Good morning, ladies and gentlemen. It's a pleasure to welcome you at the earnings call of Photon Energy Group for the first quarter of 2025. Today I'll be presenting the numbers together with our CFO, David Forth, to my right or left.
Yeah, this one.
Today's presentation will follow, I think, a very well-known structure. We will first run you through the business results and our most important segments. Then David will run you through the financial results. As usual, we'll also have space for questions that we will try to answer as best as possible. On the business results, we'll start with electricity generation, which we also refer to as investments, as they also make up the most significant part of our balance sheet. Here, if you compare the size of the portfolio to the end of the period, the end of the first quarter of 2024, the net increase in our portfolio was around 3.6 MW. However, there have been a few movements. We have, in the fourth quarter last year, sold our Australian assets, which led to a reduction of 14.5 MW.
Over those previous 12 months, we have added 12.4 MW in Romania. Specifically, in the first quarter of 2025, 5.7 MW of new power plants in Hungary, which for the time being appear to have been the last utility-scale power plants that we're adding to our portfolio in that country. In terms of electricity generation, the year-to-year comparison shows a relatively significant decline, and that is directly linked to the sale of our Australian assets, which, as they were based in the southern hemisphere, and Q4 and Q1 aligns with Australian summer, which means that their generation levels were at the highest. After disposing in Q4 last year, they were not contributing to our portfolio and generation results anymore. Therefore, the overall number has declined significantly as they were very strong in the production levels.
However, when we look country by country, we can see that we have, in three of our core markets, managed to outperform compared to last year. In the Czech Republic, we had a generation of 21% above last year's level. In Slovakia, we were slightly ahead with 6%. In Hungary, we've shown a significant improvement, only to a very, very small degree linked to those new power plants that we connected during the first quarter. They were connected in March, so their contribution to the Q1 volumes was negligible. Very strong outperformance. Where we have a shortfall is Romania, and that is linked to the switch off of some of our power plants, which are themselves linked to regulatory changes in the country. That is being worked on, and we expect these power plants, all of them, to be back online shortly.
These days, we should have one of them back, and we should be back to full power in the next couple of weeks. Just a few comments on the revenue model of our portfolio. As you can see, in Q1 last year, the vast majority of our production came from power plants running on the merchant model. This has changed significantly year on year, firstly, again, due to the sale of the Australian assets, which were running on a merchant basis, but most importantly, by the return of our Hungarian portfolio to the feed-in tariff as of April last year. That means right after the end of the first quarter. You can see that the stability of revenues has changed significantly year- on- year based on these two factors.
In terms of production volume, you can see that around 60% came from power plants that are in the merchant model. Looking at installed capacity, the shift was slightly less pronounced, but we're essentially now running on the composition of our portfolio is 50/50. Around 50% of the capacity is in a support scheme, and the other half is operating on a merchant model, which compares quite dramatically to the composition last year, where we were around 75% of our portfolio running on merchant. In the first quarter, we managed to increase our revenues despite the elimination of the Australian assets and despite the temporary reduction in generating capacity in Romania, largely thanks to the higher production levels. We managed to increase revenues from EUR 3.7 million last year to EUR 4.2 million this year.
This change in composition, because the Australian assets had relatively low prices, and for example, the Czech portfolio is still running on high feed-in tariffs, and they managed to outperform our average realized price per megawatt hour, which, of course, is the weighted average of a relatively widely distributed number of price points. We managed to increase by 39% from EUR 133 per MWh last year to EUR 185. I think we mentioned already during our Q4 call that we switched our Czech portfolio from the feed-in tariff from last year to the so-called green bonus system, which means that we are receiving the subsidy element separately from the electricity generation. Electricity remains available for us to be sold in the daylight market. This is what we're running on this year.
We can make this choice every year at the end of November for the following year. As you can see, this increase in revenues has also translated, I would say, disproportionately in higher EBITDA during the first quarter. A 12% increase in revenues has actually resulted in a 38% increase of EBITDA from the electricity generation segment, from slightly over EUR 2 million last year to over EUR 2.8 million in the first quarter of 2025. The next segment is engineering, which includes our engineering activities or EPC activities in Europe and Australia and New Zealand. Here we have, on one hand, been able to increase our external revenues. Here it is important to point out that our engineering teams are also involved in internal projects and built the power plants that then end up expanding our proprietary portfolio.
