Capsol Technologies ASA (CAPSL) Earnings Call Transcript & Summary

Welcome to this presentation and Q&A with Capsol Technologies, hosted by Investorweb. My name is Kari Hartvedt, I work at Pareto Securities as an equity research analyst and cover Capsol Technologies, which is one of the very few publicly listed carbon capture companies. It is listed at Oslo Børs with a market capitalization of about NOK 700 million and has developed its proprietary technology in-house for over 20 years and invested over NOK 700 million in its business, meaning that the company is currently priced below invested capital. If you're interested in getting exposure to the capture -- carbon capture and storage industry, this represents a capital-light opportunity. Capsol does not take any construction or balance sheet risk. It does not invest in building the projects, but it has an efficient business model centered around selling technology licenses. Licenses are sold at EUR 10 to EUR 15 per tonne of annual carbon capture capacity, meaning that 1 million-ton project, which is about the size of Stockholm Exergi, would equate to about NOK 100 million to NOK 175 million in licensing revenues. And with a run rate cost base of about NOK 75 million, Capsol is in good shape to receive new licensing contracts as the CCS industry keeps moving. We think it's an interesting investment case and look forward to learn more about the company here today with Ingar and Wendy, CEO and CFO; Wendy Lam being the CEO and Ingar Bergh being the CFO. So please educate us further, first representation and then through a Q&A. The word is yours.

