Good morning, ladies and gentlemen, and welcome to this presentation of Norskis Grog's 4th quarter 2020 results. Very briefly, the result the EBITDA of NOK 146,000,000. This is a significant improvement from the previous quarter, but obviously still at the low level. Somewhat better volumes as markets stabilized post the main restrictions in the Q2 in Europe relating to COVID. And we can also see segment wise that our European segment contributed significantly.
Australia remained slightly between negative in the quarter. The company retains a robust balance sheet. We have a net interest bearing debt of SEK 725,000,000 at the end of 2020. This is before the equity raise we did in early January of this year of SEK 400,000,000. So pro form a for that, this only about SEK 300,000,000 of net interest bearing debt on the balance sheet.
We announced last year in June significant green growth project in Europe related to renewable packaging. So Norskaskog aims to become a significant producer of recyclable renewable packaging by 2023 by converting machines in France and in Austria. This is progressing according to plan, and conditions for these projects are possibly even better than when they were launched mid last year. In addition, we have indicated to the market before and can now confirm that we are aiming to list circa together with circa shareholders on the Oslo Stock Exchange Euronext Growth in during this quarter, Q1 of 2021. Norskirk holds a significant majority share with just under 1 third of the shares of this exciting new biochemical company.
This. At the same time, COVID took a big bite out of our markets in 2020, and we had to adjust production capacity by closing capacity in Norway with one machine in Halven, the so called PM5. And we also converted the New Zealand mill at Tasman from newsprint, which has now ceased production of newsprint. And then we are going into something called converting grade paper, which is used in packaging mainly in China, but throughout Asia. As a direct result of the COVID effects on our markets, we have recognized impairments in our fixed assets of about NOK 258,000,000 related to the boiler mill in Australia and to the Norwegian mills.
Year. So altogether an impairment of NOK 258,000,000 in the quarter. The main figures, As I said, the EBITDA remains on a low level, 6% EBITDA margin for the group in the 4th quarter is certainly below the 10% that we see as more normalized margin. So COVID still has an impact negatively on the market. There are no the nothing to change compared to the performance in the quarter.
So the underlying EBITDA is also at 6%, too low, but an improvement from the 3rd quarter. If we look very, very briefly at the variance analysis from the Q3 to the Q4. As I indicated, volumes have come up. The market is somewhat better. People are consuming more paper.
Retailers are printing more from a period where they basically stopped not only in Europe, but also in Australia and globally for our total industry. Pricing has weakened a little bit in the quarter, not materially compared to the Q3. However, other costs have also come down for us, so the margins remain reasonably stable. So the volume improvement is the most significant news in the quarter. There's also, as always, some other effects, and one of the most notables the fact that there are some energy arrangements in France, which is booked also in the 4th quarter, improving last quarter compared to the 3rd.
Again, Europe has not necessarily returned to normal, but has strong improvements. The total year's consumption of our products in Europe is down about 20%, which is 4x what we have seen asset structural decline over the last 10 years. So basically, 20% down. That is somewhat differentiated across our grades Vids SC Paper a bit better and lightweight quarter than standard newsprint in Europe a little bit weaker. However, we do see some improvements also in consumption of paper in Europe.
And we see improvements in Asia, which are less affected these days by lockdowns. So in general, the market is stabilizing, but still at a relatively low level. Australia, as mentioned, is still slightly EBITDA negative. We are restructuring the New Zealand business, which impacts this. So we expect to regain a positive EBITDA trajectory for the Australian business in 2021.
The strategy is now well known for most of you. We will obviously still improve the underlying business the one of the 10 largest in that field. And we will also develop other projects, which I will come back to briefly. If you look at the paper capacity now, we still have more than 2,000,000 tonnes of paper. We still remain a producer of all grades for our customers.
No one can say that they do not have access to the product range from us that they haven't been used to buying. And we still believe that over the cycle, the average EBITDA is around NOK 1,000,000,000 despite the fact that 2020 is somewhat lower than that. Discussion. We can see that during 2020, pricing came down. Already before COVID, there was the need for capacity reductions because of the circular demand declines.
