Good morning, everyone, and welcome to our third quarter presentation. Today, I've brought with me Håvard, our Chief Technology Officer, and Fredrik, our Chief Commercial Officer, to do this presentation. We will present the latest news to you. This will include a financial, a technological, and a commercial update. We will then finish with our development plans, our goals, and the roadmap ahead. First, I will give you a short introduction of Bergen Carbon Solutions and what we do since some of you are new viewers. For those of you who doesn't know me, my name is Finn Blydt-Svendsen. I am the Interim CEO and one of the founders of Bergen Carbon Solutions. Bergen Carbon Solutions is a company in the green technology sector. We have a unique and proven core technology where we produce a wide range of carbon products from CO2.
The company was founded in 2016, and since then, we have attracted approximately 40 highly qualified people and reached multiple milestones. The company has gone through some major changes, both in the management and in the board. I am confident that this new configuration will take us through the next important phases. Last year in April, we were listed on Euronext Growth. Our mission is to create highly valuable carbon nanomaterials from CO2. This way, we can be one of the pioneering companies in the important carbon capture and utilization industry that will lead the way to decarbonize existing industries. Our technology gives us the opportunity to supply a new generation of materials for several industries, while at the same time utilize CO2. We are driven by the eagerness to further improve our technology to make sure that it can be used to accelerate the green shift.
From the very beginning, we produced carbon nanofiber in small scale. We got our first prototype at Garnes outside Bergen. This gave us the possibility to explore different production parameters and inputs. Through this testing, we found out that it was possible to fine-tune the production and its output. This know-how gives us a great advantage for the further development of new carbon products. We are now working towards industrial adoption, and new potential partnerships are being considered each week. Håvard and Fredrik will have more on this topic later. As you can see in the figure, the potential offtake volume is greatest in the graphite sector. While the price is lower, our new discoveries show that we will be able to produce this at a fraction of the cost and at a higher efficiency than our existing methods.
The initial findings are promising, so we have grounds to explore this business case further. Graphite is one form of the element carbon. In graphite, carbon atoms are arranged in layers. This layering gives graphite many of its properties. The global demand for graphite as battery materials will increase in the upcoming years. Our technology is fundamentally climate positive. We see that through intensive research and development, we can improve several aspects of our business. We're introducing a new and groundbreaking separation technology and increasing the energy efficiency of our core process. This will push our competitive advantage even further. We are also expanding our product portfolio with introduction of multi-wall carbon nanotubes and now graphite through latest Project C. These developments will further strengthen our climate positive advantage compared to traditional methods. The industry we are going to build requires the right strategic partners.
We seek investors and partners with the right know-how and potential to help us accelerate our development. We are working towards material suppliers, industry leading companies, and national authorities to place Bergen Carbon Solutions on the industrial map and secure political attention. The development in the geopolitical situation with following disruptions in supply chains has made it more and more obvious that there is a need for Europe to become more self-sufficient when it comes to critical raw materials. This is a mega trend that works in our favor. This can only be achieved by broad industrial partnerships and technological developments. Overall, the company is moving ahead according to the plan. We have several exciting projects going on. For example, Project C, where we are investigating how we can use our technology to mass produce graphite from CO2.
This is really exciting because it can enable us to utilize substantial amounts of CO2 while contributing to solve the geopolitical challenges in the raw material supply. Our main focus area is still in the battery sector. It is a clear shortfall in several of the important materials needed to cover the demand. We have continued the discussion with multiple companies that are investigating the possibility to use our green materials into their battery chemistry. The letter of intent that we have with our Japanese partner has evolved into an MOU with the intention of setting up a joint venture. During the third quarter, we have done multiple tests at Flesland for our Project C. We are aiming to get the first initial results within this year. The B test module is installed, and we hope to have the results within this year. Now over to Håvard.