Thank you very much, Kari. And thank you all for joining us today. I will present to you a short presentation around Capsol Technologies, who we are and what some of our recent results have been that were released last week. What you see on the front here, I'll start off with is a picture of one of three demonstration units that we have operating at customer sites that are actively capturing CO2 today. And this particular picture is important because this is the first time we are doing it, this kind of demonstration on a cement plant. This one is with SCHWENK from Germany at a site of one of their operations in Lithuania. And we already have a second campaign signed up with a cement producer Holcim lined up for Q2. So I'll tell you a little bit more about this. Let's just take a big picture of what carbon capture and storage looks like first. So along the CCS or carbon capture storage value chain, Capsol is delivering the capture technology. This particular picture is showing what a project can look like. This is for a biomass facility. A biomass facility takes biomass, burns it and provide heat and electricity to its community, and it's already considered carbon neutral. So we have customers who burn biomass. Even though they're carbon neutral, they're looking for opportunities to capture carbon because that presents a carbon-negative opportunity. So what we do as Capsol is we provide the full plant design in the form of a license for this capture plant. And you can see in this picture, it's that middle building next to existing facility. What happens after the capture is that the CO2 is put on a ship, this is what is typically happening in Europe, put on some kind of transport, in this case, a ship; where it goes to an offshore injection station and then injection deep in a reservoir offshore to make sure it stays there so that it becomes permanent storage. And projects like this are very significant and important for the environment and for the industry. Each month, a facility like this biomass site can produce 100,000 tonnes of CO2 again per month. How much CO2 is that? That is equivalent to the weight of a small aircraft carrier. And although those emissions are invisible to the naked eye, we know from society and what we experience every day that the effects of those CO2 emissions are becoming more and more visible. So this is what Capsol is working on, capturing CO2 from industrial facilities. A little bit more of an overview of who Capsol is. As Kari has already mentioned, so we are one of the very few publicly listed carbon capture technology companies in the world. We are a capital-light licenser of carbon capture technology, and we are offering a combined carbon capture and heat recovery or heat generation system in one. So carbon capture takes a lot of energy, and that is actually what makes it costly. We have found a way to capture the carbon in a very efficient way and have shown that with our customers and studies and through other independent studies, have shown that our capture cost can be 20% to 60% lower than incumbent solutions that use in amine chemical. We are using a completely safe solvent called hot potassium carbonate, which in combination of the safety and the low cost makes it an attractive value proposition for our customers. This low cost is driven by a lower energy consumption because of our patents and design. 0.5 to 1.5 gigajoule per ton of CO2 is what we can use for are capturing CO2. And we can get numbers even lower than that, if there is extra heat or energy available from the industrial plant. We are a company that has been built on decades of experience using a chemistry that has also proven over decades. Hot potassium carbonate as a solvent to use for carbon capture has been used in precombustion applications for many decades. We have just now designed it for post-combustion or industrial facilities. And we've already achieved over 17,000 hours of demonstration in those demonstration plants that I showed here at the beginning. So that is building our knowledge base. And now we have the biggest team of HPC experience in the world for post-combustion. And our mature project pipeline is now also over 17 million tonnes of CO2 capture capacity per year. This is a growth of 45% in 2024 versus 2023. Okay. Now moving on to the next slide, what I'd like to share with you is some of the highlights that we shared with the market last week. We have been making incredible progress in the last year. Our revenues have increased 2.7x to now over almost NOK 95 million. Our pipeline, as I mentioned already, has showed a growth of 45% to over 17 million tonnes of annual capture capacity. I'll share a few more details on that in a moment. But what I'll say right now is that, that represents over EUR 200 million of revenue potential. And actually, it's licensing revenue potential, so it's actually almost -- it's gross profit, that is our potential in FIDs over the next 3 years. So our technology is continuing to be verified by industry leaders. Stockholm Exergi has a BECCS project, Bioenergy with CCS project. It's basically the picture of the project I showed you on the previous page. That project is set for FID after now receiving EUR 1.7 billion from the Swedish Energy Agency. This project is one of the largest CCS projects in the world once it goes FID and I think the largest that will produce is biogenic CO2, and it's using Capsol's technology. This project has also attracted to one of the largest CDR or carbon dioxide removal agreements in the world with Microsoft. And in addition to the Stockholm project, we are seeing very strong commercial traction with large industrial customers, such as Holcim and SUEZ. Third in our highlights, we continue to drive performance and build our potential to capture value for the future. In addition to that current pipeline I mentioned, we have also launched an R&D center in Q4 in Stavanger, Norway, where we are continuing to optimize our solvents so that we can be even more efficient on the capture process. And we also launched an R&D project with Stockholm Exergi, KTH and also a company called AirZyme to look at bio-based additives to improve the solvent. Finally, now we are operating with a business model that is fully funded with $64.5 million in cash. I'd like to expand a little bit on our commercial pipeline. Actually, since Q3, we've achieved projects and signed on projects with a number of large industrial customers. This is some of the progress we made over the last year because we are advancing how we play in the market into, I'll say, the bigger leagues. And these are examples of some of the projects we have signed. The first one is a project with this European cement plant, where we progress from a feasibility study to a pre-FEED going against some of the largest competitors in this space. Second, we've also signed on with a large European utility that has operations in Germany, the Netherlands, in the U.K. and also a little bit in the U.S. We have been signed on to a study one of their energy-from-waste projects in their portfolio. This is a company that has also studied carbon capture with many other technologies. Third, Holcim is a name you may all recognize. It's one of the largest cement producers in the world. And in addition to work we did with them on some studies last year, they have now signed on to demonstrate our technology at one of their sites in Southern Germany. And this is part of a larger cooperation agreement. Fourth, we have SUEZ, a very large French circular waste and water treatment company that has also studied CCS in a number of ways and has also seen the value proposition Capsol can provide, and we will be doing a study on energy-from-waste with them. And the second from the bottom, what's very exciting is we've also attracted the attention of large international energy companies. So we have now signed on a project study to look at a refinery for this company. This company has also a number of other projects for carbon capture that we are starting to evaluate. And then the last one is a third cement producer in Germany. So as you can see on the list of 6 projects, 3 of them are cement plants, which is representing a large area of growth for us. So behind that traction, how we are quantifying our mature project pipeline is in million tonnes of CO2 capture capacity. This is because our business model is based on licensing fees on the capture capacity of a plant. And this 17 million tonnes that we have now is represented by paid work with various customers. And how you can see this represented is this paid work is in the form of engineering studies that are paid, the CapsolGo demonstration campaigns and also license agreements. And this is what we have achieved, a 45% growth in the last year. What I will say is behind this pipeline is we also have over 100 project leads, where we have done a number of sales engineering. And through the process of evaluating and working with that funnel of 100 projects, we are filtering for the projects that have the most likelihood to come to FID in our priority of work. I'll share another view of this project pipeline, and this is looking at the industries where we are gaining traction. About just under half of that 17 million tonnes of capture capacity is in a sector called biomass and energy-from-waste. So this is where companies are burning biomass or waste to generate energy. And they are looking at carbon capture solutions because it's a new business opportunity for them to get extra revenue. And they like Capsol solution because of the low energy consumption and because the solvent is safe so that one of these facilities can be sitting in a residential area and the environmental permitting can be easier. What's also very interesting for these customers with our technology is that we can generate extra heat from our system. So the Stockholm Exergi project that I mentioned is actually going to be generating extra heat from our system and injecting it into the district heating. The second sector that I've already mentioned a little bit already is the cement sector. Companies here are looking at carbon capture to stay competitive for the future. And again, they like our solution because of the low energy consumption. And they also like that our way of integrating our plants with their plant is easy, it's end of [ height ]. We don't need to produce extra electricity -- or sorry, extra steam or water to make the plant work. So this has become an attractive sector for us. And then thirdly, we have not put a number to the capture volume in our pipeline for gas turbines, but this is representing one of the most exciting areas that our technology can serve. We are providing with our solution an option for clean power using gas turbines. And because of that energy-efficient way of capturing carbon, we can take that high-temperature exhaust from a gas turbine and use that to capture that-low concentration CO2 here. And we are already working with leading gas turbine providers on that solution. So I'd like to also just come back to the Stockholm Exergi project that I've mentioned in our highlights. The Stockholm Exergi project is in the middle of Stockholm. This is a biomass plant, it is the example that I gave at the beginning. And this project is planning to capture 800,000 tonnes of CO2 per year. It is the largest project of its kind at this stage. And they have signed a license agreement with us. This license agreement was already signed in 2022, and this represents our flagship project. This project in the CO2 capture capacity is larger than the Celsio project in Oslo and the Brevik cement plant combined. So the world is really looking at this project. And this project, the FID is being planned as soon as possible in 2025. They have already achieved a number of milestones to make this project happen, including EU funding of EUR 180 million environmental permitting using our safe solvent. They have the agreement with Microsoft for the largest CDR agreement. They also have carbon removal agreements with Frontier and others. And that most recent funding that was granted at the end of January by the Swedish Energy Agency of EUR 1.7 billion. So we are very excited about this project, and this is going to further validate Capsol's technology in the world market. Now I'd like to pass it on to Ingar, who's just going to explain a little bit about our business model and give you a few financial highlights.

