Earnings Transcript for QFUEL.OL - Q2 Fiscal Year 2021

Operator: Good morning, and welcome to Quantafuel Second Quarter presentation. My name is Terje Eiken, and I am the Interim CEO and COO. After the presentation today, we will have a Q&A session. So please submit your questions as we go along. The next slide is a disclaimer that I assume that everybody reads carefully so I don't use time to present that. Together with me, Christian Lach, our Chief Commercial Officer, and Kristian Flaten, our Chief Financial Officer, represent status and outlook today. Before going through the quarter two highlights, I would like to focus on another important issue. The UN recently released a report concerning environmental and sustainability with a very, very clear conclusion, the time to act is now. When Danish broadcasting cover this report, they focused on Danish companies already acting. And they chose to do an interview with our Managing Director in Skive, [Rasmus Tasker] who explained how we act now, by processing household plastic into chemical products that are used for making new plastic with highest quality requirements. In Norway, a great example of acting now is our operation in Kristiansund, where we turn landfill or energy plastic into pellets that are used to make new products. The Quantafuel is not only Skive and chemical recycling; we are present in a broader value chain. We aim for the highest possible percentage of recycling with the lowest possible Co2 footprint by focusing on upstream logistics and combining mechanical and chemical recycling. We do it in Kristiansund, at Skive in cooperation with Geminor and are developing a similar facility in Esbjerg. Our target is to reduce the oil consumption and prevent plastic to get out of the cycle and end up in a nature. We act now. The fundament for any sustainable business is a healthy HSE culture. And I'm very happy to report that we have another quarter without recordable incidents. We fully appreciate the markets focus on Skive expecting confirmation of full production capability. As I will explain later, we need to install some equipment during Q4 turnaround to get to the long-term stable production enabling its full production capability. Nevertheless Skive operation continued to make progress. We are producing certain days in a row at each line at high load with mixed post consumer plastic. We have been testing and changing out components to create a robust reliable system and subsystems. We increase the ownership to 100% and I would like to thank the minority shareholders for their support during the development. Due to the extended duration of the project or the installation and the need for new equipment, the CapEx is increased to NOK 610 million. BASF showed their continued support by converting their loan into shares and they are through they became the largest shareholder in Quantafuel. In SPL, we have purchased the land or the property and we are now preparing for EPC startup. In Kristiansund, we are increasing both our capacity and capability within mechanical recycling. And in Hulteberg, we are building mechanical capacity in cooperation with Geminor. The CEO search is ongoing and our board will inform you as soon as they have concluded. It has been a very seamless transfer from Kjetil Bøhn to the management team and Kjetil continuous as a strategic advisor. As I already said, Skive is making good progress. But we cannot report proof-of-concept yet. We are developing a new industry, but we fully understand the investors' impatience. We are 100% convinced that and committed that we will get there. On the slide, I have listed some operational highlights like we are producing chemicals within the specification, we are producing at high load for three to five days at each of the two operation lines. We are producing at design capacity, we are pro assessing large span of plastic qualities and we have delivered production to BASF. I could also add a list of technical items we have worked on and sold like we have created a stable and robust plastic feeding system. We have tuned the control system, especially focused on the pressure control. We have implemented online regeneration of catalysts; we have sold issues related to clogging of process equipment. And last but not least, we have processed 355 tons of plastic during 1,400 training hours. Still, we have one known obstacle preventing the long-term stable production at the high load. We have now concluded on which equipment we need to solve this issue. We have ordered equipment, and it had been stalled in the Q4 turnaround. There is a stretch in the supply chains. And this stretch has caused the turnaround to move slightly to the right compared with our original plans. We are sorry for that. And we are now in close dialog with the key suppliers to maintain the Q4 schedule. As we all know, process equipment is always designed and installed with a certain surface capacity. However, during testing and tuning, we have seen that there are some bottlenecks or systems where we actually need a little bit more capacity during some operations. To cope with that, we have now borrowed capacity from line one and four to make line two and three operational. So and that is the reason why we have been running two lines off and on. After a turnaround in Q4, we will upgrade all the systems so that we have enough capacity in each subsystem to support each of the four lines. And thereafter we can run all the four lines. For this turnaround in Q4, we have a dedicated team planning the installation, following up the sub suppliers, planning commissioning, startup operational procedures. And with these changes installed, we are fully confident in reaching proof-of-concept around year end. And then we have the capacity to reach full production. Then I'll turn the focus to Kristiansund. Here we are developing a plant with a unique capability. EU targets 55% recycling within 2025 but we aim higher. Expansion of their mechanical capacity and capability is on track. We are moving now into a new facility providing more space for better integration and future expansions. And testing of the pilot reactor for chemical recycling is ongoing. After we adjusted some equipment and the operating procedures we now produce pyrolysis oil with high quality. The testing continues with a total program to ensure that we have the correct design basis when we start on rolling out the permanent chemical plant in Kristiansund. On a picture you see a smiling Erik Fareid looking at an oil sample from this pilot reactor. And for those who don't know Erik, he is one of the main reasons why we have Quantafuel today. Now I would like to hand over the work to Chris who will talk about technology, sustainability and growth. So please Chris.