The numbers that we are referring to here and reported here are purely linked to the external business. On one hand, we've been able to increase our revenues by 30%. However, our EBITDA shortfall increased from EUR 345,000 to EUR 1.1 million. This is a combination of factors here. On one hand, the cost-related, so these numbers include the cost-related of all our EPC teams, which on one hand work on external projects. Here we have seen certain delays both in Europe but also in Australia in the CNI segment. Quite a few of our contracts have been delayed.
This also leads us to actually a piece of very positive news, which is that in May, after the end of the reporting period, we managed to sign our largest external EPC project yet, which is a 34 MW peak power plant that we are going to build for an external customer, Hyperion. They are first investment in the Romanian market. The contract is signed. Construction is expected to start more or less three months from now, and completion is next year. This is one of the projects we have been working on for quite a long time, that also we originally, let's say, 12 months ago, expected to be signed last year already and also to start contributing revenues to last year's results. There has been a delay. This is unfortunately a part of the game in the EPC business.
Very often, demand comes in waves. We have had some delay with this project, but we have also had delays with utilities behind the meter projects, both in Europe and in the southern hemisphere. A few words on our New Zealand project, where we are building as an EPC for an external customer. This was to date our largest external EPC with 21 MW. Here, we are expecting the project to be energized at the end of May or the first half of June. The project is already very advanced, and we expect it to be handed over at the end of the second quarter, early third quarter. This, of course, for us will be a very important milestone. The pipeline of projects, both for CNI projects but also utility scale, is strong and is growing.
We do expect our subsidiaries in both territories to show stronger performance during the rest of the year and to actually be contributing positively to our group results. The next segment is new energy, where I think we have been reporting and publishing news quite frequently. The story here is relatively simple. The volume of contract capacity year on year has been reduced or has been lower after 389 MW in 2024. This year, we contracted 326 MW for the full calendar year. More or less in line with the 16% declining contracted capacity, also our external revenues declined by approximately 20%, which is also due to lower prices that were achieved in the auctions for 2024 compared to the auction prices for 2024.
It is also important to note that, and I think we have also explained that already, prices, while the capacity is contracted for the full year, for four quarters, differ between quarters. The first quarter is strong in this business line, and so will be the fourth when prices that we contracted for are strong. In the second and the third quarters, both revenues but also the financial contribution to the group results will be lower. In terms of electricity trading, year on year, the trading volumes have declined by 16%. This is electricity traded across the three markets where we have trading licenses. That is the Czech Republic, Poland, and Hungary. From 38 GW h last year, we went down to approximately 32 GW h.
This is largely driven by the switch of the opting out of our Hungarian portfolio from the merchant model and opting back into the feed-in tariff. In the first quarter of last year, our Hungarian assets were still selling into the market on a merchant basis, and we were off-taking this electricity and selling into the market. As of April 1st, last year, just after this period, this volume was eliminated from our activity. This decline is more or less in line. That means that the rest of the off-take business has remained more or less stable in terms of volume. In terms of profitability, new energy contributed just slightly less than EUR 2.5 million of EBITDA in the first quarter of this year after EUR 2.7 million last year.
If you put it into context with a reduction in revenues of 20%, we've only had a reduction in EBITDA of 9%, which also is a testament to our cost control in this business line. The next segment we'd like to run you through is operations and maintenance, where you can see that year- on- year, we have a very positive dynamic in terms of contracted capacity, which went from 682 at the end of the first quarter last year to 1.1 GW peak at the end of the first quarter this year. While last year, this total was comprised of operations and maintenance, which means the operations and the technical maintenance of power plants, plus around 60 MW contracted by our subsidiary, Photon Energy Cargill, which specifically services central inverters.
There's a new category that has been supporting our growth to 1.1 gig on the management, and that is asset management. We have, over the last 12 months, signed asset management contracts with two customers in Hungary. We're very close to signing our first asset management contract in Romania and may do so over the next couple of quarters or in other countries where the service is largely different. Very often, these will be situations where we are not in charge of the O&M. Somebody else will. We are essentially the owner's representative, making sure that the project companies are compliant with their statutory needs, that the accounts and taxes are filed properly, that we would make sure that the O&M contracted do their proper work, that the power plants are insured and ready to reporting.