Thank you, Wendy. First, let me provide a short refresher on our business model and where we are in the implementation of this. As Wendy touched upon, the technology licensing model is built to leverage our world-class technology platform. It's capital light, we do not need to invest in any plants or factories. It has zero CapEx risk, meaning we do not expose our balance sheet when we deliver to projects. And finally, it's a high-margin model. We are targeting between 40% and 60% pretax margins on the corporate level. So how do we implement this model? Let's use a cement project as an example. They're going to capture 1 million tonnes of CO2 per annum. The way we typically start is that we deliver a paid feasibility study. Then, if we are a good fit, we progress to more advanced engineering studies. These engineering studies, typically, we get paid between 50 and about EUR 500,000 per study. Then if the clients want to, we can also do a CapsolGo demonstration campaign at the project to further derisk the implementation. Once all said and done, we have done enough engineering work to move to a final investment decision. Typically from the first paid study to a final investment decision, we expect between 12 and 24 months to have run. So then we sign a license agreement, the company makes the final investment decision, and we start to get paid on our license. For 1 million tonne plant, as Kari touched upon here, it is between EUR 10 million and EUR 15 million in revenue, and this revenue is very high margin, more or less 100% pretax. Further, once the project is up and running, we are working on requests from our clients and others to put in place a number of high-value, high-margin services to generate revenue for the duration of the plant operation. This, we take all the knowledge we have and all the learnings we have from these different projects, and we help the client to run more efficiently, cutting a good percentages of the OpEx every year. That is the ambition. Then very briefly on the finances. So we recently did our Q4 report and the full-year numbers. We had a quarter-on-quarter revenue increase of about 2.25x. So the revenue for the quarter ended up at NOK 36.1 million. Annual revenue was up 2.75x over last year to NOK 94.2 million. Demonstration campaigns and engineering is still the main revenue driver. However, in Q4, we booked our first license revenue, which was a milestone for us. With that, we ended up also with our first quarterly profit of NOK 3.2 million and negative NOK 32.8 million for the full year. As mentioned, the licensing revenue came from Stockholm Exergi. When we signed this agreement back in '22, we gave them a significant discount. If we had the pricing that we are pricing our contracts at today, one such project on its own without any other revenue would be sufficient to run a profit -- full-year profit for Capsol Technologies. Thank you.