Christian Lach: Thank you very much, Terje. I am very glad to be here. Very glad to present this. And I will be talking saying a few words about the positioning of Quantafuel in the circular plastics economy. Many of you have probably seen this logo. It's a very good one. But it's deceptively simple, because it shows or doesn't show or hide the complexity we're dealing with. Because if you know what we're talking about, then reduce and recycle are actually, in conflict with each other. Why do I say they're in conflict, that's because some of the most efficient plastic materials in use are not the most easy ones to recycle? If you look, for example, at a multi layer film, it will save around about 25% of packaging weight, yet it is difficult to recycle in mechanical recycling. So, in order to build a successful, effective circular economy, what in our mind needs to happen is that we take the materials that are most suitable in the application and then find the right suitable recycling methodology for that. So there is no one size fits all for the application but different approaches are preferred also when it comes to recycling, and that's why Quantafuel is looking at the bigger picture and building up our presence and why we are looking at both mechanical and chemical recycling and the sorting strategies behind that. I will now take you through the value chain we are building up in Denmark for the Aalborg pre-treatment plant, as well as the plant Skive and the R&D work we're doing. A significant step in this is the decision we made in quarter two to build a pre-treatment or sorting plant in Aalborg, what that plant will be doing is it will be taking in homeless waste from the Nordics, mainly with a target to put it into our chemical recycling plant in Skive. But there are some fractions in that waste, which is coming in which we don't want to put into that plant. For one hand, we see here on the upper end, there is some material which can be recycled mechanically, that is sorted out in this plant and put into mechanical recycling, which is ecologically and economically more effective. Then we are taking some material that we don't want to have in our chemical recycling plants such as drink cartons, that tetra packs or metals that is sorted out and taken off by Geminor, some plastic fractions for incineration. The mainstream then goes into our Skive plant, and then is forwarded as the pyrolysis oil as chemical raw material to our partners at BASF. And that is proceeding as Terje was talking about; we have achieved sufficient stability in our Skive plant to now be testing material from different suppliers. So that we can correlate what the resulting oil is with the input rather than any operational issues, which we might have. So we're now actually testing the materials supplied by our contractual partners, such as Geminor and Grønt Punkt. But we do not stop there. Today, the plastic waste that we're using is desperately looking for a home and the material we produce is in short supply. So it's easy to find off takers. But going forward as volumes increase, the plastic waste that is priced attractively will be harder to get. And the specifications we have to deliver to our customers will be more narrow because the dilution effect will be less. And this is why we are today developing the technology to deal with these future challenges. We are today working to improve our technology to be ready for what's coming. And for that we are working with our own teams in Sweden, Denmark, and Norway. But we're also working with our partners at NTNU in Trondheim, and with BASF and their partners, which is a cooperation that we think is very good and helpful. But just don't take our word for us being ready and doing this, we are keenly aware that we have to be able to prove that what we're doing is true and with downstream and third party providers ISCC PLUS REDcert2 for the certification that we can actually track our document of our sort of product the full chain from waste collection towards the production of new materials. In Q2, we have achieved certification by REDcert2 and ISCC PLUS. We're also aware that there's a discussion about the environmental footprint of chemical recycling. In Quantafuel, we are working with an external party, Norsus to do a detailed lifecycle analysis, both to be transparent, but also to use the right levers for optimization going forward. And this optimization we will then implement in our future plans and our future setup, which I will talk about in the next slide. When we talk about the growth, we have mentioned Esbjerg, Esbjerg is our first mega plant in Denmark, and one of the biggest in the European Union. This is the first time we are developing an integrated plant with all capabilities, achieving recycling rates second to none, because in one site, we are combining the sorting line the pre-treatment line, and then the chemical treatment line, which is phase two. And we have today purchased the land and are very grateful for the very good cooperation we have with the Esbjerg community. So Esbjerg continues as communicated and as planned. Currently, both industrial and commercial partnerships are being evaluated. And we will communicate any developments there as they are ready for communication. This is one part of the slide that you've seen before. And we've taken some liberty in adjusting that slide updating it, modernizing it. We have talked about Kristiansund, we have talked about Esbjerg. The only additional project I want to talk about in any detail is the Amsterdam plant because we have made steps forward on that one that are significant. We're working here with VTTI and VITOL and we have agreed the sight and scope of the plant and are getting ready to submit the permit applications. A number of other projects that we have communicated previously are proceeding as planned. And we will of course, inform whenever we pass a significant milestone. The main thing that is required to maintain this broad effort and fund these projects is cash. And that's why now it is a very good time to hand over to Kristian. Kristian, stage is yours. Thank you.