Thank you, Finn. My name is Håvard Husby. I'm a Chief Technology Officer here in Bergen Carbon Solutions. My education is an electrochemist from NTNU, and I have experience from land-based industry in Norway. Today I was hoping to give you a little bit more insight into the process and that of our competitors. I will then do a short comparison and show you why our production route is superior to the conventional method of production. I will start by introducing chemical vapor deposition, which is the method used by most of our competitors. It's the major method of production, both for carbon nanofibers and carbon nanotubes. It's a well-established method of production and can be used for structuring all kind of carbon materials. For example, diamonds for grinding tools. The process is three step.
First, natural gas typically is let into the reaction zone at high temperatures and low pressures. The exact conditions depend on which kind of materials you want to produce. Second, the gas absorbs onto a substrate. You grow fibers or tubes from nucleation points. The carbon from the gas is incorporated in the structure while the remaining components remain in gas phase. After some given time, the substrate with the nanostructures is taken out of the chamber, the carbon is purified and prepared. As you can understand, this is a batch process, and output is limited by the gas let into the reactor, the size of the reactor, and the reaction time allowed. The temperature is significant, and it is also energy costly to maintain vacuum in the reaction zone.
All of these points give a high energy consumption for the process and a low output. This in turn means high CO2 emissions for the process. Our process is fundamentally different. We have a two-step process where we are converting CO2 into nanofibers, nanotubes, or even graphite, as you will hear more about later in the presentation. Firstly, CO2 from, in principle, any source, chemically reacts with the electrolyte. You can think of it like bubbling CO2 in water in your SodaStream machine. The carbonate formed is then transformed through electrolysis. Carbon is deposited on the cathode, and there is oxygen evolution on the anode. After the production is finished, the electrolyte is brought back into its pre-carbonated state and ready to consume more CO2. Forming carbon is quite straightforward. The trick is to structure it into fibers, tubes, or graphite.
We do this with our trade secret combination of a lot of parameters, including current densities and voltage control, which kind of substrate materials we use, nucleation agents, and trace components, and much more. After we have built up our fibers or tubes or graphite to some given thickness, the cathode is extracted and harvested. Our nanomaterials are quite fluffy of nature and acts like a sponge in the electrolyte. That means what we actually extract from our process is about 90% electrolyte and 10% product. We then have to separate the electrolyte from the carbon product to gain a sellable product.
For some time, this has been the major cost driver for our process, but we have gained a lot of experience in performing this process, and in a few slides, I will present a novel process solution we have developed that drastically improves our recovery of electrolyte. This decreases production costs and increases profitability. The process developed by our company has a lot of advantages over the conventional methods. We operate at relatively moderate temperatures, around 800 degrees, compared to 1,000+ in CVD. We also operate at ambient pressure. Our process is more compact because it is performed in liquid state instead of gas. The concentration in liquid state is much higher than what is possible in gas state, and the energy consumption is thus just a fraction of CVD. Our technology is still maturing from a level already highly competitive compared to CVD.
We are constantly doing incremental improvements to get more and more efficient and profitable, and from time to time, we also have huge leaps in efficiency, like the new separation concept that I will soon introduce. From time to time, our highly competent personnel comes up with game changers that drastically improve our process and profitability. One of these breakthroughs has been on separation of the electrolyte from carbon product. Remember that I told you that our major cost driver was the electrolyte? Well, we have found outlines of a new process where we use CO2 in water to dissolve the electrolyte. This mix will not dissolve carbon, and the carbon product can easily be filtered away. By changing the process conditions, the electrolyte is precipitated. That means it sinks to the bottom of the reaction vessel again.
It can then be extracted and reused, and the electrolyte is even purified from it in its inlet state. As you can understand, this is a new process that drastically improves our profitability and it's a possibility too good to skip over. We have therefore decided to include this in our factory design. It has been quite some journey in this company, and that includes for the technical development. At admission to the stock exchange, our plan was to use containers in a decentralized production setup to produce CNF where the emitters were. After engineering and calculating, we altered this strategy to a factory-based setup. This meant a higher output and a lower OpEx to fit with market needs. There is no change to the strategy, but we are constantly developing and implementing new improvements to improve profits in the long run.