Thank you, Ingar. So I'll just end our presentation by just sharing with you some of the milestones we are expecting over the next 6 to 12 months that help derisk our path towards long-term goals and revenue potential. The Stockholm Exergi FID, even though we have already a light -- booked our licensing revenue, the FID is going to represent a next level of validation for our technology. Our CapsolGo demonstration units, we are now already about 70% booked. We expect to fully book at that capacity very soon. We will continue to sign new licensing agreements, bring our Capsol solution for the gas turbines, CapsolGT to the market and continue expanding on our industrial international partnerships in our go-to-market and enhancing our services to the market. So we're looking forward to these milestones, and we also are building our value for the longer-term future as we continue to learn more about these projects with our customers. So that is our presentation for today. And I guess I'll invite Kari back into the picture to lead us through our Q&A.

Thank you so much, Wendy and Ingar, for your presentation. [Operator Instructions] I think we will just dive right into it. At the very beginning of your presentation, Wendy talked about Holcim being one of the largest cement producers in Europe, have multiple plants throughout the whole of this continent. And we know that you are delivering a CapsolGo demonstration unit to Holcim. And what do they need to see from both the demonstration campaign but also from other parts of the industry, what do they need to see in order to make the first FID, the first final investment decision for our carbon capture project?

Thanks for that question. So any time we demonstrate our technology at a customer, whether it's cement or others, it is an opportunity for the customer to learn about how it works. If you think about a cement plant, they are making cement. And then to put a carbon capture facility next to it, it's a totally new process. So what the demonstration campaigns allow our customers to learn is that using potassium carbonate that it's possible to capture CO2 of the back of the [ flue ] gas of a cement plants or any other plant. It shows that we can achieve high purity on that CO2. We can , we've shown that we can achieve food-grade level purity of CO2 in our process. And it also gives our customers a good chance to share with their stakeholders. So this is important. You mentioned how to get the FID. There are a lot of decision-makers that go into the approval of a plant for FID. So helping stakeholders understand more what it is and why a particular type of technology is better. So a lot of our customers not only use the demonstration campaigns as a study, R&D or technology learning type of patches, they invite the local community, they invite the members of government and also investors today. So that's a little bit about why we do that. And then for cement, it's 78% of the world's emissions. So they need to do something about emissions.

And just to elaborate a bit about the CapsolGo unit, I guess you have learned a lot about the different exhaust gases both from cement and waste-to-energy. What have been your learnings regarding the different types of gases? Have you adjusted your technology or design in accordance with your earnings for the various demonstration campaigns that you have already completed?

