Good morning, ladies and gentlemen, and welcome to Norskis Gorg's First Quarter 2021 Presentation. This time, we thought to start with introducing the company in a slightly different way than what we have done before. You can see here that we are now much more than publication paper, even though we still have a full range of products to the market in this space, and we will continue to do that for a very, very long period of time to come. We are today talking a lot about Renewable Packaging. I'll come back to a major milestone in the company's history in terms of Renewable Packaging and the Strato introduction.
Sustainable Energy is also a big part of our business now and will become bigger. And finally, on the Chemicals and Materials front, we will also talk a little bit Towards the end of the presentation about exciting developments that has happened in the Q1 and will continue to happen in the next year. Today's presentation is divided into 2. 1 is an update on the Bruk project. We Have now a final investment decision by our board made yesterday to go ahead with this important project for us.
And then I will obviously also report on the Q1 results after that. With the major projects that we launched on the 17th June last year, today, we are at the stage of a final investment decision. So our Board of Directors yesterday approved the €100,000,000 investment into conversion from newsprint into Recyclable packaging into containerboard, 210,000 tonnes of capacity, where the production start in the Q4 of 2022, which is a little bit ahead of what we indicated last year. Also importantly, we have committed financing locally in Austria of €70,000,000 of the total investment projects, a very, very important milestone for Bruck and for Norskoeskul. In this context, we're also introducing Strato.
Strato is The family name, the brand for our new liner and fluting products. These will be lightweighted. They will be strong. They will be 100% Recyclable based on recycled fiber from the market. So a very, very important step into an exciting market.
The containerboard market is growing. We think that the growth will accelerate going forward as we will replace more plastics with packaging, fiber based packaging. Altogether, we still have the ambition to enter with 765,000 tons, although the final investment decision for the Golbe Bay project will come a bit later in the Q2. We're entering a market where the growth is in excess of 600,000 tonnes per annum. So for us, this is an exciting new world.
To put this into context, We when these projects are completed, we will be one of the 10 largest recycled containerboard suppliers in Europe, an important step the company, but also important for the market to have an independent producer who will produce containerboard for corrugated customers. So now to put it in context, in Bruk, the final investment decision is done for PM3. We can, obviously, in the future also do PM4, which is probably as suited as PM3 for these type of products when and if converted. And on the gold base side, as mentioned, we still expect final investment decision later in the Q2. And also here, we have the possibility to further expand in the future if we find that to be the most profitable thing to do.
So all in all, a very important step towards entering the containerboard market in Europe. In addition to the Bruk news, we also now can announce that Noske Skog is entering the liner interliner production. This is primarily an Asian market. The biggest is China. And we have now successfully completed production tests at Skong during the Q1 2021.
This is also a product which is 100% recyclable and repopable and is complementary to our products in Europe on Test Line and Fluting to the Golbe and Drog projects. We will enhance this production during the second half of this year. And over time, this could be a large scale product for us, between 150,200,000 tons per annum. Importantly, there is no major capital expenditure associated with this, and we will be quite competitive because of scouring size, because of the access to fiber energy and obviously efficient logistics from Norway to Asia. Also an important milestone for the company without any capital expenditure.
Now moving on to the Q1 financial results. Very, very briefly, I should also draw your attention to another project in Austria, the Brukvesto Energy Plant. We are now within 12 months of start up of this project. We estimate to bring another NOK 200,000,000 of EBITDA from the first half of twenty twenty two onwards. Also importantly, we will reduce our CO2 footprint with Roughly 150,000 tonnes, this is the large scale CO2 emitter today where we are using gas in Bruk, which will be replaced.
So also entering into the green energy field with a significant capacity. We have So far, been on budget, on time despite all the COVID challenges that exist in Europe and globally. And also importantly, the remainder of the project, dollars 38,000,000 CapEx estimate, is purely to be funded by the local debt facilities and no more equity from Norskirk Gug ASA. I would also draw your attention to the listing of the circa group at Euronext which was done during the Q1. This is a company who has an exciting biochemical growth journey ahead.