Since IPO, we have had several upscaling steps, and we have commissioned a lot of new production units in the past year, increasing our design capacity and making it possible for us to do a lot more testing. We completed the installation at BIR AS, and we hope to conclude and report on this in December. This project allows us to test the robustness of our process and to find the outer limits of our operational range. That will be very useful in the further design of the factory. Thank you.
Okay. Thank you, Håvard. My name is Fredrik Øksnes, and I'm the Chief Commercial Officer here at Bergen Carbon Solutions. I will use this opportunity to guide you through our commercial development. The company is currently in a very exciting position. We know that the value of our product is dependent on the specific improvement we can bring to our customers. The improvements, in general, is a function about the physical properties of the product, if it's a graphite, CNF, multi-walled carbon nanotubes, and so on, but also, the morphology within each, product spectrum. The degree of purity of the carbon material in itself is also of huge importance for our customers. As you probably have guessed, we have also seen that dispersion technology in itself is crucial for a good blend in the mother material.
The technical properties of our material in each case is, and how it's prepared, is also affecting the results greatly. In general, in industrial materials, it needs to be tested and verified into each individual application before large-scale industrial adoption takes place. This extensive time to market is longer than we have expected earlier on. The good thing about it is, though, is it means that when you finally get acceptance for your product, you can expect to get long contracts. Our extended product portfolio, especially the introduction of multi-walled carbon nanotubes, which is very exciting for us, enables us to target a much, much bigger market than earlier. This market is expected to be at least 10 times bigger than the CNF market, and the growth rate seems to be much, much higher as well due to the technical properties of the material.
To commercialize a brand-new technology is a very interesting exercise. Even if we see a huge potential to reduce CO2 emissions by blending in our nanomaterials in many different industries, we need to focus our efforts towards the area where we expect the potential to be highest first. We have already got some very good initial results showing that our material is well suited for use as an additive into electrodes for batteries. By blending in our nanomaterials like the CNF, multi-walled CNT, you can expect to increase the energy storage capacity of the cell, increase the charging capabilities of the cell, and reduce the deterioration rate of the cell. This means that our material will reduce the need for materials in the first place, while at the same time increase the properties of the cell.
This is really good news for the battery manufacturer, especially the European ones. As you can see from the graph presented here, we need new solution to fulfill the gap because we have a significant shortfall when it comes to graphite in Europe that will be used in anode graphite. We need solution to fulfill this critical need for materials. As you can see, up until now, we need some drastic changes. This is where Bergen Carbon Solutions are coming in. We are producing both a nanomaterial that will reduce the need for graphite in the first place, and we have recently launched our Project C with the intention on investigating our ability to produce anode graphite directly from the CO2 emissions.
Overall meaning that by implementing our technology in the European battery value chain, we can help sorting out the geopolitical situation and reduce the European addiction to raw materials from, for instance, China. This is why we have launched our newest project, Project C. With Project C, we are aiming to investigate our ability to produce large volumes of graphite to support the European energy transition toward 2030. If we succeed with bringing a highly efficient, large-scale graphite production system within the price range of anode graphite materials, this project can be the start of a business area of tremendous scale. Just think if Europe can be self-sufficient in anode graphite for the battery industry, while at the same time reducing our CO2 emissions. That must be the most valued CCU value chain out there.
As an example, in our hometown Bergen, we have a waste facility center there, where they are letting out roughly 250,000 tons of CO2 each year. With our technology, we will be able to produce approximately 50,000 tons of anode graphite yearly. This is huge numbers, guys, and it's underlying the overall business potential of our technology. Overall, the nanocarbon market is highly competitive industry. Due to the price sensitivity in the market, we will not continue to bring updates regarding price levels of different nanocarbons, like we have done until now. Within the total market, we have identified huge market variation in both product quality, purity levels, price levels, and concluded that we need to gather a deeper understanding of the different market segments.
