Fjord Defence Group ASA (DFENS) Earnings Call Transcript & Summary

[indiscernible] welcome everybody, for this carbon transition mini Capital Markets Day. Thank you for taking the time to participate. My name is Nils Haugestad, I'm Interim CEO and CFO of the company. And before we dive into this, I'd like to thank also SpareBank 1 Markets for helping us arrange all this. The impetus for kind of putting this together was, of course, the massive volatility we've seen in all these markets, stock markets all over the world and very high volatilities there. Commodity prices, not to mention, we've seen, of course, oil prices and gas prices here, but this is way broader than that, just look at coal prices and most of the other commodities. So substantial changes in how things look. And then, of course, on the renewable stocks, some big drops in that. And so the thinking was, what does this all mean? How do we think about take stock a bit of where we are and how we think about next steps in all of this. So that was the impetus for today. So in terms of the agenda, you've seen all this, we'll do kind of a brief interim, go through a little bit of where we are as a company and also some of our thoughts. And then we'll have a discussion on the carbon capture market. And then CO2 Capsol, will go through a bit of the developments on their side, lots of exciting things happening there. And then Britishvolt will talk a bit about the electric battery market -- vehicle battery market in particular. And then we'll have some time for Q&A and also discussions. So here, we're going to have SpareBank 1 go through a bit of their views of these sectors. So briefly on us, we have 2 segments of the business. We have a legacy business, which is a highly profitable oil and gas-related seismic assets that are targeting kind of existing infrastructure. And the focus here, of course, is on maximizing output from producing fields, which we think is really one of the key plays when it comes to that side of the business. The second side is the energy transition investments. And here, we've been using and redeploying capital from the legacy businesses into investing in companies that reduce the carbon footprint. A couple of observations maybe around this. One is, this is a market very much in motion, and there are a lot of changes happening there. So we will increasingly have a very high threshold for what we invest in and take a very cautious approach to that. And if we think that out of valuation purposes or in terms of what's available in the market that's not particularly attractive, we will look at either paying dividends or doing share repurchases in the meantime. So on the legacy business, we have 2 pieces there, too. We have a multi-client library that's really sale of data licenses, again for managing oilfields or making drilling decisions. They're both near-field surveys backed by AkerBP, Equinor or Neptune Energy. There are also service that are covering some very important producing fields. And they are co-owned on both sides on the Egypt survey, we'll come back to this. It's called Schlumberger. And on the Norwegian side with TGS. In addition to that, we sold the seismic node businesses to Magseis earlier this year in Q1. And as a result, we still have an economic interest. We'll come back to that. We have an earn-out agreement with them. So that's the other asset in that business. On investment strategy, just briefly, we're looking again at companies that really have the ability to reduce carbon emissions in a real way. We think there are a number of significant trends happening in that market, and we think there are going to be some very long-term winners. We do have an opportunistic approach in how we look at this, but there are some commonalities. We are trying to target particular companies that have unique or proven technologies, that are scalable, high barriers to entry and a global or a significant geographic scope potential. In terms of the phase in life cycle, we're not looking at seed or venture phase, but we're looking at growth capital in the kind of pre-IPO type of stage and companies aren't looking to IPO in the short or medium term. So if we look at the balance sheet, this is as of Q1, you'll see that the multi-client library is by far the largest asset in the portfolio of about $34 million. There are 2 surveys in that portfolio. It's a survey, which is on the books at $23 million. And in the Gulf of Suez service, which on the books for $10.6 million. A couple of observations about that as well because we've gone through a pretty significant downturn in the oil and gas market before we see this rise now, and that is we did a series of substantial write-downs of that you'd see in our library, $53 million. And in Q1, we saw the first -- actually a reversal of some of this $5.6 million of a write-up, which has been -- what takes us to the $23.4 million. On the seismic node operation, if you look at financial assets. So that's the business we sold to Magseis in Q1. It's a net present value of an earn-out. So the earn-out in essence, is a 3-year earn-out, has a cap of $12 million and then a floor of $1.5 million subject to certain milestones in that. And so at the moment, it's kept on the books at $3 million, and we'll keep on reevaluating that. And then we have the energy investments, you'll see at $17 million on the left. All the financial indebtedness have been repaid. We had an equity ratio of 88%. And as of Q1, the net asset value per share was NOK 1.86. So looking a bit at the oil and gas industry and kind of what's driving, in particular is, of course, relevant to the multi-client surveys that we have -- what we see is starting at about 2014, this chart goes to 2016, but even the 2 years before that, we have a sector that is significantly underinvested, we have reserve replacement ratios that are very, very low on historical levels and have been now over the last 8 plus years. So if you look at the green bars, that's the liquids reserve replacement ratio, we kind of 10% to 20%. And on the gas side, the red bars, you have maybe 20% to 30% with 2 years where you're kind of in the 50% range. But this has really been going on for 8 years. And when you look at 2021, then bottom of COVID, you both have liquids and gas at about 10% reserve replacement. So this is a sector that has steadily been underinvesting in its assets. If you do the same when you look at this on a global basis, right? So if you look at the same thing on the capital expenditure side, you see here, kind of, again, back in 2014, you have the shale oil really coming on, oil prices dropping precipitously. And that's causing, again, this downward slide here you see on the capital expenditure side. It starts slowly to recover around 2018, 2019, but we roll right into COVID and have even broader declines after that. And so of course, the key part of this and in particular when it comes to CapEx that relates to the general plans of the company is not necessarily tremendous expansion, but just general existing plans of development of fields has just been substantially underinvested in. And you see the increase on the right-hand side where you start seeing now oil companies starting to do the things that they were intending to do earlier. So this is a big catch-up spending coming online here. And the last point that I think is important to get here, which is new to probably all of us is suddenly energy security is an issue. That, I think, is something we hadn't thought about since the 40s, the idea that you might have conflict that may change your access to energy is also a whole new ball game, and is causing a lot of people to focus, look now at Germany, again, for instance, when it comes to use of coal for electricity and there's a substantial problem for these guys. So this is changing the dynamic a lot in that market. So what does this all mean for us when it comes to the multi-client side. Well, again, we think where the oil companies are going to focus here is on maximizing output from the existing infrastructure and both of our service are near-field service in an existing infrastructure, that is where you are trying to optimize. So on the left, you have the Utsira survey we talked about. It's a large survey here in Norway, 2,000 square kilometers. And as you'll see in terms of fields in the area it is you have some well-known names there, Edvard Grieg, Ivar Aasen, Balder, Sverdrup. These are big well-known names and all covered in the general vicinity of the area. The other thing is, of course, that this was a survey with extremely high sample density, which means that the ability to get a very different look at the geology compared to the kind of data that was there before is a key item. So we believe this is going to be used very actively over a long period of time. In Egypt, it's slightly different. It's also near-field, but Egypt has had a problem for years and years here, they started producing probably in the 80s, sometime, but the geology, in particular, the salt bodies, has caused problems in Egypt ability to get a clear vision of what the subsurface looks like. So this survey that was done in 2020, led by Schlumberger and then Neptune Energy, covers about 300 square kilometers, but this was a survey both with nodes and with short 3D streamers to get near-surface imaging. And we just finished the analysis in essence of the data. So this is now all processed and are now out talking to customers actively about. There are a number of drilling campaigns happening in the area. So this is also an interesting fact, and of course, most recently, we've seen some new finds there. So in the first quarter of this year, Dragon Oil found a 100 million-barrel oil equivalent well in just the Northeast part of where we have our survey. And ENI in 2019 also did find a200 million-barrel of oil equivalents. If you look at the larger energy space and say, what's going on here going forward? What's happening? So I think this is the first maybe illustration of what's changing in the world. This goes back to 1990, you see kind of worldwide energy -- oil electricity demand, about 10,000 terawatt hours, growing to about 23,500 terawatt hours in 2020. We saw a small dip there because of COVID. So the first part of this is when you roll into 2021, you see slightly coming out of the COVID era. We have a big growth again, up 6% globally to 25,000 terawatt hours. China is 50% of that growth alone. So some significant electricity demands coming here. But the second observation, which is important for those who looked at these net-zero plants is the requirement of the demand to kind