It's been based on thorough research on pilot plants and semi industrial pilot plants at our boiler mill in Australia, And it enjoys very, very strong support from customers and from governments throughout the world. So this will Enable us all as a society to replace petrochemical solvents with biochemical solvents, both for health reasons and for environmental reasons. This is a very, very important project. We continue to be the largest shareholder. We hold about 26 present of circa, and we remain committed to the company and will support its further growth as it will embark on an industrial story in France.
The quarterly figure itself, we report an EBITDA of €112,000,000 this quarter without really any adjustments And still a strong balance sheet. The net debt position is about SEK 400,000,000 after we have done both an equity issuance and a new bond refinancing in the Q1. Also importantly, a reasonably good cash position at the end of the Q1 with more than NOK1.6 It remained difficult for us. There is upward cost pressure, particularly on recycled fiber in Europe and globally. However, we do see that prices has moved up in Asia in North America for our products, and we expect that to also happen in Europe from the middle of this year.
This is also supported by capacity being taken out and further announcements now of our competitors to remove significant capacity during the Q3 of 2021. Despite this, The Q1 was weak. We reported then, as I said, just over €100,000,000 EBITDA. This is a 5% EBITDA margin and is Clearly not sustainable for a very long period of time. If we look at the difference to the Q4, we can see that there's both price pressure as expected Downwards, which is the main negative factor and also we had higher variable cost.
This was particularly influenced by, Let's call it the winter effect with high spot prices in particularly the Nordic markets. Against this, our own initiatives on the cost side mitigated about $60,000,000 and then various other items, the 2 most significant ones being that we now do book the CO2 quota allowances as they come, as we have done with the compensation schemes in the past. And we also received in Austria some direct COVID support. So all in all, SEK 112,000,000 in the Q1. Very briefly on the segments themselves, you can see that Europe, We see an improved utilization rates to 88% from last year's very, very low levels of 70% to 80% after COVID hit us.
However, Europe is still not satisfactory in terms of EBITDA with a 0.2% margin. Down under, as expected, another weak quarter with almost no or even a slight negative EBITDA. This is also due to the fact that we take downtime in New Zealand with very high energy prices presently. And Australia is, as most of you probably recognize, under strategic review. So we will revert during the Q2 of what It happens particularly with the New Zealand operations.
COVID took a big bite out of the market in 2020 With almost 20% decline, you could almost see from the mid of March last year that this was a big COVID effect. The market also in February January of this year had similar falls, but is now more stabilizing as we see March April numbers coming in at sort of a post COVID level almost. But balanced by Paper capacity closures now more than 3,000,000 tons since the middle of last year. And the last two announcements then to the So to the right hand side of the graph, bringing this more than 3,000,000 tons, which should balance the market once again. I mentioned the booking of the CO2 in our books.
This is becoming an important part For us, it's partly the CO2 compensation schemes in Norway and partly the quotas that we receive. And while the system is meant by design to tighten. We will partly get more quotas from next year from the Bruck Energy Plant, as mentioned, And the pricing is also improving per unit. So the guidance for 2021 is a similar level of income as in 2020, both for CO2 compensation and for CO2 quotas. Importantly still, to keep competitiveness in the existing operations, our Sibrux mill has just now commissioned something we call NEX Terminator, which is another energy efficiency project, has enabled even further energy efficiencies at the site, which Probably, it's the world's most energy efficient SC producer.
And it also reconfirms Sverdrup's as a neutral CO2 factory. It's also been supported very well by the Norwegian government and the NOx From together with the Nova with NOV56,000,000 about onethree of the investment, where we expect a 3 year payback. Project has gone according to plan mostly with some slight delays because of COVID restrictions on people traveling in to Norway from Sweden and Finland. The Bruk waste to energy boiler is quite an impressive story so far. As you know, we are replacing our old gas fired power plant in Austria with The large scale 50 megawatt unit, which will take recycled materials and waste And we'll burn it, and we will have steam and energy for the grid and for our own operations.