Kristian Flaten: Thank you, Chris. Our full financial figures are included in the first half year 2021 report, but I wanted to highlight a few key items for the year so far. Quantafuel has total assets of NOK 1.55 billion with a total equity of NOK 933 million at the end of second quarter. We had NOK 495 million in cash and we are pleased to see that we're getting closer to the end of our project CapEx for Skive and Kristiansund. Remaining CapEx for the two plants is NOK 70 million including the additional costs described by Terje. Gradually this means that we are shifting focus towards operational cash flow from Skive and Kristiansund. Further, I would like to highlight the completion and integration of important M&A transactions like Geminor, [Rayplast]. Skive minorities and Hulteberg licenses, which mean that we are also streamlining the financial and operational performance within Quantafuel. During this process, we have a tight follow up on all costs, SG&A and OpEx to ensure lean and cost efficient, day to day operations. By the end of second quarter, we had debt of NOK 80 million adjusting for the conversion of the BASF convertible loan in July. BASF now has an ownership of 10.6% and it's our largest shareholder. We are grateful to see the continued high interest in our company and our share. 650,000 shares trade on average per day. And we have more than 6,000 shareholders where 60% are non Norwegian. In addition to our major industrial and strategic shareholders, we have an increasingly broader interest from institutional and private investors across Europe and in the US. We get a lot of investor calls and comments, and we acknowledge our investors need for information, we can ensure you that we will always communicate important information to the full markets. And by this, I'm handing back to Terje for the summary.

Terje Eiken: Thank you, Chris. And thank you, Christian. As a closing remark, I would like to say that we strive every day for sheer excellence, allowing everyone to walk home safely. We are committed to acting now creating a sustainable business attacking one of the major environmental threats. And there are three takeaways I would like you to remember from this presentation. One, we are confident that we will reach our goals in Skive. Two, we are making significant steps towards a combined mechanical and chemical recycling setup. And three, we have a robust financial position. Thank you. That ends the presentation. Then I would like to invite Chris and Christian Lach to get it by myself.

Operator: [Operator Instructions]

Terje Eiken: And then we open up the question log. This is on the fly. So you just have to excuse me that I have to read first before we can answer. Did you pyrolysis technology in Kristiansund is probably more important than Skive as first generation. And it will probably be the basis for a big scale rollout. I would say the reactor in our processes is very important. But it's not the core part of Quantafuel technology. We will always search for the best possible reactors, creating the best possible pyrolysis gas suitable for the downstream purification process which is the Quantafuel. Is there anything you would like to add from the R&D, chemistry point of point of view, Chris?