of reach the target we're talking about is to take this to 50,000 terawatt hours. So we're doubling the demand into the system we have today and that needs to be resolved somehow. And this is, of course, a substantial challenge. Is even more substantial when you start looking at the dynamics around the current balance of this because 2/3 of global electricity comes from fossil fuels. And if you look at energy as a larger part on the worldwide basis, 84%. So we need not only to substantially increase the electricity availability, but also change the fuel mix to be able to do that. We talked a bit about the coal fire that's happening in Germany now. It's just not a German issue at all, of course. It's an all-time peak in 2021, up 9% in terms of coal-fired electricity. CO2 emission is still up. And if you look at the last quote from the IAE in January, you'll see the problem, we had some very big targets, and we were not pushing hard enough. So a lot to be done. If you're looking more broader than that and you look at fossil energy. We talked about 25,000 terawatt hours on electricity. But if you look at broader and global fossil fuel here, it's about 130,000 of terawatt hour equivalent. So that's about 5x. So again, if you're looking at what you're trying to address, the size of this market is massive. And in particular here, if you look at what's happened to coal, coal is about 1/3 or so of this. And we used to be kind of large consumers in Europe and North America, and you're looking at reducing that, which we kind of have. But at this point, China is about 50% of this coal consumption. And if you look at Asia as a total, it's about 75%, and that market is still growing. So this is a very big issue here that needs to be addressed. So what's the plan? Because it's pretty drastic for those who haven't kind of looked at all the dynamics of it. So firstly, we talked about the amount of fossil fuels into electricity. So if you look at the low-carbon side into current electricity demand, about 1/3 of it is low-carbon sources. 10% is nuclear, 15% hydro and wind and solar is only about 10%. So again, if you're looking to go to 25,000 or 50,000 terawatt hours from 25% and 10% is wind, then what's the plan? Well, if you look at the chart on the left, the light blue bar and the light brown bar is wind and solar. So in essence, the growth there to get to 50,000 terawatt hours is to take wind and solar to 24,000, 25,000 terawatt hours, which is, in essence, the same as all global electricity consumption today. This is a massive job. What we're talking about being done so far is a very small portion compared to what the task is. And this is the requirement to reach net-zero in 2050. The second thing you'll notice is on the brown line on the left here, about 10,000 terawatt hours. Now that's coal -- now I think everyone recognize you're not going to be able to take this out in particular out of the Asia markets, but you can reduce it substantially. So the plan is to go from 10,000 terawatt hours, which is about 40% or so, right, 40%, 45% of total electricity generation, down to about 3,000 terawatt hours. The next line is that kind of purply looking line, which is natural gas. So you've seen that come up a bit here, but it's reasonably stable. So there is an understanding we're not going to be able to take natural gas out of the equation really. We're not trying to grow it. It's really looking to stay about constant, but it's not going down significantly. Then the blue line below is hydropower. So that's going up from about, say, 4,000 now to, say, about 7,000. And then nuclear that everybody thought was dead. Of course, that's not so, about 3,000 now, going up to about 5,000. A lot of that increase is going to happen in China. So the 2 big takeaways is: one, solar and wind are the drivers of creating the energy, but you're also reducing the amount of supply significantly primarily, because you're taking coal out and how are you going to replace that? Well, it's hydro, it's nuclear, and then the light green on the bottom there is other renewables. But this is a massive shift in what we're looking at, just to put this all in perspective. So what have we done? Well, 2015 to 2020, all the way on the left, that's, in essence, the average annual renewable capacity installation. The main case that the IAE is working with right now is about 300 gigawatts of new installation per year. Their accelerated case has gone to about 400 gigawatts. But the bar on the right is the target. So yes, we made a difference. And yes, we're doing more, but it's, in essence, twice the main case we're looking at currently in terms of new installations. So whatever we've seen so far is at best the beginning to try to reach the targets that we're talking about. Then replacing oil. It's not so easy. When we talk about gas, gas is in many ways it's going to stay constant. But on the oil side, what you do well, firstly, you see on the right-hand side, about 50% of this is in essence, road, right? So gas and equivalents. But you also have a big percentage going into petrochemicals and plastics and other industries. And then, of course, you have agriculture, residential in here. So it's not so easy to replace all of this. But what you do replace, what do you replace it with? So that's, of course, electricity. Why you're going from 25,000 terawatt hours to 50,000 terawatt hours, well, you're taking away these things. So you need to be more energy efficient, but you also need to do the replacement. Well, if you're going to replace that, then you need to start thinking about some other things, too. You have the wind and solar to create the energy, but it causes some new problems. I mean what do you do when it's not blowing so much, right? So it raises the question about energy storage. How are you going to deal with that? And then what about energy transmission and distribution. The power grids we have aren't scaled properly or certainly not optimized for this. So there are some new technologies that need to come in place here to allow this all to happen. The other thing is by not taking coal all the way down, of course, and leaving natural gas, and then also leaving some of these other items in here, means that taking down fossil fuel isn't the only part of the equation, but that comes to why we're talking about CO2 capture here later today, where, of course, that is a major part of the IAE plan of how you're going to get there. And I'm sure the CO2 guys here are going to talk about it, but -- if you go back and look at what's being done, which, as I recall, is some 40 million tonnes a year is kind of current numbers. The 2050 number target is about 5 billion tonnes and the 2070 target is about 10 billion tonnes. So the volumes we're dealing with here are massive, and we haven't even started that exercise. So renewables, how are they done? Well, this is part of the challenge a little bit. If you look at the overall market, certainly, this was updated up until the 17th of June. So this is actually a pretty recent. But renewables, whether you look at the global index, you look at this index of kind of Norwegian companies, they're down, say, about 35% or so from January of 2021. And -- but I'm not sure that's really the right question altogether. A couple of other observations. So if you look at these indices going back in time as well, you had this massive write-up of course, from January of 2020 to January of 2021, about 300% of an increase here. So I think the first question is, was the peak, right, in the first place, right? This is something that was partial of the reason why we're seeing this big drop down because we actually overvalued the assets at the peak. The second question, of course, is have we reached the bottom and that's a difficult question. And if we look at this, if we're trying to equate this as people have been kind of looking at before to the dot-com era, which is not all that dissimilar in many ways. What we saw is we saw a big decline there too in a number of companies. Now some of the companies had big declines and did really well. I mean, think of Amazon, certainly good strategy, a strong company, well positioned and really did extremely well thereafter. Then we had some companies that had weaker strategies and more poorly positioned and they disappeared. So I think the question is, is this the right level where it is now? And then I think it becomes a question of bifurcation, which are the strong companies that actually will do well out from this and which are the companies that may not have the strategies that allows you to develop from here on out. So what's the story as we see it? I think the thesis around energy transition is going to happen. I think that is more relevant than ever, and that's not changing anytime soon. We are behind. And there are some very substantial steps that are being taken. There is a very broad support internationally from governments throughout the world that's driving this. And I think there is no question that this is going to happen. The only question is, are we going to reach the 2050 goals or not? That's a question, and it's unclear exactly where that is. But the efforts that are going in now are extremely large. To put the investment amounts in perspective, this is IEA's numbers you see in here, this is from 2030 onwards. Their target is, you need to spend about $4 trillion a year from 2030 onwards to be able to reach these kind of goals. So there is a very big political sentiment towards this has to be done. There's an extreme amount of capital that's being put at it. So no doubt there are going to be failures in this. And I think the critical thing is just like in the dot-com here, you have to find the right strategies and the right companies that can be the people that capture the value in this. But I think as you see on the bottom, Larry Fink's statement, there was somewhere from a quote earlier this year, "I think that the world economy's decarbonization will present the biggest investment opportunity of our generation." I mean, that's a pretty big statement. But I think it is the recognition of the scale of the issue, the amount of money that's going into all this and what's already happening that people aren't necessarily seeing yet. So with that, we thought it made sense to have some companies tell us what they're really seeing. We're seeing it from a far. We have the -- we're fortunate to have with us both Britishvolt and CO2 Capsol here today to talk a bit about this. And firstly, we have Wayne Thomson, who has agreed to join us from Canada, so very early hours over there. Are you with us Wayne?