Essentially, all the elements that are necessary, all the tasks that are necessary to make sure that the project company is well represented. It may also include support in generating revenues. We may also support the customers in finding the best off-take arrangements and find additional revenue sources for their assets. This is a service that we have found to be in significant demand, particularly in countries which do not allow a customer base to sensibly install their own asset management teams because of the size of the market. Thanks to our presence and thanks to our experience, also the fact that we are providing exactly those services to our own power plants, we are seen as a partner of choice in these activities for the service.
As you can see, it is helping us growing our asset base under management and looking at our pipeline. It will continue being a very strong driver for our continued growth. In terms of external revenues, year on year, we have seen an increase by over 30%. Here again, I would like to draw to your attention that these are the external revenues, which means that these are the revenues that we charge our customers. In addition, of course, our O&M subsidiaries in the five countries where we are active are also providing O&M services to our own power plants. The revenues from these services are excluded in this table. Whereas on the cost side, there is essentially no adjustment made. What you can see as a result is that here we are reporting negative numbers.
Just to stay specific to Q1 2025, here we are reporting a loss of EUR 273,000. If we added back our group internal activities, we would have a plus of approximately EUR 150,000. It is due to the format in which we report our numbers, focusing on the external revenues. This specifically is in the area where there is a lot of group internal business. The important message is our O&M is as a business profitable. As you can see, the dynamics are also very positive. We are quite hopeful that even after stripping out the group internal revenues, we will actually have a positive number. At the level of the entities, we are profitable in this business line already. The next segment that has been, I would say, a very important and positive surprise in the first quarter of this year.
It is a continuation of what we've seen already in the fourth quarter last year. After changing our focus and also having new management in this segment, we have managed to grow our external revenues fourfold in the first quarter compared to the first quarter last year to over EUR 6.5 million. While this segment was a drag at our EBITDA level of almost EUR 400,000 last year, it is essentially breaking even in the first quarter, which in this business line tends to be among the weakest. As we have a new team and a new business focus, we also see the improvements happening rather on a week-by-week basis or month-by-month basis as we are expanding our customer base. It is definitely pointing in the right direction. It is a significant improvement.
We believe that technology will be a very important contributor to our group results for 2025. In the very last table, you can see that particularly in relation to modules, we have had a quantum leap after selling only, it was probably around 3 MW peak in the first quarter last year. We got to almost 60 MW this year in the first quarter. There is increased volumes in batteries. Actually, among those three main components that we are distributing, batteries will probably over the next quarters show the most significant growth rates as we see a lot of new projects coming for which our customers in the distribution segment are seeking components that are including batteries. This will be definitely a picture to watch over the next couple of quarters.
Before I conclude the part about the business, I would also like to highlight one project that we managed to complete at the end of the fourth quarter, early Q1 2025, which is a very important testament to our efforts in the PFAS removal. I think we have explained our in-situ water remediation technology in the past already and the results of our pilot in Australia. On that front, we are progressing in relation to commercial projects both in Australia and Europe. However, as the counterpart is our public sector institutions, they move at their own time. What I'd like to point out with this project, which is a first of its kind, at least for us, is that we are in addressing the problem of PFAS.
We definitely don't want to be only, so to speak, a single-trick pony that has one technology which it tries to apply. Our ambition is definitely to be a provider of the technology, but also a provider of solutions based on a project approach using multiple technologies. We were approached in 2023 by a company in the Czech Republic, Eurostroj, which is a company active in the aerospace field that I would dare to say was probably the first country. It's important to explain that PFAS only now starts being on the radar of various environmental agencies across the EU member states. Only very recently, the EU Commission has recognized the problem of PFAS. The World Health Organization is now jumping into gear. We're seeing lower and lower acceptable levels in drinking water.
Eurostroj was probably the first company in the Czech Republic that was identified by the Czech EPA as an emitter of PFAS in their wastewater. In order to address the needs of this customer, we developed a containerized solution to eliminate PFAS from the industrial wastewater, which was a result of the electrically heating processes. We have managed to reduce the very high levels of PFAS when we exited the production process by over 99.5%. Actually, when we really fully at the highest level of purification, we get even to 99.9%. What is more important is, we are not only removing the PFAS contamination, but we also make 70% of that water available for reuse in the industrial process. The result for this customer, and it is definitely a very important pilot for us, is that the company has become compliant.