Christian Lach: I like what you sometimes say sometimes it's better to have a Toyota that's running very well and reliable, rather than the -- I'm not going to name any brand now the car that's very fancy, but always sitting in the garage. So I think one of the key points we should mention here is that the Kristiansund reactor is driven electrically. So that from a co2 point of view make -- may make sense in certain applications. In other applications, the Skive reactor, which uses the gas produced in running the pyrolysis reaction, may be the better solution. So in general, I think as I also talked about the R&D work we do, the key thing is to have the right set up for the right location and the right partners. And I think that's the best answer we can give. We look at what's given in a project and what do we want to build there. Like the Amsterdam plant is going to look different from the Esbjerg plant, but that's because Amsterdam is a different location from Esbjerg. I hope that answers the question.

Terje Eiken: The same person is asking a follow up question. So, we can take that also. Isn't the proof-of-concept or commercialization more important to achieve in Kristiansund than Skive since this is more that's new technology. To that one I would say in Skive, we are proving that we are able to run for a long time with a high percentage of uptime, producing the right yield and the right quality. That is based on a reactor which is continuously running and producing this gas flow, it is with pyrolysis gas that will be the same in Kristiansund. So if we can prove it in Skive, yes, of course we have to commissioning also new test or a new plant in Kristiansund but the proof of Skive is key to show to ourselves and to everybody that this technology is capable of long term stable operation. And we will have the same in Kristiansund but it's not more important than Skive. Agree?

Christian Lach: I fully agree, as always, Terje.

Terje Eiken: Thank you. I think this one goes to you, Kristian, how would you like to build the trust of shareholders in the future?

Kristian Flaten: Thank you, Terje. First of all, it's about for us to deliver on the technology on projects and operation. And from a communication perspective also, as I underscore in the main presentation, we will make sure of course, always to communicate what we have important information through the stock market at the same time. So this first is just kind of continuing deliver on the putting on all the best resources on all levels.

Terje Eiken: Yes. Another one, which is touching into both finance and technology and sustainability. Do you still expect a net positive income on receiving plastic waste, including disposal of the plastic you cannot use in your plant?

Christian Lach: I can talk about this for many hours, you know that? So and to give a short answer if we do recycle the plastic, yes, indeed I do. And that's why we are entering the sorting step in Aalborg, in Kristiansund and in Esbjerg because the recycling rate, especially in Denmark, in the Nordic countries, is key for taking in the waste. So if we can confirm that we do recycle the material. And that goes back to everything I talked about with certification and Geminor and the integration into the ecosystem, then we will be getting paid for the waste we're taking in and we will be getting paid for the material we produce. However, if you look at for example, we told there is always discussion whether some of the material will also be used for fuels. In that case, we will I assume not be paid for the material we take. And so the payment is very clearly tied to being able to transparently and trustworthy-ingly, I'm looking for the right word. I'll tell you show that you are recycling this in a meaningful way. I hope that answers the question.

Terje Eiken: I trust that, yes. Kristian the same person has a follow up question. Can you try to put some words on the pricing for the output you produce? What is the average price per ton? And how do you see the pricing going forward?

Kristian Flaten: Yes, we have guidance for that on the long term, we have a guiding and we maintain guiding that the offtake price is $1,000. But we have also indicated there is upside potential but no change to guiding. Currently, we have an agreement for somewhat lower than $1,000 per ton, but we find that the market remains still very supportive to our products.

Christian Lach: And if I may jump down because I think there may be a certain uncertainty about what I said and what you said. And I think the key point is, if you today look at the price for chemical feedstock, that price is below the price for fuel. So what we see is that probably going forward, maybe not short term, but going forward, the price for chemical feedstock will be below the price for fuel. But then we get the payment as I said before, for the plastic waste. So we assume that the overall profitability between supplying to fuel no payment upfront, but higher price or into chemical recycling into plastics or other materials, lower price, but upfront payment will in the end remain the same. That's why we are working with the figures that Kristian just mentioned. I just thought it helps if I tried to explain this.

