That concludes the online questions. I think we're ready to open up for questions from the audience. In English then, preferably.
Yeah. So, the variability that you highlighted, can you say anything more about that, what it relates to, and if this electrolyte competence that you're adding, will help you target this deviation in quality? And will it be easier to meet the endpoints in anode graphite compared to carbon nanotubes or fibers? Is there any sort of angle you can have to have a shorter trip towards-
Mm
... a commercialization of your technology? Can you say something about that?
Yeah. I mean, today we are focusing. I mean, we are a limited size company, so there is a limit to what we have to. We have to concentrate on one thing at a time. And we have spent more time, most time and effort on the carbon nanotube development. We know that there are certain specifications also for the graphite market. So, this is an important strategic discussions for us going forward. When are we going to look at two product groups? But today. So we don't really think it's a lower threshold for the graphite market than the CNT, but it's different. If I understood your first question, is the fact that we, we are spending more time and more resources now on really the core technology of the company.
We are not looking into expansion plans, factories, et cetera, et cetera. We really need deep electrochemistry competence in order to professionalize our process competence, and that's what we're spending all our time on. And that, and the result of that is, of course, meeting the different technical specifications, which we are discussing with our partners on a daily basis. Did that answer your question?
I think so.
Yeah.
The deviation relates to the electrolyte process, you think, or it's difficult to say?
If you mean deviations, the deviations is related to-
The deviation in quality.
You know, the battery producers, they know exactly what kind of carbon they want, and they have a list of 15 points. "This is how it's going to look, need to look like." And our deviations is on some of these, requirement to the specification, as in any business, I would say.
Okay.
Yeah.
Is there any signs that Huchems has a higher threshold for quality?
No, we believe Huchems specification represents the general sort of market expectation.
Okay.
Mm.
So your aim is to sort of bring down the volatility and the-
Yeah, but it is, it is important, and I think I said that before, I mean, it's always to work with a competent client is always good, and to have a knowledgeable and competent client to assist us in this development work, that is really what we're trying to achieve. To have an end user which can come up with comments, direct us, someone we have to talk to, you know, so these. That's why it's very important that Norway develops battery producers. Because, you know, from the oil and gas business, the dynamics between oil service and oil companies is also something we need to develop here in this country. The battery component producers with the battery end users, this is something which needs to ping-pong, and it's not fixed in the file.
Just a final question. You seem to have NOK 2 million in financial income this quarter. Can you say what that relates to?
That is, grants.
Yeah, financial income, or did I? Interests. Okay.
Mm.
Okay, if we don't have any other questions from the audience, I think that concludes the Q&A and also the presentation. Thank you all.
Thanks.