I am, Nils.

Excellent. Thank you. I hope that -- wow, [ I knew your old dress too ] -- is impressive.

Well, I just got...

Well, that's what we learned in this whole TV world, right? Very impressive. Well, I'll turn it back over to you, and Wayne is going to talk a bit about the CO2 capture market dynamics. And he, of course, was also behind Svante and all this we've seen the story before in Canada, now on the board of CO2 Capsol. So though it would be interesting to have somebody that knows what's going on to talk about that segment. I'll turn it over to you, Wayne.

Thanks, Nils, and good morning, and thanks for the opportunity to speak with you this morning, even if I had to get up at 2 in the morning to actually do this. Just the slide on. It was moving last time. Thank you. You could just manually move the slide then I don't seem to be -- my computer has gone to sleep on, I guess, since we were doing this before. There we go -- so waking up now. I guess it didn't like getting up at 2 in the morning either. Talk a bit about the market. And I'm not going to spend a lot of time on the market side. I think there's been a lot of progress in CO2 markets, and you're familiar with, of course, the European one and some of the work that's been done in North America. But I don't really believe that it can develop fully until we can show that we have a reliable low-cost carbon capture solution. The carbon capture projects to date have been, I would say, unreliable and costly. For example, one of the largest Petra Nova near Houston, Texas, is now shut down. Another major capture facility close to me, Boundary Lake Dam in Saskatchewan is operating, but at lower throughput and higher cost than had originally been forecast. So I've become convinced over the last couple of years, there's a huge market opportunity for the right technology. And that technology has to be operationally reliable, it has to be safe and it has to be low-cost. It's clear the hydrocarbon business is looking for and needs this technology and been supporting technology development to solve their [Audio Gap] CO2 emissions and [Audio Gap] carbon capture [Audio Gap] 2050 goals. There's a hodgepodge of [Audio Gap] world ever -- ready to put in [Audio Gap] when we again [Audio Gap] carbon capture solution. So I believe this -- the incentives will be adequate to implement CCUS, whether that be trading credits or tax incentives. I'd say governments don't want to shut down industry. They can't afford to do that. And they're reluctant to put too much pressure until, again, we can show them that viable solution. So we show them a solution [Audio Gap] if the incentives are going to be [Audio Gap] designed to basically [Audio Gap] that technology. I was asked to talk a little bit about the Svante experience. I spent some 6 years at Svante as Chair, [Audio Gap] the company for a year [Audio Gap] permanent CEO. And not surprisingly, in the early days, it was pretty challenging to stay alive. My early experience with Svante was -- lots of companies wanted to talk about carbon capture but nobody wanted to invest real dollars. And of course, the government programs were very much less developed 5 to 7 years ago. Now of course, that's all changed with companies are actually willing and are putting money into developing and supporting carbon capture, and then understandably, investors have piled into this space, too. The technology development at Svante was quite different than what we're dealing with at CO2 Capsol. When I first joined Svante, the Svante technology wasn't close to meeting the required operational and cost targets. And we were developing new technology. We weren't able to leverage off an existing proven process like we're doing at CO2 Capsol. One of the examples of what we -- how we had to start from kind of scratch at Svante was that we were able to literature search some 200 CO2 absorbents around the world. One of the advantages of our new much more connected world is we were able to get data on all these absorbents. We were able to look at the ones that were most promising and actually [Audio Gap] lab in Vancouver, and then customize and to optimize them and absorbent to match the Svante collection system. But that's the level of as just 1 example of the kind of development had to happen for this technology. Also, partnerships were critical. Putting in place the right partners, we found some -- the right technology partners, and we found a partner to host and to partially pay for a sizable demonstration. And then when the investment community improved, we found the kind of funding partners to support the company, such as OGCI, Oil and Gas Climate Initiative; and Temasek, the Singaporean sovereign wealth fund. And of course, we then put together the right team hired [Audio Gap] and put together an excellent team around him. I was asked why did I join CO2 Capsol? And maybe I'll start actually with the personal life. I've been on a number of boards and have kind of over the years, developed a criteria of things that I need to have in place. And one is, I have to trust the team. I did quite a lot of due diligence with CO2 Capsol meeting people [Audio Gap] earlier on in the COVID crisis, but got the chance to meet everybody in management and also to spend real time with the technical team. So I need to trust the team. I have to feel I can add value. I like business, and I do this because I enjoy doing it. And so I have to feel I can add something. And I felt like the Svante experience, and even though it's a different path, then we're going to take CO2 Capsol it's still -- I felt there was something to add there. And frankly, I want to join companies that I believe can be successful. I'm sure all of this have been associated with companies that aren't and it's not much fun and being part of a successful team [Audio Gap] It's adding in, and that's what I was looking for. And I want a company that frankly is contributing something that matters in making a difference and CO2 Capsol checked all those boxes. And frankly, it didn't hurt like a lot of these things, one has to check with ones partner and -- my wife and I love this part of the world, 2 of our 3 kids were born in Scandinavia, and we spend a lot of time in this part of the world. So [Audio Gap] at least be willing to -- what I spent quite a bit of time doing was looking at the technology because I believe the market is so available and so large, it really comes down to the technology. You can do everything right, but if you have the wrong technology, then you're going to fail. And I know what's required with my Svante experience in time and money to try to build the technology from scratch and what's involved in all the risks. And I really like the CO2 Capsol process as essentially an improvement on an existing [Audio Gap] that's been used for years and with really limited technology development needed. And our [Audio Gap] safe, low impact, which is critical in so many applications. They also -- the company had done a great job in already putting together some of the partnerships. And of course, we're working on adding to that. But I know how challenging it is to get to that first commercial facility and the CO2 Capsol has taken a huge step with Stockholm Exergi as a partner, ready to proceed on a commercial capture facility. And also, the company has [Audio Gap] support and that [Audio Gap] as we move forward. So -- when I studied the company [Audio Gap] and the technical team [Audio Gap] being inside the company that CO2 Capsol has a very good opportunity to be a leading global carbon capture company and to take a sizable share of the global opportunities, which as I stated before, I think are more than large enough to keep us extremely busy for quite some time. So that's what I had planned. I assume maybe we're taking questions at the end. And -- is that right, Nils?

Sorry, Wayne, yes, you're right. Sorry, there we go. So thank you for first taking the time to be with us this morning, I know it's very early for you, and we appreciate the effort as always. So we're going to go over to the CO2 Capsol specific part of this. And -- and Jan Kielland and Ingar Bergh also joining us here in the room, and they take us through an update of what's the pipeline looking at.

Well, good morning, everyone. Wayne, very early morning for you. This is a CO2 Capsol presentation. And thanks to Carbon Transition for inviting us and organized by SpareBank 1, both companies, we have a good relation to, and we are impressed with what they're doing. This presentation today will focus on pipeline overview. It's something we haven't really been out in the market talking about before this. It's -- we are in an interesting space. But before I start on the presentation, I'd like to add, we put out a news announcement this morning. We have ordered the second test unit, which because there's a huge demand in the market, which is great news. I can say a few words by the end of the presentation. And this is probably what you all know to reach UN's climate goals. Carbon capture must increase by 350 times in only 50 years. This translates to 10.4 billion tons of CO2 that needs to be captured in 2017. And in volume, this is -- the double the size of the global oil production today. So this gives an impression of what needs to be put in place. This will require several trillions of euros in investments. This is an enormous challenge to the industry. And of course, this is also our opportunity. Carbon capture projects are maturing in all parts of the world. CO2 Capsol's HPC, Hot Potassium Carbonate carbon capture technology has been widely accepted and stands out as a highly competitive solution. We know this now because over the past, well, 12 to 18 months, we've seen a number -- increasing interest from plant owners, but more important, we see the large players, the big oil and gas companies, the major technology providers and companies in the world, they call us now; 2, 3 years back, I call them desperately to get their attention. So our marketing efforts or the industry as such has improved quite a lot. So we really feel that we are a serious player in this market. We have now a skilled team of professionals to meet this global demand, and we are well funded to deliver on our core strategy, which is really licensing out. And so we can never be sold out. It's a fantastic place to be in an almost unlimited market. So it's clear to everyone now. CCUS is a critical part to get to net-zero. We see strong support by governments through grants, subsidiaries and tax breaks. Emitters are all seeking solutions driven by ESG pressure and commercial necessity. I have added here a few industries that are very much top of the agenda, waste-to-energy and biomass. This is very important because they burn, in fact, biomaterial, which will lead to -- so-called negative emissions. And this is 1 way effectively for governments and so on to reduce emissions. So important industry, especially in Europe and the Nordic countries. Cement industry is becoming more and more important than other industries like steel and metal process and chemical industries, fossil power are also ramping up. Hydrogen, interesting to look at because they -- well, there's no CO2 emission in hydrogen production, but -- they see the benefit of mixing CO2, pretty simple with hydrogen to produce methanol. So this is something we have received several requests over the past few months in this space. And LNG, gas is important, but LNG buyers, they want to buy so-called green LNG. So producers are now focusing on removing CO2 from the liquefaction process. It's a huge market there. If you look at where we have our current projects, we have a global interest. We are -- have projects in more than 20 countries. New regions; there are no new regions. Everyone is global now. Inbound frequency, 6 months ago, I said we received 2 to 3 per week. Now we receive incoming calls and a request every day. And active leads, as I explained a little bit more about afterwards. We have more than 50 [indiscernible] active leads, which means we're working on these projects, but this is going to increase dramatically going forward. And maybe calculated the footprint of those projects we're looking at is more than 300 million tonnes a year. So it is already significant. And of course, looking at these areas, North America is very important. It's a fast-growing market. Europe, of course, countries in the Nordics, England included and also Germany, Holland, France, and Spain and so on, they're all very focused on carbon capture. But we see other countries like I put on India here, there are coal-fired power plants. They want -- they know this will happen in the future. They have to do something. And we have seen requests from China, Australia. But also, we see very important here, we have a project in South Africa. It's a cement producer. They understand they have to do with the emissions because if not, they will not be able to sell their product on the global market in the future. And the same goes with Turkey here. They have a number of cement plants, and they also looked at this for the perspective of being able to sell cement in the future. They have to prepare for what's coming. And maybe surprisingly to many here, the Middle East, all the big oil producers in the Middle East, they have planned for carbon capture. They have already projects ongoing and they are in a very eager phase to develop more projects. So this is a very interesting market. But how can Capsol handle all of that? Well, today, we can't -- In some of these countries, you need to have local presence, you need to have a long relation. So this is also why we're reaching out to the global technology providers to make alliances. So this is something you will see going forward that we form alliances or on alliance and so on with important and large global players. This is one I find interesting because this is a EUR 1 trillion market opportunity. And here, I put down 2 pie charts, one to the right is the largest projects order, 25, 30 biggest projects or most real projects we're working on today. Basically, most of that what we're doing today is with bioenergy, waste-to-energy and cement. We have other projects in the portfolio, but they're not that short-term. We have refinery projects. We have a number of things, but the most active ones are the 1 shown in the pie chart on the right here. But looking to the left, this is IEA prognosis in 2020, how they look at the market in 2017. So by comparing these 2 pies, there are a number of industries that we are not involved in today. And we need to get involved. So we are actively trying to push some of these projects higher up on our scorecard, to make them rank between the 25 biggest projects, more interesting projects we're currently working on. So going us forward, you will see us getting into new industries as the 1 indicated or shown on the left here. This is what we call the firm opportunities in the project pipeline. They're firm in a sense that these are projects we're currently working on. That there are ongoing discussions with the client. This illustrates and we also put this together to show what really the size of the market. We have -- In this slide, we have taken aggregate millions of tonnes CO2 per year at final investment decision. We don't know when they will take final investment decision in many projects. In Stockholm Exergi, we know they will take a final investment decision in 2023. So in 2023, we have put down the volume in Stockholm, which is 800,000 tonnes a year. And the further out you go, the more guestimates we have done, but these are all real projects where the project owner wants to get into carbon capture. And we are 1 of the technology providers. Some of them were already exclusive. These are the top 27 projects, which we have been included in this graph here. And as said, we are more than double of that, but we have qualified them not that firm as such. This volume in the darker blue, you see this leads up to 12 million tonnes -- and that's equivalent to around 30 plants of the size of Brevik and [ Temasek ]. So it's a significant volume. So all of these are working actively to grow as such and develop the projects. I said this is about half the number of projects we have in our, let's say, called the pipeline of opportunities. We also have in very light blue here -- this we made because we see all these incoming calls now. And in fact, what we're doing, this graph is getting steeper and steeper by every day. It's already outdated. We made it 2 days ago. And now I'd like to give word to Ingar Bergh, he's our CFO. And this is also something we like to put some numbers behind what we're doing. So you can get a feel for where this can take us. And -- and I'd like to add before Ingar starts, this is not like a new guiding for our company. We gave our guiding at the annual report, and we'll do next guiding at the right time, but this is to give you a feel for the potential of the company and what we can achieve based on where we are today. Ingar.