Terje Eiken: The same person is also asking about do we see any differences in CapEx and OpEx going forward based on what we have learned in Skive. And if I take that myself, if we were to build Skive again, it will be at a lower price or lower cost. I think the key learnings from Skive are continuously brought into our engineering organization. And of course we base every new project on this learning so the focus is for us now is to do it right the first time. Skive is built kind of couple of times. So and what we do is Skive is not more expensive than if we will do it right first time. But if you do it right first time, if we wouldn't need to go through the intermediate steps. That is the reason why we also have to increase the cost that we have to add equipment, replacing existing equipment, which is, of course, is a cost factor. So going forward, I wouldn't say that the Skive experience is driving the CapEx nor the OpEx occur. But make us able to do it right first time. On the general basis, there is a constraint in the market and an increase in steel prices, for instance. So what we see today is that the prices are at a higher level than they were, let's say, six months ago, that's not driven by our experiences, but more about driven by the general market condition. And that could go down again we never know. That is out of our control.

Kristian Flaten: Just also add to that, we also increased guiding already in the previous quarters that has already been communicated.

Terje Eiken: So in terms of Kristiansund, when do you expect the first production and the revenue? Kristiansund is an existing plant, where we have a mechanical line; this line is now being expanded to increase both capacity and capability. And this line is already generating revenue. With respect to the chemical pilot, we are producing oil; we still have to ship the first container to Germany. But that's not the significant volume, the significant volume will be when we have concluded the pilot testing, and building the permanent plant, where we are aiming for a capacity of around 10,000 tons per year of plastic and fit. Yes, same person is asking also about partnership in SPL, is it industrial or financial or value chain? I think that is very close to your slide, Chris. So you should grab that one.

Christian Lach: Okay, and so elaborate. I don't want to do that much at the moment. But I will say that as we are still entering new fields, and if you look at the waste landscape, recycling landscape, I shouldn't say waste, I should say recycling, then it's a very complicated setup with a lot of players and a lot of different streams that you look at. So I would be happy and am discussing with players who have experienced in the industry. And I would hope that any outcome will also include a financial investment. Because if both parties have a financial stake in the investment, then I think both are really committed. I think that is a fair way. Anything you'd like to add, Kristian?

Kristian Flaten: No, just supporting that we are kind of carefully and selectively pursuing partnership opportunities for both industrial and financial.

Christian Lach: And we have done that for the past many months, I would say.

Terje Eiken: So I'm trying to keep up with the questions here. It's this is kind of online exercise. So I have to try, I try to concentrate on two things at the same time. Can you please elaborate around the timeline for proof-of-concept and the timeline for stable production? As I tried to explain, after this, turn around mid Q4, we'll be installing new equipment, we have stated that we expect to be in a state where we get long-term stable production, which will then enable this proof-of-concept. And we have written in our report that we expect it to take place around the end of the year. We cannot totally let's say disregard a possibility of the proof because that happened even before but the likelihood is not very high. After the upgrade after the turnaround, we will be in a position to do it. But of course when you install new equipment, you will always need some time to chill it to stabilize the production to stabilize the whole process. So we aim for end of the year, it might slip into next quarter. But of course, the target is to do it as quickly as possible after a turnaround. With respect to stable production, we will gradually ramp up the production in Skive. This is not about switching on the power and then you're running four lines for 100% production, this is about taking in one line but other and gradually ramp up the production. So that the run rate at the end of the year will be at the plateau production or the full production, but from the turnaround and during 2022, we will gradually ramp up the production. But the important thing is that it's very early to prove that we have the capability to run it at a high level. But we will not produce at 100% from day one. I think everybody who has worked with a chemical plant, and you can probably elaborate more on that Chris has that knowledge that it takes time to introduce this new equipment and to tune a factory. Anything you want to add, Chris.