Some market indication shows lower prices than previously guided, while at the same time seems to be significantly higher volumes, underlying that we actually need to build a deeper understanding. Based on the fact that our process is fundamentally more energy efficient and climate positive compared to our competitors, it's important for us to make sure that when we are industrializing our technology now, we need to make use of the whole part of the technology, to use all our competitive advantage. That was it. Finn.
Thank you. I will cover the outlook before we move over to the Q&As. Let me start by saying that we have been able to sign Odd Strømsnes as our new Chief Executive Officer. He has more than 12 years of experience in the role as a CEO. I am convinced that he is the right man to lead the company for the coming period. He brings the required competency and experience needed to achieve our industrial ambitions. In this short time, I have had to get to know Odd. I am also convinced that we will work well together and that he complements the team in a good way. I will now return full-time to my CEO position, and this role will be increasingly more important going forward.
As you have seen through this presentation, we are well-situated and always evolving our market and technological position. We have given you a few examples of the last month's development, indicating huge potentials in several fields, including improvements in separation process and the core technology. In the market segment, we are utilizing our flexibility to move into new markets and explore business opportunities that we believe has a potential for profitability. Our technology is still maturing, and we constantly identify opportunities to improve on today's situation. It's therefore important to move quickly but at a controlled pace so that we are not missing out on low-hanging fruits that should be incorporated into our design. Because of the potentials identified through the latest months, we have made a decision to extend the timeline of our factory.
It is important for us to manage the capital and trust given to us by the investors in as good manner as possible, and the possibilities identified are considered too good to not be included in the first phase of our factory development. We still believe that Høyanger is the ideal location for the factory, and we are working closely with the industrial park and the municipality of Høyanger to realize this. The power agreement is already in place, as just announced a few days ago. The key results from the strategic adjustments are a deeper understanding of the markets, optimization and development of the technology. We will also verify technology in a pilot and or in pilots. We will implement improvements as well. All of this will contribute to reduce risk and improve the cost position.
Our short-term goals are therefore to accelerate the work towards potential offtakes and business developments to acquire further market knowledge. An extended factory timeline also gives us the important possibility of applying for soft funding. Regarding the technology in the short term, we will complete testing in BIR in December this year and continue the work on the CO2-based separation pilot, so it will be ready within next year. The long-term goal for our company is to ensure that when upscaling, we are doing it with the correct technology and that we have secured profitable long-term offtake agreements. We believe the best route to this connect is connecting with industrial partners that share our ambition of an industrial greener shift. This forms a good foundation for stable and profitable company set for the future.
Thank you for watching and we are now open for a Q&A session and we will switch to Norwegian when we do that. Thank you.
Ja. Da kan vel egentlig dere stå sammen der da, og så kan jeg ta modereringen her. Skal vi se. Mens jeg gjør meg litt i stand da nå Finn, så jeg helt, litt tidligere i organisasjonen at, i presentasjonen at vi har fått spørsmål knyttet til organisasjonen.
Ja.
Litt i forhold til dette her med ny leder og en del sånne ting. Mens jeg gjør meg litt i stand, kan ikke du utdype litt om det?
Jo, jeg var jo litt innom det i presentasjonen og det som er tydelig her da. Det er at det som har vært viktig for ledelsen den siste tiden, det er jo da å utvikle selskapet, få det videre, det i riktig retning. Så skal vi posisjonere oss for framtiden. Det vi har, vi har fått mye på plass, den siste tiden, og så har vi også fått ansatt en svært kompetent ny daglig leder som har det som skal til for å ta selskapet til det neste nivået. Som jeg også sa i presentasjonen her så skal jeg tilbake igjen til min opprinnelige stilling som CEO. Jeg gleder meg faktisk til å komme tilbake igjen der og fokusere på den jobben igjen.
Jeg har veldig stor tro på at Odda kommer til å jobbe godt sammen, og at han kommer til å komplementere teamet på en veldig god måte.