So based on popular demand, I am going to run through a few numbers for you. so that you're able to do the math on CO2 Capsol. And I've done this in a simplified way, but I think I hope you'll bear with me on that. Revenue-wise, we have earlier used a percentage relative to CapEx on projects. What we have worked on over the last few months is to convert that into a model where we basically say we earn x number of euros per installed ton of capacity. We are also looking at, as we have communicated before, reoccurring revenues. Our business model will be a mix of upfront fees and reoccurring revenues. Today, I will focus on the upfront fee as a single revenue from project to keep this walk through a bit simple. So revenues, we are looking at about EUR 7 to EUR 12 per ton of installed capacity. This means for a 1 million tonne plant, we're looking at about 7 million to 8 million tonnes -- sorry, EUR 7 million to EUR 8 million per 1 million tonne plant or look at it another way, per 1 million tonne of installed capacity. With our licensing business model, this is a very scalable model, and we should be able to do a significant part of the global market as it progresses here. Margins -- a licensing model is a very good model from the margin perspective. A lot of the capital investments have been done. There aren't any more CapEx in the pipeline for our core model. We are looking at EBITDA margins about 40% to 60% plus. This is on the corporate level and will be driven by how efficient we are able to use our organization basically. The more projects we can get in, the higher margins we get because we deliver more efficiently. Well, in the start will be in the lower range and will move up in this range. So with the very balance sheet-light model, no CapEx, EBITDA margins are more or less equal to pretax earnings in this model. So again, bring it down to a 1 million tonne plant installed capacity, will have a pretax earnings of between EUR 3 million and EUR 7 million for such a plant. So how does this translate into market potential? Again, as Jan said, this is not guiding. This is example calculation to give some assistance for how the licensing model can capture value in the market. By 2050, according to EIA, we're going to need to capture almost 6,000 million tonnes of CO2 per annum, that's 6 billion tonnes of CO2 per annum. This at our midrange with a potential revenue of EUR 10 million per million tons of installed capacity, means that the licensing market, not the complete market, not the CapEx, but licensing market over the next 28 years is about EUR 60 billion. Translate this to per year. we're talking about 250 million tonnes of capacity to be added on average over the next 28 years. Again, looking at Brevik, which we know good well here in Norway, they have about 400,000 tonnes of capacity. So we have to do 1 Brevik every day from today until 2050, which is mind-boggling. But yes, again, each year, this translates into a licensing revenue of about EUR 2 billion. If one were to capture about 5% of this market, which is feasible with a good technology and a good organization and good partnerships, this would translate into an annual average revenue of EUR 110 million about. Again, if you put our mid-range EBITDA to this, it would translate into an annual pretax earnings of about EUR 55 million over the next 28 years. This was the potential revenue from our licensing model. We are, of course, working on other revenue streams. We have our CapsolGo units. We have the potential to do chemistry around this. We have the potential to develop a lot of services around an excellent technology platform. So there's considerable upside here in addition to the licensing model. That's me. Thank you.

Thank you Ingar. What's up in here. Yes. So our current activities. Well, we continue to work with our clients on waste to energy, biomass and cement plants. Biomass and waste to energy is becoming very popular in the Nordics and the U.K. So these are almost an endless number of potential projects there. But as we've seen on the previous slide, well, there are many places around the world. We don't have a traction. And the other industries where we're not very active today. So what we're doing, we're reaching out. We will get a global player to get work alongside ourselves, and we will look into industries like petroleum refining and petrochemicals, oil and gas production, processing and transport and power plants. We continue to build a fit-for-purpose organization. I'd like to add here, we have also made changes to the Board and thanks to Wayne that onboarded the company in the first quarter. He brings that capacity and knowledge that we need to have inside our company. So we're very happy with the veteran with the Board and also how we have developed really competent competition -- organization and where we are today. So -- and were guiding our scope going forward. We see there's a lot of potential to improve on what we call solvents, the chemicals that are actually removing the CO2. We see other ways we can make a better offering to our clients, well, all with the objective of increasing our earnings. And building strong alliances is, well, important for the global industry because we have to work together. We are focusing on the carbon capture part of it. But you need to liquefaction interim storage, transport and permanent storage or use of the CO2, which is also an interesting market. The industry needs to work together to make this happen. If not, we're going to fail. But for us as a company, we do this because we want to expand business, we want to sell more licenses, we want to reach out to the whole -- every corner of the world. So this is our -- why we are so focused on having the right companies working alongside ourselves. And -- before I take the final slide, I also make a comment on the press release this morning related to Capsol gold. This is the second unit via order. The first one will start producing in September and give revenue to the company. The second unit will be delivered by the end of the year, start giving revenue to the company. Well, it's interesting from the revenue side, but more interesting is really what are we actually doing? Well, we offer that to clients because clients they don't know about this industry. They don't know how to deal with the project. When they have a test unit on site, they will get familiar with carbon capture, they will immediately increase the ESG profile. And that shortened the time from start thinking about carbon capture until actually having a capture plant. So there's twofold why we have this offering to the market, is a little bit more described in the release this morning and also on our website. So for us, the future of CO2 Capsol is very promising. However, the company's growth depends on converting a booming market. You've seen that in the slides into contracts and cash flow. This is how we're going to be measured going forward. And this is really the upside of the company. We still have to deliver on this. We have to convert that profile into contracts and cash flow. And for me and the team, well, we're working 24/7 on this. Thank you very much.

Thank you so much, Jan and Ingar. So we're, of course, very excited about this company. We think that it's very well positioned. I think people haven't really recognized what needs to happen in this market space and the opportunities there. It takes some time to kind of get all the pieces together, but this is definitely happening real time. So next coming up is Britishvolt, and we're fortunate to have with us, Isobel Sheldon first online. She wanted to come, but couldn't be here in person. So she's calling in from the U.K. She's Isobel, we see we got you online here. So she is the Chief Strategy Officer. And we also have Morten Skjønberg in the room here somewhere. And there we go Morten. We worked very closely with Morten through this last several months. It's a company that's really knocked the cover off the ball in my mind and done extremely well in a short period of time to position a company that clearly is going to be very sizable in this market. So we know we have some players in Norway, Sweden, of course, also in this space. But we thought it made a lot of sense to kind of get a sense from Isobel about the market in general, also Britishvolt that we're very excited about. So Isobel, I'll turn it over to you.