Yes. So I'm glad you brought this up because with these -- the 17,000 hours of demonstration experience that we had, along with what we're doing in the lab, we now have the most experience in industrial flue gases with potassium carbonate. And yes, we've learned a lot. If we were to build -- if a plant was to be built without that experience, you could say that the plant would not be as optimized as with the learnings that we have. So what you learn about a plant and actually all of our customers think they know the flue gas properties of their plans really, really well; but there's actually a lot of variability, peaks and extremes of that flue gas that really needs to be taken into account when you engineer a plant. So that understanding is there. And that gives us as Capsol the ability to look at how we can optimize, of course, the plant and the energy balance and all of that. But it allows us to also think about what are future additives or additions we can make to the solvent and make it work even better. So we're just at the beginning of that journey, potassium carbonate for post-combustion is just at the beginning. And we're really excited about what we can do to make it even better.

And that's kind of from the investors point of view, but -- as you mentioned, the different flue gases, but also from a storage -- transport and storage point of view. When I talk to you, for instance, Aker BP or Equinor, flue gas, they said that one of kind of the engineering challenges that they are seeing is how to get the CO2 to be most unified and the most homogeneous stream of captured CO2. Have you had any kind of feedback or talks with the transport and storage space of the value chain?

Yes. Absolutely. One of our publicly named industrial partners is a company called [ Storega ]. They're working on development of storage facilities and linked in to transport. We've already been having discussions around sort of carbon capture-as-a-service. And for that to work, for any storage to work, they need to know what kind of CO2 they're getting. They actually have a spec for what needs -- what is perceived. And we know from our work with customers that we can meet that standard, and it's important that we are talking to each other. And ideally, in the future, an emitter will just say, "Hey, can you capture my carbon and take care of the storage? I don't need to know is that what the storage needs, but take care of it." So we are really that interface between the factory and the storage.

And just to elaborate about the learnings and the R&D, you have recently opened a new R&D facility in [ Starangi ]. And could you please tell us more about that? And what your goals are both short term and long term for this new investment?

Sure. I'll mention a little bit about and then I'll also ask Ingar talk about what the potential of having a facility like that is as well. So the R&D and the demonstration campaigns -- [ the R&D ] center and the demonstration campaign allows us to understand more intimately the physical properties and how the solvent acts in real life. Although I believe a lot in digital and AI, you can't simulate everything. So it's really important that you are testing certain conditions to understand how things work. So like when you design that plant, it is optimized. And so there's the optimization element, but this also -- we're finding some really interesting opportunities for future revenue growth. So maybe Ingar, you can expand a little bit on how we're thinking about how you're doing R&D.

No certainly, I've touched a little bit upon it when I went through the business model. HPC is an excellent chemical process to capture CO2. Our IP makes it very viable for post-combustion carbon capture, which is what we're talking about going forward. There's not been a lot of research in this space. So there's probably, and we're finding a lot of low-hanging fruits we can gather here. We're already very competitive. But with these additional low-hanging fruits, we can get the lower energy consumption, more homogenous how we get this CO2 and all of these things. So we believe there are great potential both in reducing the upfront CapEx here. making it even safer and cheaper plant, but certainly on the OpEx by figuring out smart ways to improve the solvent to get the few extra percentage point of the energy bill, which means millions of euros for the clients. So this is what we're working for and finding also the right commercial model to implement this. We want to bring value to the client, we're not sort of in it just to force them to buy something for us to provide guarantees, et cetera. What we want to do is bring real value and of course, get compensated for this value.

So for instance, the Stockholm Exergi project, you have already received the licensing fee. But on the back end of this new R&D facility, are there any new kind of business that you can add back to Stockholm Exergi and then get paid for in the future?

It's a very good question. And as we see these plants come to life where our license is, so Stockholm is the first one, and we naturally see an opportunity to stay with that project and learn form it and provide additional services. We are already being asked by customers. So there's opportunities, and Ingar has already touched on a little bit, how can you keep that solvent optimized? How do we -- how does that customer get the latest blend going forward? There may be solvent optimization and replacement as well to support the -- replacement as the process goes through. And then there's also digital process monitoring. So there's all of these things that we are already looking at today. So there could be even more revenues to reap from Stockholm Exergi going forward, possibly in every single project that we look at because building the plant, getting FID on our plant is just step one. Once -- these things are meant to be running for many, many years, and we do see an opportunity to grow alongside that.