Christian Lach: I think you've said it very well. Thank you.

Terje Eiken: Thank you. Then the follow up question on the turnaround, what kind of modification work will be performed during Q4. We as I said we have one remaining obstacle which is preventing us from reaching this stable production at high load. We have concluded on the equipment we need to create that stable condition. We have ordered it and we are following that closely up. In previous presentation and discussion with investors, we have always stated that we are reluctant to dig into the details because it's a high shareholder value. What we have let's said found out in Skive. So when we have concluded now that we need to take out something to put something else in that is a part of our IP and is a part of the shareholder value. If we disclose all the details, which we of course could do, that will help potential competitors to do it quicker and at a lower cost. And that's the reason why we don't want to go into detail. So, you have to trust me, there is today one known obstacle preventing us to reach the long-term stable production of high load. We have concluded with our partners on the right equipment to solve it, we have order it and we will install it in Q4. Next question is about when it's reasonable to reach full capacity. I believe I have already elaborated on that one. Then, I mentioned that Skive has managed to reach high load for three to five days at a time. Does that mean 90% to 100% utilization on the line? Do you like to take that, Chris? So that I can take some water.

Christian Lach: Okay. We are targeting of course, we have said that we have reached 100% utilization on line. So we have shown that the lines can reach full utilization and on a longer term, we talked about three to five days, it will not be 100% it will probably be an average around 90% or below. If you do the calculation on the figures we have communicated in this discussion, it is 1,400 hours and roughly 350 tons that we have consumed over all including startup and shutdown and that figure calculates to about 40% average utilization over that time span including the ramp up and shutdown. So, you can say that if we are running stably then it will be around about that utilization. That is a, have I disclosed too much?

Terje Eiken: No.

Christian Lach: Nothing, somebody with a calculator couldn't have done.

Terje Eiken: And I guess that quite a few of our listeners they are very clever with the calculator. So, next one, what is the energy consumption per kilogram produced -- kilogram product produced. I would like to try to install if your technology will be competitive without the PtL in the market. So this one is important. If you look at Skive and you do this pyrolysis of plastic, you will always have a certain percentage of the production which is converted into very light gases which are the typical methane, ethane, propane. These gases they are not fluid at ambient pressure, or temperature. So if you want to use them to something, you either have to, you can burn them and create electricity, or you could cool them down and you can have that as a barbecue gas, or as we do in Skive, we use them to -- in the burners to heat the process. What we have disclosed earlier is that approximately 10% of the plastic put into the process is converted into these non condensable gases, which we are using to heat the process. So that when you're talking about consumed energy, you can think about the 10% and other kind of external energies are very limited but if you get the process.

Christian Lach: I would like to jump on this; you would like to calculate whether our technology can be competitive with other technology. I can talk a long time about this. But there are two parts to our co2 footprint that are significant. One is logistics of supplying the plastics to our plant and then taking away the products. The other one is the heat energy needed to generate the oil. However, it is much more important that you use the right kind of energy and take the right kind of application for what you produce, then what kind of thing you do. Like in Norway, Kristiansund, all the electricity is co2 neutral, and it's cheap. So an electrically driven reactor makes sense. In other regions, electricity is generated from burning coal, and also very expensive. So it doesn't make sense to do an electrically run reactor there versus using the gas you produce. Then again, sometimes maybe you have a good use for the gas. So you want to do something else. So I think this kind of thinking is much more important for your competitiveness than what is the specific consumption per kilogram of plastic waste pyrolysis.

Terje Eiken: Yes. Thank you. Here's one on finance, Kristian, do you have a financial partner for the pyrolysis? And will it be 50

Kristian Flaten: Yes, we would partly answer that to get with Chris previously, but currently, no, but we are doing and finalizing a number of discussions, both early stage and partly also late stage discussions, industrial and financial.

Terje Eiken: There is a question also about if we can explain the development of the stock exchange and why our share price has had a negative development.