Okay. Thank you very much, Nils, for asking me to come and speak to everybody today. And I really do apologize for not being there in person. It was a logistical nightmare to try and get out to Norway today. But hopefully, I can do this remotely. And luckily, I don't have to get up like Wayne at 2 o'clock in the morning to present to you today. So I'm probably firing on all. So really, just to introduce myself, Isobel Sheldon, I'm the Chief Strategy Officer for Britishvolt. And I was #1 employee in the company and stood alongside our cofounder setting this business up. I've been in the battery industry for electric vehicles for about 20 years now. And even going back to the days when people were saying you're going to do what, this will never be a thing. It will never catch on. And I think we're in a very, very different place as far as the EV industry is concerned today. So really, I can put up lots of statements about fossil fuels and the use of fossil fuels and how we need to transition to a much lower carbon economy. But my own personal journey in this started in 1978, when I was watching my father repair his Mark 3 Cortina. And I asked some questions about how an internal combustion engine works. And I was absolutely mortified as a naive 8-year-old that we were taking in air and mixing it with fuel and combusting it and burning it and creating a lot of gases that we couldn't breathe. And hence, my 44-year journey in decarbonization started all those years ago, way before anybody else is really thinking about it. So I feel very lucky to be on the precipice of this amazing transition in the automotive industry moving forward. So really, our mission as a company is to be the leading technology supplier to the automotive industry for electric vehicles. Then looking at additional and adjacent markets and expanding into those over time. And I'm really going to concentrate on this in this presentation on the 4 fundamental market values of the battery industry because it's very, very easy to think that batteries are a done deal. We've got the technology that we need. And suddenly, electric vehicles are going to start popping up everywhere, but there are some significant problems in the market that need to be addressed. And these are the foundations upon which Britishvolt has been built. But also my observations over the 20 years of being involved in this industry and being one of the first people to get this mind sells into cars and actually get them running down the road, which was very different to where we all started back in early 2000s. So the first slide I really want to concentrate on is this one. And it's really showing the increase in demand for electric vehicles that's really occurred in the last 2 years. So the top graph on the left-hand side there is the view of the increasing demand over time of battery electric vehicles into the marketplace and into consumers' hands. And you can see that there's a steady, but significant growth in the volumes of electric vehicles that will start to hit the markets and really get to that 50% battery electric vehicle penetration mark somewhere in the early 2013s. But then if you fast forward to June 2021, that's about 9 months later, you can see that graph looks very, very different. The increase in demand is coming much earlier and it's much, much steeper than anybody anticipated. And what has happened is. That the automotive industries really recognized the increase in demand, and they've started to increase the number of vehicles that are available in showrooms and bring their cycle plans forward. Now the graph there is showing about 3 years of pull forward. But if you look at the overall picture for the automotive industry globally, we're seeing that pull forwards being about 5 years. So those, those broader range of vehicles that are available in the market in 2030, which is our original anticipation is now going to happen around the 2025 mark. So a significant increase in the number of electric vehicles that are available to the car buying public. And that's really sort of reflecting the change in consumer sentiment. On the left-hand side, in September 2020 on the right-hand side of the graph on the left chart there, you can see that about 30% of people are considering an electric vehicle as their next vehicle purchase. Fast forward to the same 9 months later. And you can see in June 2021, that's more like 42%, and even that information is now a year out of date and the percentages are getting higher and increasing all the time. So a significant change. And I've been in the automotive industry for 35 years. And I've never seen a transition to a technology-led decarbonization policy like we're seeing today, it's truly absolutely remarkable. Now coming on to those 4 market failures, and these are really, really important. The first one is that capacity market failure. So we've already seen that increase in demand and the increase in the availability of electric vehicles in the showrooms that car buying public is increasing dramatically. And really, those cycle plans have been added [indiscernible] without too much thought about how much capacity there is for battery manufacturing. That's globally not just in geographic terms. So we're seeing an industry size gap. So the gap that's coming in 2025 is actually bigger than the entire leasing in battery manufacturing industry today. So significant capacity crunch that's coming. And all that will do is that will increase the price of the vehicles, you've got a scarce market and you've got an undersupply and increasing demand prices can only go up. And I've often heard in my 20-year career that electric vehicles never be a thing until they achieve price parity with internal combustion engines -- engine vehicles. Now currently, electric vehicle prices are going up, and we've seen Tesla adding multi-thousands of dollars to their Model 3 and their Model S models. But it's not cramming demand at all. So the price parity point is becoming almost mute. We have to have this transition to electrification in the transport arena, and that's for reasons of saving the planet to making sure that we have a more sustainable future for all. So this demand will only increase and get worse moving forward. So Britishvolt has been really wanting to add in capacity in significant quantities to be able to meet that demand profile and scale our business over time to meet the increase in electric vehicle sales in the market. The second market failure is the technology market failure. Now this is really, really interesting. And this is where the done deal on batteries comes in. So over the last 15 years, because electric vehicles never really solved very well. The manufacturing companies making the cells and battery manufacturing is a scale game to get the conversion economics right, has really relied on a small range of cells and sold them to as many automotive OEMs as possible because individually, those manufacturers never sold enough volume to fill up battery facilities. Now if we wind forward to today, I can look at all of the automotive OEMs and in some cases, I can look at individual model ranges and I see more than enough capacity to fill entire production lines and entire battery facilities with technology and sales to supply those markets. So that now is giving us an opportunity to come away from this one-size-fits-all strategy that has been in existence for the last 15 years and starts to do tailored and customized cells to meet specific vehicle application and technology requirements. And this means that we can reduce the compromises of those vehicles. And if we look at especially the European battery automotive manufacturing industry, competitiveness between the markets is much more dominant than it is in places like China. So these markets are going to be looking for differentiation for their vehicles in the marketplace and offering their consumers differentiated products that respect the brand values that they're putting on to the market. Fundamentally, if you drive into -- if you walk into a Mercedes dealership and you buy a Mercedes, you expect it to drive like Mercedes, not like every other electric vehicle on the market. So diversification of application requirements is going to be absolutely critical to the competitiveness of the battery electric vehicle market. Moving from this point forward. And the one-size-fits-all strategy is not going to allow the automotive industry to differentiate themselves, and we have to bear in mind, they've been differentiating themselves on powertrain, internal combustion engines for 100 years. And that's now disappearing out of the window by 2035, even the European Union has now mandated or is about to mandate of the band of internal combustion engine vehicles moving forwards. And those batteries are representing 40% of the value of the car. So if you don't get that bit right and you don't get the differentiation in, what's the difference between a Fiat and a Ferrari. When you open the one, you will start to question why you're spending EUR 0.25 million on 1 product and EUR 25,000 on the other if you've got exactly the same technology inside. The third market failure is the ESG market failure. We're not looking after the manufacturing of the converted materials we need to put into the battery facilities carefully enough. Most of those conversion processes happening in China at the moment, and we all know that China is pretty hefty as far as embedded CO2 is on their energy grid because of the coal-fired power stations. And the coal-fired power station is there because it's easy and it's cheap and you can scale them quickly. But if we really want to have sustainable industry in the automotive industry for electric vehicles, we have to make sure that we look after the embedded carbon content, and we have to look at the efforts in the supply chain and make sure that we're doing the right thing for the planet, but also lifting all boats. So to give you some numbers on that. If I source myself as an automotive OEM in China, my average CO2, embedded CO2 on a gram -- kilograms per kilowatt hour basis is around about 96 kilograms per kilowatt hour. If I take the global average, that's more like [ 66 ]. So you can already see that improvements in how we fuel these facilities with renewable energy is making an impact on the embedded carbon content. But Britishvolt were actually targeting '25 and that means cutting by about 1/4 compared with the Chinese manufacturers and about 1/3 of the global embedded CO2 content within Britishvolt cells. And that's not just about running the facility of renewable energy, which is an absolute table stake if you want to reduce the carbon content of these factories. It's about looking at the supply chain and making sure that we're being disruptive in the supply chain, and we are making sure that our materials and compounds are converted in places outside of China to make sure that we can use renewable energy in those processes, and have tighter regulations as far as environmental concerns are concerned on the conversion processes. This is absolutely critical to make sure that we have products that are going to be fit for the future. But also our products that customers can have confidence in buying that they really are making a difference as far as the emissions are concerned in their daily lives and their activities. Now the fourth market failure is the supply chain market failure. We've all seen commodity prices increasing dramatically over time, especially in the last 2 years, and lithium and nickel, in particular, have gone up incredible amounts as far as the value of those materials is concerned. Now we can't do anything about geology. That's where the minerals are found. It's pretty much locked into places where they're found no matter how much we wish we'll never find significant quantities of nickel in the U.K. or in France. We have to go to the areas of the world where we find those deposits. But the capacity constraint is coming from the mining activities and the conversion processes. So we have to stand up new conversion processes to meet the demand profile moving forward. And as a company, we're working very, very closely with those organizations. And as these are new facilities that need to come online, we don't need to place them in China. We can put them in countries, which are much more friendly to the West and have significantly improved carbon content as far as their energy grids are concerned. So standing up those facilities is going to be critical and working very closely with the supply chain to make sure that we have access to those materials. Now if you go back 2 years, and this is very much a technology-led industry with very little demand. So the battery manufacturing facilities have to source investment from the automotive OEMs to make their businesses viable and sustainable moving forward and locking in that demand. We see that as a significant problem as a company because you will end up with a bare hub with the automotive OEM, I knew you will be really restricted in development activities you can undertake to appeal to the wider market sector. So Britishvolt has had a very much different approach to investment, and we have sought investment from our supply chain partners. It doesn't matter how much or how many purchase orders you have in your hand today. If you don't have the materials to make the product, it's pretty pointless. So having those investment relationships with our supply chain partners means that we can lock in our materials availability and make sure we have access to the raw materials that are going to be necessary for us to be able to produce the products to meet the demand that's coming in front of us. Now I'm going to demonstrate that on this slide. And you can see on the left-hand side, it