Bra.
Det var
Mye spørsmål i dag. En av gjengangerne ser jo ut til å være vedrørende Høyanger. Det stilles spørsmålstegn ved når kan vi forvente at Høyanger er oppe og går?
Ja, vi var jo innom det i presentasjonen her. Grunnene til at vi ønsker å forlenge tidslinjen noe. Det er på grunn av at vi har oppdaget først og fremst en ny prosess som radikalt kan redusere kostnadene våre. Og i tillegg så har vi gjort veldig mye markedsresearch som tyder på at vi må sikte oss inn mot det aller mest lønnsomme markedet. Så før vi kan komme tilbake igjen med noen helt klar tidslinje med en oppstartsdato, så må vi nesten få jobbet oss gjennom de nye konseptene. Det kommer til å ta noe tid, men vi skal oppdatere når vi er klare for det.
Et oppfølgingsspørsmål som passer for så vidt til det også er jo her. Hvor stor vil en fabrikk som produserer 50,000 tonn grafitt bli? Passer den i de kommende lokalene i Høyanger?
Ja, det vi vet er at når vi produserer grafitt istedenfor nanomaterialer, så kan vi stresse utstyret vårt betydelig mye mer. Vi får mye bedre output på samme arealer kan man si. At det kan være plass til den type fabrikk i Høyanger er ikke helt utenkelig, men det er altfor tidlig å si nå. Vi er veldig tidlig inne i fasen med de nye konseptene, og må få grave litt mer i det før vi kan konkludere med faktiske størrelser på en fabrikk.
Ja, vi har også fått spørsmål knyttet til separasjon, den nye separasjonsprosessen.
Mm.
Den forrige var patentert. Er det sånn at den nye også, at man ser på mulighetene for patentering der, eller slutter vi da å ta i bruk den gamle? Altså vil den tidligere patenterte prosessen bli useless, eller hvordan ser dette ut?
Ja, patentering er jo naturlig nok noe vi ser på i forbindelse med den nye prosessen. Per nå så er det viktigste for oss å få gjort den første testingen og den første verifiseringen og at dette her er noe som er egnet for fabrikkskala.
Mm.
Deretter vil vi gå inn i patenteringsdiskusjonen om vi vil basere oss på hemmelighetshold eller patentering. Vårt tidligere patent innenfor separasjonsteknologi kan godt hende at vi inkorporerer på et eller annet vis i det nye separasjonssystemet. Men det er også detaljer som vi må komme tilbake igjen til.
Ja. Får vi et spørsmål som vi kan jo stille det. Saga er ute. Finn, det spekuleres i hvorfor spørsmålstegn her. Har du noen gode svar på det?
Det kan jeg ikke. Det ønsker jeg ikke å kommentere. Vi kommenterer ikke vår situasjon rundt våre aksjonærer.
Nei, nei. Får vi et litt mer sånn generelt spørsmål, hvorfor bør man investere i Bergen Carbon Solutions?
Nei, det.
Det er litt sånn oppfølging kanskje.
Ja, det vil jo vært veldig unaturlig av oss å gi noen investeringsråd. Det må man jo si. Men, vi er jo, vi har tro på selskapet, vi tror at selskapet er rigget for fremtiden. Det er absolutt inne i alle megatrender som er på vei nå.
Mm.
Vi internt i selskapsledelsen og i selskapet har i hvert fall tro på fremtiden.
Har vi fått et spørsmål vedrørende prising. Hva med tidligere guiding på pris?
Vi har jo gravd veldig mye i markedet nå den siste tiden, og har lært veldig mye og lærer stadig mye mer. Det blir mer og mer åpenbart at diversifiseringen i markedet er ekstremt stor. Det finnes ingen enkelt produkt som kalles CNF eller CNT. Det kommer helt an på. Det finnes en million forskjellige produkter, og derav også en million forskjellige priser, så volumene spiller en veldig stor rolle. Om man kjøper noen gram til forskningsformål, så er det klart veldig høye priser. Om man kjøper på tonnevis så er det betydelig lavere priser. Prisområde som har vært gitt det har nok vært i markedet. Men det vil være unaturlig for oss å kommentere hvor vi kommer til å ligge.