Kristian Flaten: Oh, yes. So of course, we are not happy, of course, to see what we have kind of delivered, we are not happy to kind of to see the performance of the share price. We are here to create also shareholder value to all investors. And we are very, of course focused on this in our everyday business. It's important for us to underscore that we understand the frustration; we also feel the same we are also invested both directly and indirectly. We do everything we can on technology, projects operation as earlier stated. And then kind of the down market will kind of decide on the price going forward.

Terje Eiken: Yes. A person is asking how certainly we are in percent, that we will reach a proof-of- concept without further obstacles than those already identified. It's very hard to talk about what you don't know. But what you need to believe is that we have disclosed everything we know. So we have one known obstacle, we have the solution. And we are confident that we will resolve it. To speculate about what we don't know. I think I can leave out for the dinner chat tonight. But we have disclosed everything we know and there is nothing hidden in Skive today, which we're not attacking and solving in Q4 turnaround. One person is asking about is there any interest in the market about the licensee parties with our technology?

Christian Lach: Yes, indeed we have. The reply is that at this point in time, because it's not just about building the plant. It's also about how we sought the waste, how we set the whole thing up what we do with the product; we don't think it is the right time to talk about licensing our technology at this point in time.

Terje Eiken: Yes. Then we have some questions about Skive again. First one is the conversion rate? How much plastic we need to make one ton offtake? Maybe we can turn it around and say, if you take one ton of plastic, the offtake is a ton kilo of product. That is still our target and what we are aiming for. Of course, during the startup, when we have been tuning the factory, let's say the yield has been lower. But what we see is that when we get off to the right load and we are running at high load, the yield is where it should be. So during testing, it has been partially lower when we get to the high load the yield is where it should be. I think that's a fair statement. Same person is asking there have been adjustments or CapEx at Skive almost every quarter. Why has there been so difficult for you to focus CapEx and is the final CapEx forecast. As I said, we have taken into consideration everything we know. And based on that we have adjusted the CapEx both because we need new equipment and those we prolong the time for the product team to work on Skive. So based on what we know, today, there will be no further adjustment to CapEx in Skive. Why it has been so difficult to be stable on CapEx? As I said, this is about creating a new industry. Of course, if you have built Skive, right the first time, the CapEx has been different, but we have to adjust as we learn. And with these learnings there are some adjustments, the project is prolonged. And that has driven the CapEx up. Last quarter, we didn't adjust the CapEx. And we were proud of that. This quarter, we had to do it. And I really hope that this is the last one the last quarter we need to adjust the CapEx. Then the person is talking about when we operational what would be the regularity of the lines. So it is right to assume that it will be almost never before lines operational at the same time due to maintenance fueled on future issues. I think it's fair to say that every plant wherever there is a plant turn around every year for doing maintenance tasks, we are planning with a very high degree of uptime. So most of the year, all four lines will work in parallel. That is also part of the concept that we are using the NTG also the non condensable gases from the lines to feed back to the burners to heat the line. So we rely on stable production and we rely on stable production from four lines. And most of the year, they are supposed to work in parallel. But we have to expect the turnaround once a year for maintenance. That's fair thinking.

Christian Lach: I would like to turn that question around and say if we have the assumption that almost never we'd have four lines running at the same time, then we would not have set the benchmark for proof-of-concept as high as we have done. We are expecting a very high reliability of these plants, of these lines when the plant is operational. I think that's a fair statement.

Terje Eiken: There's a question about FID in Esbjerg and when. Sorry but we cannot comment on that but as soon as we have concluded we will let everybody know at the same time of course. There is a question about the BASF. Is BASF still fully committed and involved in details and development?

Christian Lach: The first part you have to ask somebody else. I can talk about my feeling. I am working sorry, I just covered the microphone. My feeling is that we are working together very closely. We are fully open. BASF have all the details and development. They are closely involved. They have people on site, both in Kristiansund and Skive this month. So from our point of view, I say yes, I judge the fact that they are now the biggest shareholder as a statement from their side that they see this the same way. That's I think all I can say about that.