was very much a technology-led product push. It was not sufficient towards motive OEM demand to make standing up a facility and having the customers knocking on your front door a really viable prospect for any battery company that is looking at standup capacity, especially here in Europe. And of course, in Europe, we are now the #1 electric vehicle market in the world. We overtook China sometime through last year -- through 2021. And if you look at the comparative availability of battery manufacturing facilities in China versus Europe, the #2 market in the world, which is China, has 115 giga factories in Europe, which is the #1 market. We only have 6 operational facilities today. So we have to stand up a European battery manufacturing industry and capability as soon as we possibly can. Alongside that, the demand started to increase. So we very much transitioned from a technology-led product push market into an OEM demand market with insufficient capacity in Europe to be able to satisfy that demand moving forward. So we're looking at very, very different market dynamics even compared to 2 years ago. And for the new companies that are springing up in Europe to stand up that domestic European manufacturing capability, as long as you are ticking all the boxes, there's plenty and sufficient demand out there to make sure our facilities are filled and filled in a very short space of time. And on the right-hand side, you can see some of the significant names in the automotive industry, Elon Musk, Herbert Diess, and [ Robert ] Lawler, who are all saying that if you don't have access to those materials and you don't have the right technology going into the marketplace, it doesn't matter where your investment comes from, you're not going to be selling products to have to be automated OEMs. So really, really important, this shift in demand profile that we've seen over the last couple of years. So looking at the market sectors, as a company, we've deliberately chosen some significant market sectors to go after first, and then go into the volume markets in the longer term. So looking at the bell curve of demand for electric vehicles, you will have the millions of vehicles right in the center of that bell curve. And if we try to stand up the company and get to manufacturing as quickly as possible and produce those volumes, we're certain to fail in doing that. So we need to choose a section of the market to attract and to approach that's going to give us a much more gentle ramp-up rather than making 300,000 vehicles worth of batteries in the first year, look for something a little bit more doable as far as the ramp-up curve is concerned. So high-performance vehicles and light commercial vehicles are where we're going to start the business. Now one may say that that's a niche market sector and there's not enough demand. But if you look at high-performance vehicles, and that's just not the Lotus' and the Aston Martins that we've already secured as customers. It's the performance brands of the high-volume manufacturing industry, especially the German manufacturers, where anything above 300 to 350-horsepower will represent something like 189 gigawatt hours' worth of demand by the end of this decade. So that is actually bigger than the entire EV battery electric vehicle market is in Europe today. So some significant opportunities on the fringes of that bell curve. And likewise, with light commercial vehicle market, that is a totally underserved market because that market is very much dependent on leveraging passenger car automotive cells that simply don't have the cycle life to make the battery last the life of a commercial vehicle and they'll end up replacing the battery system at year 3 or year 4, which destroys the total cost of ownership for those vehicles. And if you consider that people are earning money and earning their living of these vehicles, the total cost of ownership becomes incredibly important for that particular market sector. But once we've entered into those markets, and we have our products established and we have it optimize, we'll start to trickle down into the volume -- automated sector and start to access those high volumes of vehicles. But then looking at the adjacent markets as well. Marine is critically important. There are decarbonization targets being applied, moving forward to the marine markets and certainly, those import operations and running those electrically is going to be a critical part of reducing carbon emissions from port operations in the longer term. Aerospace is another market that we are looking to move into. And most of those requirements for marine and aerospace are actually allied to the light commercial vehicle markets all the high-performance markets that we are developing and manufacturing products for and we'll be into series production at the end of 2024. Also grid applications is really important to make sure we can time ship renewables, and we can reinforce those grids and to ensure that we have stability of electricity supply moving forwards when the wind doesn't blow and the sun doesn't shine, we need to still the energy, and we need to deliver it out to consumers for them to run their daily lives. Now a little bit on product portfolio. So on the left-hand side, you can see the high energy optimized cylindrical cell, which is the 21700 standard format, and we can tailor and customize what goes inside those cells for different application requirements. So the tailoring customization can take a standard cell format and creates a better technical solution for the automotive OEM. And this is where we're starting because it's a known format, and we can get going really, really quickly on this. Moving forward, much larger cylindrical cells becoming in vogue for the automotive industry moving forward, especially in the premium sector in the high-performance sector, but also trickling down to the volume automotive market. And the 46 46xx cell, and this is a 4690 cell, just to show you that this is a real product, and it's going through product development at the moment, and will be going into a testing program at the end of summer. This is where the future of the automotive industry will end up going. Tesla has very much blaze the trail in these large format cylindrical cells. And there are only one manufacturer actually Panasonic has tested that's actually ready to go to market, and we intend to be the second manufacturing company to start putting these out into the market. This is gaining a lot of traction. We have 23 global automotive OEMs currently discussing at various different stages and looking to sign development contracts with us over the summer and into the end of the year for exactly this format of cell. The one thing that Britishvolt has been able to do is vary the length. So we can offer anything from 80 millimeters up to 105 million meters long, which means that we can do something customized and tailored for individual vehicle platforms to maximize the energy efficiency. And then the Prismatic cells. This is the main stay of the light commercial vehicle market, very nicely shaped, easy to package and easy to connect up with very few interconnecting connections within the battery pack. And really, that's something that we'll be leveraging into the [ space range ] of storage markets over the longer term. So a fairly diverse product portfolio, all based on 1 or 2 chemistry threats with various different adaptations for those cell technologies to meet different market demands. So high energy and high power is one thing that we've worked out how to do both at the same time. Normally, you have to trade one off against the other, doing both at the same time is a significant advantage in the high-performance market, but also into that adjacent market, which is the aerospace market, in particular [indiscernible ] applications. So coming on to ESG, a really, really important pillar for Britishvolt something that we put front and center of the business on day 1 back in 2020, when we formed the company, making sure we protect our environment and making sure that we reduce our carbon content and the environmental impact of our operations is absolutely critical. So as we've already mentioned, making sure that those supply chain partners are set up in countries which have better environmental regulations, but also can have access to renewable energy is absolutely critical to reducing that carbon content. Running our facility of 100% renewable electricity is also another policy that we put in place right at the beginning of our operations to make sure that even during the cell manufacturing process, we're not creating any carbon on site at all. That even makes sense into the construction of the facility, making sure we account for every gram of carbon that goes out into the environment and choosing construction partners that take this section of our business as seriously as we do. Building those responsible partnerships is really important. We've often seen news about the Democratic Republic of Congo and how are the people that are mining that materially in that country have suffered with poor health and safety and child labor over time. As a company, we believe that turning our back on these people and just walking away so they can't feed their families and educate their children is absolutely the wrong thing to do. So we're joining the Fair Cobalt Alliance, and that's working with NGOs on the ground to provide the IT infrastructure, to give us the traceability for the materials, but also with the professionals on the ground to improve the health and safety and stop the child labor going into those mines and creating such a social problem. And by doing so, we can lift all boats. So it's not just about the economic prosperity of Europe, and making sure that our OEM partners and our customers get the right product. It's also looking down in the supply chain and making sure that we have equity in society -- true equity in society and everybody all the way down that supply chain has a benefit from this carbon transition moving forward. So coming on to site location. This is one subject that was a hot topic a number of years ago. Battery manufacturing facilities were expected to be thrown up next to the car plant. So you could make your cells and you could shut them through a hole in the wall and make it go into the manufacturing process of the vehicle. It turns out that's not the most sensible place to put battery manufacturing facility. So you have tight fundamentals are absolutely critical, not only for the decarbonization of the industry, but also to make sure that you have sustainability in manufacturing and good economic conversion rates that you have a competitive product out to the marketplace. So things like access to renewable energy. If you look at a battery manufacturing facility, it's around about 200 megawatts of peak power, 250 megawatts of peak power that you need access to -- so you need to be choosing locations that already have grid access points rather than having to wait 2 or 3 years and spend GBP 75 million to GBP 100 million or euros in getting those grid access points retained. So the availability to get going very quickly and send up manufacturing capacity early on is really important to make sure that we address that capacity market failure that I talked about earlier. Access to energy infrastructure is also important. So as you're building your battery facility, you want to encourage your supply chain partners to come and locate near you to make sure that you've got the shortest possible logistics chains. And you need to have energy infrastructure that goes out into your supplier parts to be able to achieve that. In Britishvolt, we are creating one of the largest private power networks in the whole of Europe on our sites in the Northeast of U.K. will be doing a similar thing in Canada to make sure that not only can we have reliable access to energy, but also our supply chain partners have access to the same green and low-cost energy that we do within our manufacturing facility. Also, access to logistics and supply chain is really, really important. Our particular facility is right next to a deep-water port. It's about a kilometer away. So we can bring all the raw materials that we need into our facility and have very short over land transport to the manufacturing processes that we will co-locate to convert those products into the compounds that we need in the back end of the facility. We also have access to a rep head on site, and we're reinstating that at the moment to make sure that our logistics communications with the rest of the country, but also all the way across Continental Europe are as good as they can be, providing low cost and low CO2 logistics to make sure we get our products into the manufacturing plants in the most sustainable way possible. And in our Canadian facility, we're taking the same approach to the site fundamentals to make sure that we have everything all the boxes ticked and all the right infrastructure in place to make sure that we're successful in this business. So come to the end of my presentation. Thank you very much for taking the time to come and listen to me. We are working with lots of partners right across the industry to make sure that we have the right technical solution with the right ESG and environmental credentials going into the products that consumers want to buy and the global footprint that is expanding all the time. Not only do we have our U.K. operations and our Canadian operations, we have also purchased companies in Germany. We're looking at another acquisition in Northern Europe, where we've also opened our technical center in Japan to make sure we get access to the talent and the capability globally that we need to be successful in the business. Thank you for your time.