And Stockholm Exergi will, of course, eventually become a breakthrough project if financial investment decisions taken. I know that they have planned to make this a reality alongside with Capsol Technologies for many years. And what was their main reason for choosing your technology? There also competing technologies out there.

Yes. So the incumbent solution I mentioned earlier is amines. It works really well in that carbon capture process, but it is also toxic. It's -- and it's a challenge to handle that in a safe way in the environment. So the Stockholm Exergi plant is in the middle of a residential area, as I alluded to earlier, and the safety of that process that's being used for carbon capture is very important to the community, to many stakeholders around. So HPC potassium carbonate -- and by the way, for listeners who are not familiar with potassium carbonate, it becomes baking soda when you combine it with CO2. So that safety and that solvent is really important. And then as I mentioned, because our system has this combined heat recovery and generation system, we are able to generate extra heat without auxiliary equipment that other people may need to add. And we're using that extra heat to inject into the district heating system. So that is, you can say, an incentive or revenue potential. And also, there's just been a long relationship between our companies over the years. Stockholm Energy has studied potassium carbonate for this process over the years as well, and we'll continue to collaborate. We already have this research project along with KTH and Airzyme to enhance the chemistry.

You mentioning KTH, Stockholm Exergi, you have also these projects in other parts of Sweden as well with the CapsolGo demonstration unit. Just mentioning [indiscernible], do you think that the next carbon capturing storage project in Sweden will also use your technology?

There are many projects that we are involved with. You saw the 17 million tons of a mature project pipeline. Some are in Sweden, we have Germany, we have projects all over Europe. So I can't guarantee the next one will be from Sweden, but we do have a very interesting pipeline, and we do see a very friendly environment in Sweden for that next project. Maybe Ingar, you can comment on what some of these licensing agreements are looking like.

Certainly. Well, first of all, we are doing and have been doing a lot of work in Sweden, which is very nice. Of course, Stockholm moving ahead will, I would think, significantly increase the probability that the next project also is a technologies project without any guarantees on that. For our Q4 and also a bit here, we went through -- we're starting to see the visibility on FIDs over the next 3 years. So going through our portfolio, we see about 13 million tonnes of potential FIDs in the next 3 years. Most, if not all, in Europe still, quite a bit in Sweden, but we also see quite a bit in Germany, where we also have been operating for a while with CapsolGo demonstration campaigns and built really good relationships. So we have signed 3 license agreements, one of them being Stockholm, 2 others being European. In theory, one of them can go to -- or we can see FIDs by end of this year. More realistically, we will get over into '26.

And then just building on that, your pipeline with paid studies and engineering equates to about EUR 200 million of potential license revenues. And what can Capsol Technologies do in order to demise these projects for the customer for them to move closer to final investment decision?

So for something to come to FID, you need the storage, you need to transport, you need the funding. So there's a lot of different elements that come together. Our customers do ask us for advice and introductions to parties we know of. So we are definitely helping them as much as we can. I wish we had more direct levers on that. With the current business model, we are a licenser. But I think making these connections and helping them along and also showing that really strong business case with a lower capture cost is already playing a big part. But based on what we're seeing in the kinds of traction from our customers, not only in Europe but even in North America, there's -- we're excited that there will be more projects to come. And the world needs it as we see. We're already behind what the targets say we need to be .

Yes, certainly. Our calculations, we only have like 5 years left, if we continue on the emission trends we are on at run rate at the current. We will not be able to do so the next more than 5 years, if we are to reach the 1.5 degree target. So time is running out and the emission budgets are running out. But as you touched upon, Wendy, it's also a lot of exogenous factors, meaning government and support schemes that will impact on these projects mature until FID. And we are seeing kind of different signals. From Europe, last week, we had the EU announcing the Clean Industrial Deal. On the other hand side, we have Trump in North America and -- imposing more risk to the IRR and also the 45Q tax credit. How are you looking at this regulatory space?