Det er også viktig å huske på at det er lønnsomheten i selskapet som er det viktige her. Det er ikke prisen per kilo. Man kan gjerne ta en lavere pris og produsere mer at det gir bedre marginer enn lav produksjon og høy pris. Det er business case vi stadig ser på og vil tilpasse oss etter for å skape best mulig lønnsomhet for selskapet.
Takk, Håvard. Litt sånn oppfølging til dette med Høyanger. Kan vi gi noen spesifikasjoner der vedrørende når vi forventer at den fabrikken er oppe og går? Starten av 2024, Q2 spørsmålstegn står det på spørsmålet her.
Ja, nei. Starten av 2024 og Q2 begge deler er nok litt tidlig i løypa. Med den nye separasjonsprosessen som vi har, så må vi gjøre grunnarbeidet først. Vi må pilotere det for å verifisere at vi ikke bygger noe som vi får problemer med senere i prosessen. Vi ønsker å redusere risiko sånn at når vi setter i gang produksjonen så har vi en stor grad av tro på at vi kan gå rett inn og produsere for marked. Vi ønsker ikke å implementere umoden teknologi som gjør at vi må teste i et halvår eller ett år før vi får produksjon ut av anlegget. Det er viktig for oss å redusere risiko med å gjøre grunnarbeidet skikkelig først.
Ja.
Som sagt, vi må komme tilbake igjen til noen tidsplan når vi har kommet litt lenger i prosessen.
Ja. Er det et spørsmål som kanskje tyder på at vi kan presisere litt i forhold til denne med markedsbiten her. Her stiller spørsmålet dersom teknologien og produktene er så unike, hvorfor er det så vanskelig å signere store kundeavtaler?
Nei, alt handler om volumer, og det handler om kvaliteter og for veldig mange av de aktørene som vi ønsker å binde til langsiktige avtaler, så har de et ønske om troverdighet og leveransesikkerhet og de tingene. Hva det er som kommer først av en langsiktig avtale, eller om det er detaljdesignet på fabrikken, er vanskelig å si rekkefølgen på ting her. Ja, når vi signerer de langsiktige, gode avtalene, så er det informasjon som selvsagt vil deles umiddelbart. Det er ikke noe vi kommer til å holde hemmelig.
Nei. Er det et siste spørsmål, så begynner ting å gjenta seg litt. Det er et siste spørsmål her som kan være greit å besvare. Vil det være behov for å hente mer penger for å gjennomføre dagens strategi, eller vil selskapet kunne gjennomføre alle planene sånn som det ser ut i dag?
Nei, per nå så er vi veldig godt kapitalisert, så vi har ikke noe umiddelbart behov for å hente penger. Vi må se på størrelser på fabrikker og produksjonsvolumer og dette her. Kanskje det er fornuftig å gå langt over de 160 tonnene som tidligere har vært skissert. I det tilfellet så må vi jo se på finansiering en runde til. Det kan være. Penger kan hentes på mange måter ved lån eller ved industrielle partnerskap eller ved emisjoner for så vidt. Det må vi komme tilbake igjen til når vi har kommet langt nok i prosjektet til å kunne si noe om finansieringsbehov.
Bra. Med det så tror jeg vi avslutter Q&A-session. Hvis det mot formodning er noen som har mer spørsmål, lurer meg på noe, så har vi en mailadresse som heter investor punktum relations alfakrøll Bergen Carbon Solutions dott no.
dot com.
Beklager, dot com. Takk skal du ha. Med det, Finn, så er vi vel ferdig for i dag.
Ja. Tusen takk for oss.
Takk for oss.
Takk for at dere så på.