Here, just to add, there's one or two additional units we may install with them as they have all the PFAS contamination in the rainwater runoff. Coming back to the production process, the company is removing the PFAS from the wastewater, saving them from potential fines. It appears that the regulatory framework in Europe is going in the direction where companies, the contaminators, will have to pay for the removal of PFAS going forward. There is definitely a medium-term threat for companies that release PFAS, not only of fines, but also of significantly higher costs charged by the water utilities. Last but not least, the 70% recycling rate also means that the water charges and wastewater charges are significantly reduced. On that last point alone, this installation has a payback of about four to five years.
Making sure that the company is compliant and is not at risk of fines or higher wastewater charges, that comes on top. Even without that, the payback is four to five years. This is a very important project for us. We see a lot of demand emerging as the regulatory framework in the Czech Republic specifically, but actually across the EU, is getting stricter. Strategically, it means that we have multiple technologies at hand to help various types of institutions, whether it is industrial companies, airports, or other known contaminators with PFAS chemicals to address their specific problem in a comprehensive way. This concludes my presentation of the business results and progress. I'm happy to hand over to David to run you through the financial results.
Thank you, Georg. Financial results. Let me get on top of the technology here.
This has actually been our best first quarter for three years. It does make us feel very happy, actually. We have improved our total revenues by 27%. The electricity generation up by 11.5%. Despite having exited the Australian plants, this, as Georg has already said, is a mix of the generation volumes being at better prices. Our other revenues are also much stronger. This is a mix of the technology, which has done very, very well. As we have said, we have now got a stronger team, a much wider geographic spread. This technology area does seem to be consolidating, and we seem to be winning in that area. In the other segments, in revenue terms, we have performed strongly, except for new energy, where the capacity markets and origination and trading have declined. The EBITDA at EUR 1.26 million compared to EUR 800,000 in the previous period.
This is mostly driven by better margins in generation and new energy. Within our comprehensive income, we've got positive EUR 3.7 million. That's partly because of us now commissioning these new assets in Hungary and also the effect of foreign currency translation differences. This produces total comprehensive income of pretty much nothing, but much better than previous year, where it was minus EUR 1.1 million. In the balance sheet, there's a small growth in fixed assets, mostly because of the new Hungarian assets. In current assets, we've reduced our inventories by EUR 2 million. That's mostly because of the impact of our new technology team. We've cleared out some old stock. And we've collected more in terms of our receivables. Our cash position remains pretty stable comparing the two over the quarter. In terms of equity, interestingly, it's not changed at all compared to the year-end.
This is partly because of the positive OCI, and it produces an Adjusted equity ratio of 25.3%. As we've said in our statement, the Hungarian regulatory changes, we would, under the terms of the bond covenant, be entitled to remove those. That would give an Adjusted equity ratio of 26%. Of course, the equity ratio is measured once a year on the bond contract. The important thing is for us to stay positive within the quarters. In terms of long-term liabilities, there's an increase, which is matched by a decrease in short-term. This is because of a reclassification of one of our loans, the EBRD loan, which at the year-end was treated as short-term. It's gone back to long-term. The current liabilities are reduced because we've reduced our trade payables. Of course, the reclassification of the EBRD loan.
In terms of cash flow, our operating cash flow is slightly down on the previous quarter, on the previous year position. Investment cash flow up slightly. This is really because of the completion of the Hungarian projects and some investment outlays related to our EPC, subcontinent EPC contracts. Financial cash flow down EUR 800,000. This is a mix of repayment borrowings and new borrowings related to the Hungarian plants. Net cash position in total decreases to EUR 7.9 million from EUR 8.4 million at the start of the period. Really a pretty good start to the year. As I say, it is our best first quarter for three years. I think it sets us off pretty well for the rest of the year. That would complete the finance presentation. In terms of guidance, there are quite a few moving parts, and we intend to issue a guidance statement shortly.
I think that takes us to the questions.
Thanks very much, David. A little bit of time to address the questions. There are a few questions on it today. I'll start with the first one, which is, what is the plan regarding the pipeline projects to build for our own portfolio to sell and receiving revenues from EPC and O&M? At this point in time, the most immediate pipeline for execution is a pipeline in Romania. Here we are, and just looking at what we have published and communicated already, our largest project, Ciuperceni, is in the process of being sold. We have engaged on an exclusive basis with a potential buyer. Here, the path is, at this point in time, it looks like we'll be selling the project.