Terje Eiken: A person is asking, why can you say you are 100% confident that your technology works as assumed? Isn't there a certain possibility that it will run for some days and that you've done stuff need to stop and clean the system before starting again. This is what we do today that we are running for some days, we are cooling down a line, we are open it, inspect it and cleaned when necessary, reassemble it, inspecting, heating and running. The whole thing with this equipment we are installing is that we remove this obstacle, which are -- which is preventing us from the long-term stability, which is also mean that we don't need to stop it and clean it. So based on what we know, we are confident that it will work, that we don't need to stop it, inspect it and clean it with the high frequency we need to do today. So that's the whole thing with new equipment that we do not need to do that. Another question about details about the technology we will plan to install in the Q4 turnaround. As I said, we think it's the right thing for our shareholders that we don't disclose the details because it's a part of what we have learned and part of our IP so sorry that we will not do that. There's a question for you, Chris. What is the quality of the pyrolysis' output? And does BASF need to refine the product afterwards?

Christian Lach: I think that is a somewhat confidential question also a difficult one. Because as I said, the quality of the product is variable according to the way the plant is running. And the feedstock we are putting in. We are working very closely with BASF to align the quality of the product that we have to their needs. I said before I think as the volumes increase, we expect the specifications will be more strict. But beyond that, I do not want to go into any details today. Same reason. Sorry, but I think this is really IP within quantum field and BASF in this case.

Terje Eiken: I combined two questions here about revenue in Skive and shipment of products. The question is, are we booking revenue in the same quarter as we are shipping the products?

Kristian Flaten: No. So we have also kind of produced for, say, inventories. We in addition to one large holding tanks, we also have three kind of storage tanks for products.

Christian Lach: It goes back also to the relationship with BASF. Maybe they are paying us and we have a very good relationship with our partners, both upstream and downstream.

Terje Eiken: There's a question about when we expect to issue new shares for finance future projects. And I think this is same that did they, if we decide to do that, of course, we have to inform everybody at the same time and we will inform as soon as we have taken such a decision, if taken. So that is nothing we can disclose here. But we will do it in according with the governance rules of the stock exchange.

Christian Lach: And we have multiple avenues as we partly indicated as well.

Terje Eiken: Question about the future selling price and dollar per ton from the output from Skive. I guess that was already covered.

Christian Lach: One thing I usually say that I haven't said today is I would assume that it will always be based on a benchmark, be it fuel or be it chemical recycling. So NAFTA benchmark plus a sustainability premium minus a quality penalty. The quality penalty depends on the way the plant is run. And the sustainability premium depends on the availability of recycled feedstock. So anybody can play with models based on that I think.

Terje Eiken: And here Kristian is the question you cannot answer but I will still ask you. Any projections on when we will move from your next growth to Oslo Stock Exchange.

Kristian Flaten: Yes. We are very happy kind of with our current listings on Euronext growth. And of course, we have also communicated that on the long term, we have an additional plan to go for the full listing on the main board. But currently we are happy kind of with the current listing on there is no current plans or anything on that and that would be kind of decision by the board in due course.

Terje Eiken: Do you expect firm commitment during 2021 from an investment part now to start build a new factory or it would be reasonable to expect such commitment after Skive has been running in full capacity? I can say that we have a portfolio of projects. Chris talked about some of them today. Of course, behind that portfolio, there are a lot of prospects. There are a lot of companies, persons interested in developing projects together with ourselves. When we get to the stage where we have passed final investment decision with our board, we will of course, inform everybody that we cannot talk today about when we believe that will happen. We will always inform you when it has happened.

Terje Eiken: Okay. I struggle to see the questions here coming up. So I guess we have run out of questions, I think so you are nodding. The support is nodding that we have gone through most of the questions. So together with Kristian and Chris, I would like to thank you for participating. Thank you for a lot of good questions. We have done our best to present the status and outlook to answer your questions. We are transparent; we disclose what we can disclose. And we are happy that so many persons are interested in Quantafuel and in our technology. What we do now to act and we are really acting now. And we trust that this interest will keep on and we will do our very best to not disappoint you on what we have presented today. So thank you very much and have a nice day.

Christian Lach: Thank you.