Thank you so much, Isobel. We're excited to see the next chapter of the story. You've kind of delivered on everything so far along the way. So we have full confidence, we're going to ask Thomas Næss to come in and give some thoughts in SpareBank 1 in and talk a bit about his views on the renewable space and also any Q&A that we may have here. So Thomas, thank you so much for taking the time and joining us.

Thank you. I guess, good morning has gone to good day during these 2 hours. As you said, I will give a quick brief view on our market view on renewables. And then I will give a comment on the short-term EU ETS outlook as it's relevant for most renewable companies and maybe especially also for the CO2 companies. So what's the green bubble, the tech bubble of our time ? It's a question I discuss a lot with investors and probably still do. As you know and as we showed earlier today, it has been a tough time for renewable shares despite the overall general market actually being quite strong if we disregard the last couple of months. And if we compare renewables to the path of the dot-com bubble, we find quite striking similarities. The good news is that we are close to the bottom. And it's not only the graph of how the market is developed. It's also the pricing in the markets. If you look to the left, we see the tech bubble where shares peaked at around 7 to 8x EV sales, and if we look to the right, they peaked at 7 to 8x EV sales also during this green bubble. The good news is that just as after the tech bubble, renewable shares are now trading on par with the general market. So on the relative, renewable shares are actually not that overpriced if they indeed were in January 2021. However, I must say also as an analyst that the general market is somewhat higher priced this time around. As you can see here measured by in our view, not a very good metric, but the best metric on companies that we don't have any earnings on at all, EV sales. And also, I will turn positive very soon. But I promise. But with Fed's outlook on or Fed's model, they don't say it, but the model tells us that it's approximately 90% chance of recession. The outlook for growth shares is somewhat soft. However, we have to assume out and investing in the future proved wise the last time around. You made many times your money if you invested. I think we're around here now on the comparison to the tech bubble. You made many times your money if you invested in tech. But it also took quite some time, 17 years from peak until you get your money back. Not all that long from where we are now, but still certainly a great amount of time. We're quite sure that it won't take this -- as long this time. Number one, probably maybe the most important reason is that we are running out of time to reach the 1.5-degree target or ambition over the Paris Agreement, we have 7 years. And just to remind you, 7 years is 2029. So it's ahead of all those 2030 targets that we are talking about every day. Secondly, probably also because of this target, we have got a lot of support in place. And regulations are driving a push towards renewables, here exemplified by the EU ETS price. Thirdly, despite a weak development of renewable stocks, the underlying growth in the market was remarkably strong in 2021. As you can see here, exemplified by a number of new project announcements across the various industries within the renewable space. And lastly, and maybe this is the most important is that we're heavily underinvested. In 2001, when we were investing massive amounts of money into tech companies, they didn't actually need all that capital. They were quite capital-light companies. This time around, we are investing too little into the renewable space, which is actually quite capital heavy. So by 2030, regardless of where the stocks go, we have to invest 3x as much as we have over the past 4 years to reach net-zero emissions. So that was our quick view -- very broad view on the market. And then a short comment on the EU ETS. This is just to show that supply and demand should be reflected in the price. The current speculation in the price isn't especially high. It's a bit higher than it was around 2015, '17, but lower than it was in the initial phase of the system. And I think what we're discussing now when we look EU ETS is will a recession and lower industrial economic activity -- the lower emissions from that, will that outweigh the increase in emissions from the power producing sector. And both coal and gas prices are at extreme levels. So I guess we shouldn't be burning gas and coal. Well, we have to as gas is the marginal price in Europe. As you can see here, both coal and gas are well in the money if we compare it. The dark spread is coal and the spark spread is gas. And when that's positive, it's profitable to burn coal and profitable to burn gas. And just to remind you, 1 tonne of coal equals 3 tonnes of CO2 approximately, which means added demand for 3 EU ETS allowances. So for every tonne coal we burn, we -- there will be an extra demand for 3 new allowances. And if we look at this graph, I'll try to explain it quickly. This is the electricity price forward curve. This is the generating cost of gas, as you can see, they are highly correlated. But you can also see here that the cost of generating coal for the next business position, so 24 positions is 2 years is actually profitable. That means that we will be burning coal for the next 24 months, because it's profitable. Most likely it won't be the full 24 months because the EU ETS price might lift this curb. And -- why is this important? Well, if we look at the constituents of the ETS system, more than 50% -- actually more than 60% of the system is from combustion of fuels, which mainly relates to the power sector. So the power sector is important, industry, less important versus combustion of fuels. So overall, that leads us to good support for the EUR 80 per tonne as we it see today, which is sad because it's a result of us emitting more than we should. But it's also positive in terms of translating the industry quicker and should incentivize the industry to move into, for instance, carbon capture solutions quicker than they initially had thought. So that was my quick presentation. And I guess we can bring the presenters up and open up for Q&A from the audience.

Absolutely. Thank you so much, Næss. So in my mixed sense, we don't have a mic, I guess. Do we have Isobel still online. Isobel? Hi Wayne and Isobel. Okay, excellent. This actually works. Very good. Okay. Sorry. Thomas, why don't you maybe.

I can start off with a question. I can start with -- we're seeing these projects coming. You can -- the interest is coming from your customers. When do you think they will turn over to the actual firm contracts? Like what's the time horizon here?

It's difficult to say. But to be our -- in our guiding, we have told the market that we will sign 12 contracts within [indiscernible] . We see from this portfolio. It can be faster than that, but we don't have a room for giving quotes related to that as of now. We firmly believe that we will sign our first contract this year. And 2 to 3, 4 contracts next year. But this is on us operating independently. But we are also seeking alliances with some of the global players. And of course, one of their tasks will be to sell more contracts. So hard to say, but as of now, it looks very promising. Ingar, do you want to add something to this or...

I think, Jan, we stick to our guiding that we provided earlier with, I believe, 4 small and 2 large projects by the end of '23 and double that by the end of '25. There's a lot more upside there, but we should be able to reach that. And I think also when you looked at our project pipeline, as we presented it, it was aggregated on when the project say they have committed to our targeted FID, final investment decision. And our contract has to be in place somewhere before the FID.

Thank you. Please just raise your hand in the audience, so I'll continue to Britishvolt. Good to see that you're securing supply chain, but just a curious question there. For how long are you able to secure the key raw materials, looking ahead 5 years, 10 years? Or what's kind of the standard now?

Well, the typical duration is around about 6 years for a supply contract for things like nickel and lithium and cobalt. There's a bit of a reluctance to entering to fixed price contracts too early because it's like buying a house at the peak of the market, why would you. So a lot of these suppliers are actually saying, we're not going to fix prices now. We're going to wait until the market settles down a little bit and additional supply comes online. And that actually fits pretty well as far as we're concerned for long-term pricing stability. For me, if I can actually go out and I can pick up the phone and I can order as much nickel and lithium as I want at the moment, I just pay a large price for it if I was to go and set the price now. So certainly, with our supply chain partners that we've secured investment with and we have a long-term relationship with, we're working with them to establish what that long-term pricing contract looks like and to make sure that it's got sustainability as far as the pricing is concerned. But also some of our supply chain partners already have long-term supply agreements with their raw material suppliers that run out to the back end of the 2020s, and those prices were fixed about 2 years ago before the significant pricing increase. So we do see that as an opportunity to be supercompetitive with a much higher performing product out to the marketplace. So we have a lot of optionality in our business model moving forward. And we're not dealing with some of the legacy, some of the existing manufacturers are dealing with.