The goal is also to lock in the potential EPC and O&M of the project. In relation to our other project, our other project pipeline in Romania, of which over 40 MW VC are ready to build, we are still in the process of securing the project financing, and where some of the terms are not finalized yet. Our plan A, I would say, is to build those pipelines for our own portfolio. We are also looking at other alternatives pretty much along the line suggested by this question, and maybe also not binary. We may go in one direction with one part of the portfolio and keep it for ourselves and sell the other one. The Romanian market is a tricky one, as I think we have been.
We also had to share with you over the last couple of months in terms of regulatory changes. At the same time, in the medium to long term, it provides some interesting opportunities. I think to answer the question more comprehensively, definitely for us, where we will want to allocate capital in the future will be a lot more around energy storage. Building PV assets only is definitely looking 12-18-24 months ahead going to be the main area where we allocate capital. It will be, at the very least, hybrid projects. Here, the most important part for us is to actually add storage to our existing portfolio, which is something we're already working on in Hungary and also in Romania. It may include investment into utility scale, energy storage.
At the same time, also external EPC, we see more and more of the projects including storage. The last area where we may entertain PV only beyond those 40 MW that we have in Romania is behind the meter. After completing the PPA project in Hungary last year, there is one project in the Czech Republic, and there is some additional pipeline. If we have a strong counterparty that is willing to sign 15-20 PPAs on a behind the meter basis, then that is still something we are interested in and working on. The second question is, how sustainable is the trading performance? Will it stabilize at Q1 levels, or should we expect continued growth?
I was very strongly convinced of the letter in the sense that what we did at the end of the third quarter, beginning of the fourth quarter last year, is that we brought in a new team from a company that was fully specialized in distribution. That team has significantly expanded. I think our market reach, I think we have also described that in some of our reports. While before we were very much focused on two, maybe three markets geographically, now we are essentially selling into 20 jurisdictions ranging from the Netherlands and Germany in Western Europe to the entire CE region, southern Eastern Europe. We are also exporting to Ukraine. Of course, we are also hoping that once the situation, and hopefully as soon as possible, comes back to peace, there will be even further demand for not only PV, but also energy storage.
Our furthest customers sit all the way in Romania. It is a much bigger, much better diversified geographical footprint and, of course, a lot of new customers. Of course, that is not taking away the volatile nature of demand and supply in PV components. However, what we have seen already, I think particularly in the last, or since the beginning of the year, so the last four and a half months, is that while module demand and supply continue being volatile and also pricing levels go up and down, energy storage batteries are much more stable in terms of the demand profile. It is also not subject to such strong price swings. As the importance in our revenue mix of batteries grows, the overall picture will become a lot more stable, not to mention that the gross margins achieved on batteries are higher than on modules and inverters.
What is stability? We managed to expand our customer base. We were also present with a booth at Intersolar just a couple of days ago, which again has helped in putting us on the map. As the distribution market for PV components and batteries is being reshaped in Europe, we're actually very confident that we are coming out ahead. We are seeing a lot of players that have been strong over the last couple of years either scaling back or, in many cases, actually going out of business and creating room for, I would say, committed long-term players like ourselves. I think we've been, if you look at it from a point of view of market share, we have been gaining in all the markets where we are present.
After two, three years of relative chaos in the market where manufacturers were selling to small installers just to get rid of product, we see now, also from many of the supplier side, an interest in bringing back the rigid structure into the market. That means that they will be relying on strong, committed, and reliable distribution partners and also understanding that bypassing them is not a good business. Here we see a lot of support, a lot of interest by the top players in all the three segments. That means modules, inverters, and batteries to work with us. On that basis, we're convinced that the trend we've been seeing over the last six months, now it's almost eight months, will continue. Of course, subject to certain disruptions, subject to seasonality. Other than that, we believe that this direction will continue.
The next question is, whether you're finding any bond buybacks given where the bond is trading. We have taken some bonds back over the last 12 months. Of course, it is also always a question and a function of our liquidity position. I guess, as we have done it in the past, we remain quite keen to do so also in the future. The extent will purely depend on how much liquidity is available for that. Clearly, when the opportunity arises, we understand the benefits of this. We will act accordingly. The next question is, can you tell us more about your role as an investor in RayGen? Are there already some visible benefits of this investment? What are company expectations regarding this investment? Will it provide an additional revenue stream? Thank you for that question.
