Bergen Carbon Solutions AS (BCS) Earnings Call Transcript & Summary

Good morning, and welcome to Bergen Carbon Solutions' presentation for the second quarter of 2026. My name is Odd Stromsnes, and I'm the CEO of Bergen Carbon Solutions. As a reminder, we are one of very few true CCU companies. We continue to offer an attractive value proposition based on local development of sustainable carbon. And this carbon is a key component into all batteries. And these batteries are today produced with a massive greenhouse gas footprint, and mostly they are made in China. Our core CO2 consuming technology leverages electrolyzers to convert captured CO2 emissions into conductive carbon powders for advanced battery applications. Following our development progress of establishing a process for producing a consistent and well-defined carbon, we now redirect all our focus towards the product in general and the uniqueness of BCS CNT in particular. And the product is all about size, shape, form, but also purity, as small [ particles ] as possible with as much surface as possible, 1,000x thinner than hair, 10 to 100 nanometers in diameter with a surface area of 50 to 200 square meter per gram. These carbons are used as additives to increase the conductivity, but also the strength of the electrode materials into different battery applications. It's all about making small fuel tubes with a high surface area, however, from a new process, a new technology, making a product that is produced with a technology that is fundamentally different from the conventional products available in the market. And again, this is a sketch of the core of our pure-play CCU equity story. It's an attractive value proposition, especially in terms of the local circular and sustainable value chain, local BCS carbon production from a nearby large CO2 point emitter by using the direct or indirect flue gas as a feeding stock for our CO2 consuming technology. Subsequently, the harvested BCS carbon powder will be put into batteries as conductive or strength agents, making the batteries better and making them more sustainable. We have already proven our ability to produce valuable carbon directly from a large CO2 point emitter during our Enova-funded project a couple of years back. So this is indeed a true full-scale CCU project and shows there are alternative to costly CCS projects. For several large CO2 point emitters, this could be an interesting surplus technology to other more general CCUS solutions. Europe is moving from global supply chains to more local and controlled industrial production. A key measure here is made in Europe. Public funding and procurement will favor European-made products going forward. And this is especially important for batteries with stricter rules to European content over time. New rules will limit foreign ownership in strategic sector, which batteries is, and more focus on keeping the technology and value creation within Europe. The EU passports will be rolled out from early next year. And we think the increasing geopolitical uncertainty will definitely accelerate this process as a whole. CNT is defined as a critical raw material for batteries. And as I said, most of it is made in China today. There are only a few CNT players in Europe. And that's why CNT is included as part of the Norwegian Research Council and IFE's development program for establishment of a Nordic battery value chain towards the defense in general and the drone industry in particular. And there will be probably even higher, tighter local requirements for batteries for military purposes, and local requirements will, to an increasingly extent, also apply for the battery raw material itself. Will we accept to operate European-made drones supported by Chinese battery technology, made by Chinese raw material? I'm only asking. And then, over to the results for second quarter. In order to summarize, I would say that we shifted focus considerably from process maturity, consistency and output towards product development and BCS CNT performance towards battery application. And we have seen over the summer quite a few promising performance results for several applications. The patent milestone is reached with notification of intention to grant received from NIPO for the company's CO2 separation and purification technology. We maintain a strong financial position with a stable and low burn rate. And the battery lab and industrial testing continues, supporting ongoing sample testing with partners in Europe and in Asia. So our financial numbers continue to be robust. We are seeing a 33% net reduced cash burn versus first half of last year. And this gives a cash burn last quarter of NOK 11.6 million, and we anticipate to maintain this level going forward. As we have said before, very limited CapEx is indeed needed, and we have a cash position now of NOK 122 million. And that can be considered as a conservative number as we are excluding future soft funding into this. So we believe this puts us in a favorable position. In addition to a first-mover advantage and an in-depth know-how, IP initiatives such as secrecy and patents are indeed important. And we have maintained an adequate secrecy level over time. But we have now done some good progress on the patent side. Notification of intention to grant is received, as I said, from NIPO, which is Norwegian Industrial Property Office, for our CO2 separation technology. And this covers purification and handling of the carbon-contained materials derived from CO2. It enables recovery and reuse of key process inputs, supporting a long-term cost efficiency. It also confirms the application meets the novelty and the inventive steps. And it's also important to say that we are also continuing to pursue other IP protection initiatives in the relevant technology areas. This is ongoing on a continuous basis. This is indeed a technical slide, and it's aiming to visualize one of our key unique characteristics of BCS CNT. Our CNT is produced in clustered fluffy structures with great ability to be compressed and then to retract to original position, like a ball of steel wool. As you can see here, we compress it and we are retracting it. And that's what we call a spring-back force. So it's quite comparable to explain our CNT structure as a ball of steel wool. Call it elasticity, and this can be a distinct advantage for certain battery applications. We see a considerable growth to the global market for silicon-based anode materials, batteries. And high elasticity will, in this respect, be particularly relevant as one of the technical challenges with silicon-based anodes is the large volume expansions during charging, actually as much as 3x the volume expansion. I can also, in relation to this slide where we are talking about our uniqueness, confirm a growing confidence in our ongoing testing of LFP chemistries, as well as our promising R&D results from our lithium-sulfur battery testing. BCS CNT powder currently is being tested with several industrial companies, and as I said, both in Europe and in Asia. And first round of feedback from some of the companies are already received with promising input. Engagement with partner companies is increasingly focused towards the technical and the R&D environments within these companies, rather than the supply chain and the procurement functions. As this is a new technology we are offering, we are very pleased to now receive constructive comments and clarifications as part of this iterative testing process. I would undoubtedly say that the more partner iterations we receive, the better. This means the industry is interested and curious of our technology. And we perform, as we have said, testing for different purposes and different application areas, reflecting the multiple ways BCS CNT can add value, a traditional conductive additive in LFP or to use in silicon anodes, dry electrode formulations or screening for some resin applications. So in sum, there are a number of different applications our BCS CNT now can be applied to. So, in order to summarize, I would say, our execution is going as planned. Samples are sent to quite a few industrial partners with, what I say, a dynamic feedback process ongoing. And the first responses, as I said, they are positive. We have reached the patent milestone with notification of intention to grant, and the patent is now in force. Strong financial position with a steady low burn rate. And very importantly, we have shifted focus from process development to product development towards battery applications. So we will talk much more about the product than on the process going forward. So thanks for the participation. And we are now opening up for Q&A, if there are any. Thanks.