Yes. Well, one comment I'll make about the Clean Industrial Deal, what I think is exciting about this is [ EU ] has made a very strong statement around decarbonization and Europe's competitiveness coming together. And I think that's important. It's not -- there's sometimes this debate that has to be one or the other. There are other parts of the world, for example, in some parts of Asia; it's not a debate. It's just known that to be competitive in the future and compete in industry, you need to have cleaner solutions. So it's very encouraging to see that from Europe, and there's going to be some more support for clean manufacturing and support for public procurement to buy lower-carbon products. That's going to be important in the future. I think for the U.S., yes, a ton of incentives have been put in through the IRA a couple of years ago, 45Q, the $85 tax incentive for every ton of CO2 captured. Those are job creators for the U.S. And we have to also remember, the IRA in the U.S. was industrial policy to create jobs, to create competitiveness for the future. So I think anything in North America, this goes for Canada as well, that is going to help industry, help them become more competitive is going to stay. And what we've seen in the -- at least the CCS world, both sides of the political spectrum are gaining from it. So we have not changed any direction from Capsol's perspective on our moves. We opened up a U.S. office last year. We're going there next week actually for the CERAWeek conference. Capsol has been recognized as one of 6 energy innovation pioneers in this big conference, and we continue to see some very interesting momentum

And I also remember from some of your previous presentations that you talked about the CapsolGT, Capsol gas turbine solution and also it's -- the studies that you have done in the U.S. for the CapsolGT solution. Where does that stand today? And what do you think about the CapsolGT investments going forward?

Yes. So gas turbines and energy is a big topic right now with the increasing energy demand. I mean that's one thing that is constant despite what the politics are today. Energy demand is growing. And it's not all from renewables, it's from every single energy source, including gas. And a lot of this growth for energy is coming from the data center -- AI-driven data center companies. And it's those companies, we are seeing a higher willingness to pay for clean power. So we're optimistic about it. There is quite an order book for gas turbines that has to -- that has filled up. And we're continuing to evaluate. We're working with a couple of the leading gas turbine providers on solutions for clean power. And it's also coming from -- directly from emitters as well. So we'll -- we continue to push and look at that space. The U.S. work is also linking into international work as well. So that's what's also interesting.

Yes. Flexible, again, is one of the buzzwords of 2025 within the electricity generation companies, the IPPs. So flexible and electricity generation will be key, going forward. Yes, reliable and flexible, both to support the variable renewable energy, but also to support like a baseload for both data centers and AI. But if we are looking more ahead like into 2030, I know one of your targets is to be in the pole position, be a market leader in the space within 2030. What will that take from your organization in terms of both the sales organization, but also your engineering capacity, where are you today? And where will you need to be in 2030 from an organization point of view, organization upsizing in order to be a leader in the CCS industry in 2030?

Yes. So we made a big step already in 2024 in raising the awareness of Capsol's technology. We think it's the most mature alternative to amines. And with the business model today, we are -- it's very much about the demonstration units and the engineering. And what we are doing is we're making every hire and every expansion in a careful way so that we can adjust in pace with the market. What's really important now and as we move forward is these partners that we are working with. So we will extend our capacity with some of these partners in the sort of the non-super core work. So the process model and all of our learnings will stay core, and we will expand that carefully. But we're -- like I said, we see some very interesting opportunities in the market, and we will be evaluating growth opportunities. How can we accelerate even more? And that might take a slightly different way of looking at our current business model. It might be these future services and may be working with partners in a slightly different way. Those are also being evaluated as well.

And also, Ingar, from a CFO point of view, upscaling the organization, what is the next steps for -- I know that the run rate cost base is about NOK 75 million per year. And how will this look like in 1 or 2 years, do you believe?