I will try to keep it brief, although there's a lot of aspects to this. I'll start with our investment. We invested for the first time in 2020, AUD 2 million, another AUD 3 million one year later, in April 2021. We also participated in the latest capital increase, which only concluded recently, which we also published here. I just like to point out that the actual cash investment happened already 18 months ago when we subscribed together with other shareholders to a convertible bond where we invested another AUD 2 million. That cash injection happened already some time ago. Only now it was crystallized as this convertible bond was converted as part of this capital increase. We are developing the project in Yadnari, South Australia, where we are getting very close to the point of getting the development approval.
The last hearing before the issuance happened at the beginning of April. We are essentially now, I would like to say, in suspense, but expecting that within the 60-day period from that moment, which would come to an end at the beginning of June, we will receive the development approval. Of course, it is about the next steps, what to do with a fully permitted RayGen project in South Australia. That is something we are working on quite intensively. We have also announced that we are developing a project in South Africa where we have secured grid capacity. We are going through the environmental impact assessment, which is going well. The project recently made it to the so-called President's List of Strategic Projects. It has a different name, but everybody in South Africa calls it like that.
It is a highly visible project that is strongly supported by the South African government. There we expect to get all the permits in place at some point in 2026. It is the first time we are developing there, so we have to see. The fact that it is on the strategic project list should shorten the development approval timeline. All seems to be going in the right direction. The investment cost of these power plants is very significant. Very quickly, we are getting into the hundreds of millions of euros, which, of course, for us is well beyond our capacity to do that ourselves. Our role is definitely that of a developer. Here, I think what is important to note is that finding the right sites and then getting the permits in place is quite different to what you would encounter in a traditional PV development.
There is quite a long list of lessons learned when we were developing the Yadnari project in South Australia. We believe that this experience, plus, of course, the direct contact with RayGen, puts us at an advantage as we embark on the development of additional projects. The question is, revenues from this cooperation, then classic revenues, probably not. We do see a very interesting window of opportunity to create value, which means make money by developing projects based on that technology in the right jurisdictions, and then by monetizing those project rights in the right way. For that, it will be important. That is something that we are also working on now very intensively in relation to the South African project of getting in other interested parties, whether this is off-takers for the electricity, potential equity investors, or project financiers.
What is very crucial here is one of the other core shareholders in RayGen, which is SLB, formerly known as Schlumberger. They are the world's largest—well, they claim to be the world's largest engineering company. In the oil and gas sector, they definitely are. They are a very committed player in SLB—sorry, in RayGen. They will play a significant role in the EPC process towards investors and lenders. That support is something that should bridge the bankability question because it is a new technology after all. Of course, both equity investors, but also debt providers are quite sensitive to that.
Here, the next steps in relation to Yadnari will be very important in relation to who the investor will be, the final investor, but of course, also our South African project, plus other projects that RayGen is working on in other parts of the world. The value creation beyond the value of our investment, which I would also like to point out, is based on the last financing round, significantly above our investment cost. From that point of view, it has already been a good investment. We believe that there's significant opportunities in developing RayGen projects, if you wish, around the world at the moment in two jurisdictions. The next question is, what are your expectations regarding revenues from PFAS? We expect them to grow, of course.
What I would like to point out here is what we have found so far in relation to our in-situ technology is that counterparties that we have been engaging with, like the Australian Department of Defense, we've participated. And this is public knowledge. There is a very significant tender in Australia run by Air Services, which owns all of the major civil airports. I think we have presented our technology and ourselves very well. It's just that time runs at a different speed with these types of institutions, which is quite surprising given the fact that the media are monitoring the situation in Australia very strongly. There is a lot of pressure, also from regulators, from the EPA and others. It is moving very, very slowly. Of course, this technology will have its application.
I mentioned before, we are talking to some potential customers regarding commercial projects in Europe already. The topic of PFAS, of course, is much bigger. The unit I was referring to is a very important step going forward because regulations in Europe will become significantly stricter very, very quickly. There will be a lot of companies in need of addressing this specifically for their PFAS emissions. There is another very specific area that we are now trying to address, I would say, in a hurry. That is the upcoming ban for AFFF firefighting foams. That means that there are still a lot of firefighting foams that are in stock with professional firefighters, but particularly a lot of firefighting teams that are located at various factories and airports. There is a ban upcoming for one type at the 3rd of July this year.