Thank you. And another question, how does one prepare for kind of the technology development within batteries? I mean the best battery technology 4 years ago is not the same and as best today.

Well, that's part of the reason why we're building our facility in phases. So if you look at what's available on the market sales, if we specified a product around what the competitive landscape is in 2022. We're not going to be very relevant for 2024 and 2025 when we're starting to ramp up that significant production capacity. So we have to use our crystal ball and gaze into the future. It's something that myself and the team have been doing for 20 years is predicting where the future of battery technology is going to be sort of 4 to 5 years in the future. And then longer term, on the blue sky stuff. What is going to be realistically possible at the back end of the 2030s. So we're highly skilled in doing this and making sure that we make accurate predictions where the industry is going to be. And certainly, if you look at where we're pitching ourselves to be improved over the competition. And it's very difficult to do that in 1 or 2 metrics because you have 4 or 5 different things that you can play with, things like energy density, power density, fast charge times. These are all the things that we're bringing together into a common cell technology that we can differentiate moving forward. So a combination of being highly skilled at doing those future predictions, building the facility in phases so that we can accommodate technology shift over time but also making those inward investments as a company to make sure that we're looking at the blue sky stuff and making sure that we're in the game of things like solid state, which we've been public about over the last 12 months.

And Wayne in Canada have good experience from Svante. What you kind of see is the key differentiator for Capsol technology. Why is it gaining interest?

Reliability, I think we've got a very inert absorbent. And so our process is shown through thousands of plants that have been built that it's very operable. It was one of the things we learned in Svante is you put your technology in a plant and the plant doesn't run all the time. And all of a sudden, you're dealing with shutdowns and startups and that whole process. And I think that's an area that our technology can excel. And the other one is, frankly, it's got its cost competitiveness. And again, with everything we see around the world, we think we're at the lead in that front, too. So -- it's a bit like Isobel says, though, in terms of technology development, wherever the industry is now, we've got to keep and we've got efforts to keep moving our technology forward. And we may see ourselves in a lead at this particular point, but we've got to keep evolving, keep driving the technology so that we're in the lead in the future, too.

I guess my next question is maybe to all of you Capsol guys. I just saw the slide on how the battery segment shifted from being able to get as much orders as possible now you want the raw materials. I think it's maybe looking to be the same within carbon capture Well, now you want as many projects as possible. But then at one certain point in time, you will have to store that CO2 somewhere I guess, the raw material for storage. How do you see that?

We see this as also going to become a booming industry with the storing of CO2 in the ground. There's a new license around in Norway that will award licenses for companies focusing on storing. The same thing in the U.K., they have a round that will be -- you have to apply before first of September. And by North Sea itself has billions of tons of storing capacity. So it's about to have the industry engaged in this. And I think we have so much competence from the oil and gas industries in our part of the world. So really to ramp up. And I think that will be something to look out for well-prepared and motivated companies that entering into the space of storing. And I think bringing down the cost, of course, the first project the [ Northern Lights ]is expensive. You'll see the cost curve coming down. So that all helps to facilitate more projects. So this is -- we are in a very interesting space now, and we get asked by our customers what we do with the CO2, and we're also gaining more and more experienced knowledge around this, and we can reach out to people dealing with storage. So we're bringing them together in the value chain, but storing of CO2 is absolutely critical. They are much more advanced already in the States. Companies are developing huge sites for storing CO2, last licensing round in the Gulf of Mexico, 50% of all the licenses were given to, I think, Repsol and Exxon for storing CO2. So this is also a booming.

Any questions from the audience? Yes.

The competitiveness of your technology in those areas. I mean has been a cost of capture before. Is that sort of applicable to capture from [indiscernible] power generation from coal or how do you see that?

Now we see that we are very cost competitive from a CO2 concentration in the fuel gas from 5% to 25%. A coal-fired power plant produces 12% CO2 is right in the middle. We are very competitive in those industries. But coal industry in Europe is falling apart. It's going to be gone by 2030, whatever we do. So there are nobody willing to invest in carbon capture for those units. So then we have to look for other parts of the world. But within the refinery and other industries, yes, there's a huge demand there, and we are super cost competitive for those projects. But simply, they are not mature enough in our portfolio for us to say this is something we're actively working on right now.

If I can add to that. What many believe is sort of the last hydrocarbon standing the gas, gas turbines have a very low CO2 concentration in their exhaust gas. However, a lot of them also have a lot of excess heat and energy in that. Our system with the way it's built up is capable of capturing that energy, making the net cost of such a plant very attractive. We're doing quite a bit of work on that at the moment and looks interesting, frankly.

Yes?

Two questions. One, what kind of battery chemistry are you prioritizing and developing? And two, can you explain a bit about your funding situation and government backing? Did you hear the question or should I...

Oh, we don't have a mic up there.

Sorry, hold on. We'll do it over again.

All right. We're do it again.

Sorry. Can you hear me now?

Yes.

So what type of battery chemistries are you prioritizing and developing in your first factories? And number two, about your funding situation, can you give us a brief on that and the government backing you as well.

Yes, of course. Yes, no problem, just making a note of those. Right. So on chemistry, we have 2 approaches. So very high nickel, and pushing the nickel content significantly higher than it is today to improve the energy density. And of course, when you get to those levels, you become anode limited. So you have to do something in the anode too. And so looking at those advanced silicon -- silicon [ dopeds ] to increase the silicon content. We've been really, really successful. All the modeling work that we did back end of 2020, we've gone and physically built cells. We've got really, really good correlation between the physics space modeling that we did and the actual real-world performance of the cells. So we almost overlay exactly. So we've got a very high degree of confidence that all of our development activities. We can model the outcome pretty well, and get much more accurate results than is normal for them. So that's high nickel, which gives you high energy, which gives you a range. Looking at advanced phosphates, starting off with LFP in the development program today, and to give that more durable, longer cycle life solution, and also that improved cathode stability, which is important in very large format systems. So when you're looking at large commercial vehicles or marine applications or space range of storage, stability and longevity is really important. You've got to have durability. But quickly moving on from the standard LFP formulations into more advanced phosphates, which are giving us that 20% uplift in capacity compared to everybody else in the market today, but still retaining those safety characteristics, in these cycle life benefits. So that really is a routine to the lower pricing point for the volume market as well as things like commercial and [ space ] range of storage. So 2 tracks, but with variations around them on formulation, other tips, the binder technology and how we engineer the electrode, which are pretty critical to getting the kind of performance that we need to satisfy our customer demands and reduce those compromises. So I hope that answers the chemistry question. On the funding, we currently have an [ open seed ] round at the moment where we're raising EUR 250 million, and that's going to be closing sometime early in July. To date, it's just under GBP 200 million that we've raised in equity since we founded the company. So a significant amount of capital has been raised. We have EUR 100 million grant that is currently on the Chief Secretary of the Treasury's desk. It's passed through all of its due diligence. We did due diligence from back end of January, the application process took about 7 months. The due diligence was back end of January this year, and we passed through every single milestone and it's just waiting for sign off by HM Treasury at the moment, and we're expecting that today, tomorrow, by the end of the week. It depends how quickly you can write. And so it's a formality, and that's GBP 100 million grant nonrepayable and that's a cash grant from the government drawn down in tranches through 2023. And then we have the EUR 1.7 billion -- or EUR 1.4 billion plus GBP 500 million for supplier park on the property deal with Aberdeen and Tritax. So in total, about EUR 2 billion worth of funding is coming into the business in stages over the next 18 months, which is quite a significant amount of money, and just what we need to really accelerate our plans moving forward. If we add in the balance of the Series C because we've banked quite a lot of the Series C investment money already, but we still have some tickets that we want to close and still have room for some investors, and Morten will talk to you about that later, and then Series D and then Series E before we look at doing an IPO. And I do apologize about the construction noise in the background. One additional bit of government funding is CAD 675 million for our Canadian facility, and that's just the Government of Quebec. We're expecting the federal government to come and equally match that too. So that will be [ EUR ] 1.3 billion worth of funding in Canada, and we'll be getting those heads of turns signed up in the next couple of weeks.

Thank you. Any additional questions from the audience? Okay. Thank you. I think we're...

We're out of time.

Yes, I think so.

Excellent. Good figure, 3 minutes over. Very good. Well, first, thank so much to all the people joining us. Wayne, I'd say especially you, very impressive this was a morning. Isobel, thank you so much for being able to join us online. And Morten is here as well for people who have discussions or questions they want to have afterwards may feel free. So with that, thank you so much to everyone. Appreciate everybody taking part, and have a good day.