So going into 2020, pricing already came down. That was exacerbated through the year as the COVID demand impact took its toll. Also going into 2021, despite the fact that we have more than 2,000,000 tonnes of closures announced in Europe last autumn, pricing is still coming down as some of this product is still sitting in inventory, and some of it still has to work its way through the supply chain. However, we believe that demand is stabilizing now from the low points of the middle of last year, and we believe that 2021. We'll once again see a more balanced market.
Capacities have come out, demand is stabilizing, and we see also signals from Asia and from North America, which normally is a harbinger of news for Europe. Financial results. And we believe that by mid-twenty 21, the market is again in balance and that the price movement from the 1st July will be upwards. However, with the present earnings, we obviously have to convert as much of the earnings into cash as absolutely possible. So in 2020, we have already relatively high cash conversion, higher than in 2019.
And with the improvements that we have announced, NOK 250,000,000 in terms of reduction of fixed costs, margin improvements and reduction of maintenance CapEx. Financial results. We can already see that the business is generating significant cash to support growth investments. One factor for us now these days, which have become quite important is CO2. We do benefit from 2 main systems in Europe.
1, and you can see on the left hand side of this graph, is the ETS, the trading system of allowances, which by design is getting tighter and tighter. And you can see the black line here is the surplus that we have of sellable quotas. This. This will continue for the next years into 2021 and beyond, probably until 2,030, and next question. It will probably be in the range of 250,000 to 300,000 tonnes of CO2 net that we can sell into the market.
This will be booked when we sell it. Normally, that happens in the first half of the year. The good news is that the emission price has moved up, as you can see on the middle graph here, moving from a level hovering around €5 for many, many years, now well excess of €30. That has been in 2020 about NOK 80,000,000 to NOK 85,000,000 income for us. In addition to this, we also have a compensation scheme active in Norway and France, which generates about SEK 300,000,000, also dependent on the emission price.
So we think that these are sustainable earnings potentials for us, and it allows us to invest in new green technology. I will come back to that in a minute. As I've already mentioned, we will become a European renewable packaging player, 1 of the 10 largest from 2023 onwards. 2 big projects. We will remove almost 750,000 to 800,000 tonnes of new sprint capacity in Europe in the market, which is growing as opposed to the one we're leaving, which is declining.
We have come quite the long way in discussion with banks and financing institutions for the financing of the projects. And we expect to make a final investment decision during the first half sometimes. Expected EBITDA, importantly, from a midrange point of view and average over many years, between NOK 700,000,000 and NOK 800,000,000. This picture shows the margin between the main raw material, which is old corrugated containers, used packaging paper. And the upper lines is the main products in recyclable containerboard.
The difference is the margin people live off, which for many years have been relatively stable and has also expanded. What has been a positive surprise during COVID is that the drive for e commerce drives the demand for renewable containerboard, which you can see that pricing has improved despite the fact that there is quite some capacity coming to the market. So we think the fundamentals for these projects or even better now than they were in June when they were first announced. Two main reasons, e commerce is maybe obvious. European sales in 2020, estimated that all retail, now about 16% is e commerce, coming up from about 6% to 8% over the last years, accelerated by COVID.
In addition, there is another trend in this industry, and that is that the paper risk becoming lighter, in other words, that you sell more square meters per the same tonnage. That is illustrated in the middle graph. Over many years that trend has continued and e commerce is the friend of lightweighting. Our machines are coming from even lower grammages and have the advantage that they will be more efficient the lower the grammage is. Here are the 2 sites.
France, we will convert and in Austria, we will convert. In addition to this, we will also invest in energy facilities to support it, which are good stand alone investments, but we also support packaging projects. We have a strong competence internally to do projects. We have also hired external resources. We have done these type of projects before.
And obviously, there are seasoned consultants, both on the technical side and in the market side, who will support the projects themselves. High level studies were done. Now the detailed studies are almost finished, and the permitting processes are also ongoing as we speak. Next question. None of these have thrown up any red flags, which means that there will be a final investment decision sometime during the first half of this year.
So that is the packaging. So publication paper is still the cash Harvesting Bottom Plank, exciting opportunities in Renewable Packaging. And on top of that, our competence, our infrastructure, our value change also enables other projects. We are, as we speak, erecting a large scale energy plant in Austria, which will burn waste. This is expected to start up in the first half of twenty twenty two, already next year, about a year from now.