We've indicated the NOK 200,000,000 EBITDA contribution from this, which clearly is important for us, but also the ability to reduce CO2 with 150,000 tons, which is significant For Austria, it's significant for the region, it's significant for Norcoskog. But I think it's also important that we are able to deliver these projects On time and on budget, which should bode well also for the big containerboard projects. And I have to also credit Austrian authorities, which have been very cooperative in terms of the COVID environment, to allow people traveling into the country from of the countries in order to support our developments industrially. I mentioned briefly the circa stock exchange listing in Oslo, which happened in the Q1. Again, a very, very exciting development.
There has been grants from EU on the Horizon 2020 program in order to Move this forward, and now we are at a step of realizing the Resolute project, which is 1,000 ton production plant, which will be the 1st in the world. So far, most people outside of Norskaskoguin Surka has already been able to do this in Kilograms, now we're talking about 1,000 of tons. The market can probably take much more than this. And This is the growth story of the future that we can also replicate this several times over. Merck is a chemical distribution giant in the world.
It's very positive to circa and would think that they can do more than even what they have today committed for when the production is up and running, the 1,000 tons. Again, listed on the Euronext growth in Oslo, And we hold 26%, and we'll continue to support circa at its very, very exciting journey ahead. Also closer to home is Sabina. Sabina has been developed at the Sverdrup's Mill by our very competent Product development teams there and will indeed improve the sustainability for all products where which today is using solvents based on petrochemicals. This can be done in paints.
It can be done in epoxy. It can be done in different coatings. It Probably we've done in drilling fluids for the oil over time. And we had the 1st commercial sale of this in the Q4 of last year. 2021's big development will be in national distribution before we can upscale the present 500 tonne pilot plant that we have in Halton.
Again, something to look out for during 2021. The next product in the family of development at the Savericks Mill is something we call Sebiko, which is a composite of wood fiber and recycled plastics. So this will certainly reduce use of plastics, But it will also enhance the product applications and even the reduce the Pollution from plastics directly. This is a very, very efficient and durable product and can be used probably in all sorts applications where today plastic is used for long life. So piping and all those industrial usages, but also more We also tested out on more consumer based products, and this has also a very, very important future, we think, in The new world of air plastics will need to be replaced with fibers.
Concretely, we are putting up an extruder in This further and this could be also done in conjunction with other industrial partners over time. ESG reporting is important for everyone, important for Norskirk. It's not new to Norskirk. We have reported for many, many years, for decades according to the GRI standards. And we have, again, updated this and I think taken a significant step forward.
The annual report 2020, which is just out now in connection with our Annual General Meeting last week, is a significant Improvement, we have gone through a very detailed analysis last year, setting new targets. You can see the CO2 target here by a further reduction of 55% from an already reduced level in 2020. And there are a number of other initiatives and targets that we commit to inside of the sustainability reporting, something that we will continue to work on, follow-up and further improve, But we have taken significant steps already. To conclude this presentation, we will talk a little bit about the outlook for the short term and for the medium term. If you look at the market today, Operating rates in the industry is improving, particularly from March onwards, but we also see that going into the second half of the year that we will have improved operating rates.
That will normally lead to price improvements, and that will probably also happen this time around. However, in the very short run, in front of the second quarter, there is the increase in recovered Fiber and other input factors that we had to contend with. So the Q2 is still going to be a weak quarter. This is unsustainable. Everyone knows it.
Price improvements will come. We think that in the second half, we will see between 15% 20% price improvements coming into our books gradually from the 1st July. I'm now talking about Europe. Internationally, that has already happened. On the strategy development front, we expect the final investment decision for the Golbe Bay project, as mentioned, during Still the Q2 of 2021 with the start up of production in early parts of 2023.
The Australian operation, in particular, the New Zealand operations, we will also try to conclude during the Q2. That has faced some COVID delays as the travel restrictions into New Zealand and obviously globally has hampered progress a little bit as we would have hoped have more news on that today. Sabina, we think that an international distribution agreement is the next steps. That will happen this year and is probably the go ahead for an expansion also on our production capacity in Halton. And finally, I would like to remind all our customers that we will remain for a very, very long time a reliable supplier of all publication paper grades.
Despite the Interline Ragskorn, despite the Bruk and Golbe conversions, our product range will remain the same, and we will still be a competitive and reliable supplier of all publication paper grades. So on that note, I would like to thank you for your attention and wish you a very good day. Thank you.