That's an EU-wide ban where 3rd of July this year, April next year for a second old type. By then, unless you get an official exemption, you'll not even be allowed to own these firefighting foams, not use, but own. It appears that that is not as widely known as one would think. There are a lot of organizations now waking up to this fact and in need of replacing these firefighting foams with the PFAS-free foams. There is very, very little time left. It is actually something that has happened already to a very large degree in Australia. Our colleagues in Australia last year were involved in such a project. It's been going on, but it's still going on in the U.S. Here in Europe, a few institutions have done it.
There is still a huge disparity between what is still out there versus against this tight deadline. We believe that with the unit that we have shown you, plus something we're still working on and developing now very fast, we'll be able to significantly speed up the process and economize the process of exchanging these firefighting foams. The problem is, it is not about only pumping out the old firefighting foam and putting the new one in, but you actually have to sanitize the entire equipment. This can be sprinklers where all the pipes need to be cleaned from PFAS chemicals, firefighting cars, or even the whole infrastructure. The firefighting foam needs to be thermally destroyed. The liquid that's used in cleaning the infrastructure needs to be treated. We are very close to something that will significantly reduce those costs, which are enormous.
Just to give you a number, thermally disposing of one cubic meter of this PFAS firefighting foam at the moment costs between EUR 2,000-EUR 2,500 per ton or per cubic meter. That price may even go up. There are tens of thousands of tons across the EU. This is just a firefighting foam, but actually, this exchange is a whole project that needs to be carefully planned. We see a significant opportunity in the next, well, we expect these timelines to be shifted a couple of times because it is simply impossible to make all these removals in a couple of months. We believe this will be a significant driver. As we have more tools available, there are also more opportunities we can address. This is one that we are now focusing our minds on very significantly.
Coming back to the Eurostroj example today, there will be a lot of, and it is pretty well known in which industries PFAS contamination is a topic. We will be able to target those industries. As now it has become clear what principle will be applied across the EU, which is it's not up to the water utilities to address this problem, but actually the companies that are emitting PFAS chemicals, that they will be held accountable and liable. It is relatively clear which way to go and how to market these technologies. We have a technology available that is highly effective, and this pilot has proven it. It is very hard to plan in this phase, but I think we are really on the right track. We also expect this to be more and more visible in our results. Next question related.
In the past, you mentioned that PFAS is a big problem in the U.S. In the market, there is a huge one. If not, the biggest one, are we going to be visible in the U.S. with this technology as well? Good question. We are visible to some extent. We have been presenting our technology and the results of our pilot project in Australia at the Battelle Conference, which took place in Denver in the middle of last year, which is essentially for remediation, the most prestigious conference worldwide. There are actually representatives from the Australian Department of Defense, U.S. Department of Defense, which also is accountable for a lot of the PFAS contamination on U.S. soil. And pretty much the who is who. The technology is visible.
We are currently also preparing our participation in two grant programs by the U.S. Department of Defense as a way to get involved in addressing their PFAS problem. The U.S. Air Force has 800 sites across the world with PFAS contamination. Some time ago, I saw a list, which is actually frightening, how much they are above the regulatory levels. I mean, we are talking several millions of times. It is a major issue. We also believe that even under the new administration, this topic will continue being addressed. In terms of a full commercial market entry, the U.S. is a big market, but it is also a tricky market. We want to treat it with a bit of respect. We are trying to look for potential partners or even customers.
We have some customers in Europe that also have factories in the U.S. that have a PFAS issue. For us, this seems to be like a low-risk route into the U.S. market. At the same time, for us, it's important to gain more and more references in Europe, but also in Australia. The next step is to get a nice reference in the U.S. market. We're not going to just, because it sounds like a good idea, open an office in New York and try to conquer the U.S. I think we can see that in Australia, particularly when you're dealing with the public sector, timelines are very, very long. One has to work with that, but you cannot fully bank on these projects to happen when we want them to happen.
We're trying to find the right balance between public sector and private sector. We have recently seen that the response times in the private sector are significantly faster, particularly if there's strong regulatory pressure or what we call a compelling regulatory event, like for example, this phase-out of PFAS firefighting foams across the EU. That tends to focus minds. This is now something that's also focusing our mind on helping those companies affected by it. Good. Are there any additional questions? Because as far as we can see—Oops. Yeah. Okay. There's a thank you. It appears we have been able to address all the questions. We would also like to thank you for taking the time today, for your attendance. We wish you a very nice day. We're looking forward to our next call three months from now. Thank you very much.
Thank you. Goodbye.