Okay. This Q&A session is moderated by Fredrik Oksnes, CCO in Bergen Carbon Solutions. With us today, we also have Petter Slyngstadli from Norne Securities. Our first question, Odd. You're mentioning different chemistries. Which of these chemistries do you believe BCS will penetrate the market with first?

Okay. The race for different battery chemistry is, as you know, ongoing. And the carats or what they are all working on is high energy density, as high effect as possible, low cost as possible, and HSE principle to be reduced, and obviously, the availability of the raw materials. And I mean, there are some chemistries, which today are in the market as LFP, NMC, et cetera, that is commercial products as we speak. And then, there are other chemistries which are being developed, a number of chemistries. I have mentioned sulfur and silicon anodes today. And I would say that we could play a role in all this. I think that with what we are presenting here now with our uniqueness, it is more relevant probably for some chemistries than for others, but this is something we need to spend much, much more time on investigating. But as I said in my presentation, we are basically testing for chemistries which are today commercialized like LFP or some of these future chemistries. So we are pretty pragmatic, I would say, to this.

These unique properties that you have shown here also today, does that make BCS CNT harder to qualify than traditional materials?

That is a good question, Fredrik. I mean, I think generally, it's always difficult to bring a new product, a new technology into the market, and the battery supply chain is very, very complex. And I think it is maybe difficult to explain how complex it is, and there is a certain conservatism into qualifying it here. What we definitely have learned here is that in order to appreciate the uniqueness of what we do here, we need to talk to the qualified clients. [ With all ] due respect, if the discussions start with cost per kilo and when are we going to make our first factory, then we won't have a constructive discussion. What we are emphasizing on now is to be as good as possible to describe what we make, the pros and cons basically, completely open. And if we then are sitting over the table with the right clients and the right environments within these companies, they are the ones proposing where they might think this could add value. And I mean, this dynamic is very good. We are not telling them where to use this. They need to come back to us. And that is what we do now. That is very difficult -- different than what we did for some time back.

And then, a question I think we have every quarter presentation. When do you believe that BCS will sign its first sales agreement?

I mean, of course, we are working on this every day. I will definitely not promise any time line here. But the fact that we now have a good process for several good companies, at least that is what I can promise, and that's what we're working for to keep up with as many serious companies as possible in this marketplace, and we'll see what comes out of it.

Okay. Petter, do you have any questions?

Yes. So the notification of patent grant, can you tell me how it's sort of -- how it refers to the patent you might have gotten from the recycling of electrolytes? This is a different...

No, no, this is the same.

This is the same. Okay. So it's tied to that. Okay.

And of course, electrolyte -- or yes, the melted salt that we use is quite considerable part of our OpEx. So I mean, by the fact that we are able to reuse over 90% of it by this technology is really important for our cost situation.

Okay. And the testing at third parties now, it's, as I understand, pouch batteries. So it's a step-up from the coin cells to bigger batteries. So this might be a critical step-up.

That is a good question. I mean, what we do internally here in the battery lab is only on coin cells. And next step-up is doing it at the pouch cells, larger battery structures. And we are doing that now with several of these institutes, companies, and we will do more of it. So I think that is the next step-up in order to progress this qualification.

So pouch is like [ ice hockey ], right?

[indiscernible]

Yes. Okay. So it's a bigger entity.

Yes.