I think as Wendy touched upon, we have actually grown our organization quite a bit over the last 12, 18 months. And we are now at the scale where we can execute the business model at scale actually because the nice thing with this technology licensing, it is very scalable. And for every project we deliver, we will be able to deliver the next project more efficiently. And a few years out, there will always be adaptions, but being able to deliver these process design packages, which is the sort of ultimate handbook that we hand to the client. With the organization we have today, with the very flexible system of sub-suppliers we have, we should be able to do quite a lot. So there's no need with the current business model to grow the organization 10x or 3x or whatever. We are pretty much set today. But there are a lot of interesting opportunities out there. So...

I also think we'll be more efficient in some of the future project wins because we're working with bigger customers on larger portfolios. We will be getting our technology out on projects like for the Stockholm Exergi, which will hit its FID soon. So those will also accelerate and shorten some of the decision-making processes. We've spent a lot of time the last couple of years really just helping the market understand what we can do. And we're using all commercially proven elements. So that's also an advantage.

Stockholm Exergi FID will be kind of a very nice marketing and sales activity for you just the snowball starting to roll with that one. It will be kind of -- not free marketing, but...

It's validation.

Absolutely, validation. We need to take some of the questions from the web. And so we have covered this one with the R&D centers. And yes, this is maybe a question to Ingar. If you could quantify how this will impact the cost base going forward?

We are not ready to -- well, look, the cost base is not a great impact. I may be -- more interesting is quantifying the revenue side, but we are not quite ready to do that yet. The lab today is 2 people, with sufficient space to bring in more. We are working with the university over there to also use their facility and their people. So we're doing this in a very cost-efficient way as we always are. So it's in the run rate that you sort of already alluded to.

We took advantage of a lot of open capacity in the Stavanger area. And you may ask why is it in Oslo? It's also because there were some very well-priced facilities ready to go that we took advantage of. And we were always doing this lab work, but now in the proper facility.

And I see also on the web that there's some more questions about the costs, and they have looked at your Q4 presentation where you showed this cash bridge, this 12 months going forward cash bridge that ends up at NOK 34 million at Q4 2025. And they're asking whether you think this is a comfortable cash position and how to think about that?

It depends a little bit on where you are when you have that cash position. It's important to stress, and I think also saying in the question, this is today contracted revenue, right? All of the engineering revenue and also some of the CapsolGo revenue we see coming in is typically done on a fairly short cycle. So there will be more of this type of revenue throughout the year. What we do see, as we talked about, we are getting closer to more viable FIDs in the pipeline. As we get closer, we also deliver larger packages to these, right? So a feasibility study, lower part of the range when we get to the pre-FEED, FEED studies, we are seeing more revenue also being generated as we get closer to the FIDs. So we expect by the end of the year to be sort of on an upwards trend here. So if that's where we are and that's where we plan and hope to be, it's comfortable.

And also from kind of a capital markets point of view, with this very modest cost base if one should raise capital, it would not be a very significant part of the market cap, right? So from a capital markets point of view, I believe that having a NOK 35 million cash position in Q4 2025, whether or not you're in that momentum, I think that will be sorted out. But that's just from my capital markets perspective. If you just move upwards in the chat, see if there are some questions that we have not covered. No more questions. Okay. Thank you so much for joining us for almost an hour. And thank you so much to CEO, Wendy Lam and CFO, Ingar Bergh for your time and also for educating us further on this case. There's one last question. How large a proportion will a solvent represent in the total CO2 quantity for storage?

If I understand the question correctly, it's that the solvent will leave together with the CO2, that is not the case. The solvent is stripped out. So what comes out of our process is pure CO2, the solvent is circular in the process.

Solvent is recycled, and every solvent will have some degradation. So as it gets used over and over, we'll have to replace some. We have also shown that our solvent has lower degradation properties than some amine solvents and the ptassium carbonate is something you can buy on the open market. So that's not something that we necessarily try to make money off of. And if customers like that, they can purchase it. So it's not really an issue for our customers at all.

And just me looking at other types of carbon-capture technologies, it's not common for the solvents to go along with the CO2. It's common that it's circulating.

That's right. That's right. Thanks for that question.

Thank you much, and have a nice day.

Thank you, everybody.