And we'll generate about EUR 20,000,000, EUR 200,000,000 Norwegian of EBITDA from 2022 onwards. Investment of €72,000,000 financed by a local facility and our own cash. In addition, we already have done a project in New Zealand on pellets in 2020, successfully upgrading from 35,000 to 90,000 tonnes per annum, producing now EBITDA of NOK 30,000,000 to NOK 35,000,000, a very sort of good, steady contributor to our business excellent operations in the new world of renewable energy. I mentioned circa. We aim to list circa where we have a big minority stake.
We have already a grant from the EU in the Circa company, which will be used to build a semi industrial pilot plant in France for a biochemical. This is a solvent that replaces toxic chemicals, possibly toxic chemicals and other harmful substances, very, very interesting project. The EU has been with us, granted EUR 12,000,000. Now we will raise the funding up to EUR 40,000,000 to actually build a plant that will be the first of this kind in the world. Sabina is one of our projects coming out of the Sibrugs Mill in Halden, Norway, where we established the first commercial sales, proof of concept for Sabina.
It can be used in epoxy for flooring, which reduces dust and other harmful effects of flooring processes efficiently. It can be used with paints, it can be used with glue, and it can also maybe over time be used in oilfield Drilling Fluids. And finally, also in the Q4 of 2020, we announced a grant from the Norwegian government to help us build a pilot plant for biocomposites, where we mix good fibres and plastics. Quite interesting, particularly for long lasting plastics such as pipelines. If we just delve a little bit into the projects themselves, we can see that the Bruk plant is already on stream.
You can see here the construction of the waste to energy plant, 50 Megawatt Hour capacity. Quite an impressive project. And one of the key foundations for us was that we already had the permit to do this, which is quite difficult to obtain, a high value of being an industrial company active in the EU. I mentioned on a couple of occasions circa. Circa is exciting for us.
We aim to support circa going forward, but at the same time, We also now find the opportunity to get all the shareholders in Norskis Skogou, who remain a committed partner to Serco. But at the same time, the. It's now time for this development company to take the next steps. From 2,006 to 2,009 with few grams produced of biochemical solvents to now up to the new plant will be to 1,000 tonnes. It's time also for other investors to take part in a very, very exciting opportunity.
I also referenced Sabina, which is our products from Halton and Amo fibril cellulose, which is very, very finely ground wood fibers, which have amazing abilities in terms of reducing emissions in terms of the properties, for instance, for glue To Stick Things Together or Epoxy, which is it will be great floorings with Sabina inside and only a very, very small fraction is needed. Very exciting product for us. We think that this is going to be commercialized now in the spring, and we're looking for an interview international distributing agreement with Brenttag, which is a large scale chemical distributor. After that, when the commercial foundation is solid we will invest in the capacity to produce. So all in all, we have our clear priorities laid out.
This. Obviously, this type of business, in a commodity business, cash conversion is important. Even in the very, very difficult COVID era 2020, we had a high conversion of cash, and we were still generating cash from the operations throughout the year. Australia is a different position in Europe. We will reposition, we will finalize the strategic review of New Zealand, what happens to Tasman the Nature's Flame.
Our operations in New Zealand will probably be clear by the end of Q1 of this year. And obviously everything done with the robust balance sheet as proved by the capital markets transaction that we did early January raising NOK 400,000,000 of equity. Then the strategy in the longer term, medium to long term, obviously being going into renewable packaging is a big step for us. I think this will be very exciting for Norskirk, a very, very big leap for the company. Other fiber and energy projects.
We will do it, but we may do it also together with partners. As you can see with circa, we will invite other investors in when the projects are ready for commercialization and upscaling. And finally, we will remain a producer of all grades. Our customers. We still have a full product range from us as they are used to with high quality products and no hassle services.
Just a final note, we have indicated that we will hold the Capital Markets Day in the Q1 of this year. We will still hold it. We would love people to be able to get together, so we have put that on hold until we have clarity around COVID restrictions. Next question. So unless that takes too much time, we will be back shortly with a new update on when you can expect the capital markets transaction.
This. So on that note, I would like to thank you very much for your attention this morning, and have a good day.