ARBAFLAME AS
CARBON TRANSITION ASA
Presentation and Q&A
21 September 2021
Disclaimer
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Strategy
Focus on investing in companies & technologies which contribute to significant reduction of carbon emissions
- Listed investment company a unique vehicle to take part in the ongoing energy transition from an early stage
- Multiple sectors facing large and lasting changes, creating opportunities to invest in long term winners (there will be several)
- Opportunistic approach but typically some common denominators:
- o Unique & proven technology
- o Scalable business model
- o High barriers to entry
- o Global potential
- Company may also invest more broadly in the energy transition space
Value proposition
- To unlock value through investing in companies which are:
- o Through its seed and venture phase
- o Currently looking for growth capital in pre IPO phase
- o Targeting an IPO in the short to medium term
- A unique investor for such companies as we provide a combination of:
- o Sizeable investment
- o Active involvement
- o Attention through stock listing
- o Strong shareholder base
- Unique access to deal flow through active network
- Income from legacy business to contribute to funding of new investments
* Company may also make investments which deviate from the illustrative model
Strategy implementation
Focus on investing in companies & technologies which contribute to significant reduction of carbon emissions
- Listed investment company a unique vehicle to take part in the ongoing energy transition from an early stage
- Multiple sectors facing large and lasting changes, creating opportunities to invest in long term winners (there will be several)
- Opportunistic approach but typically some common denominators:
- o Unique & proven technology
- o Scalable business model
- o High barriers to entry
- o Global potential
- Company may also invest more broadly in the energy transition space
Accelerating the transition to sustainability
September 2021
Patented process which will revolutionize the biofuel market with a superior product to currently available
Produces renewable biofuel, ArbacoreTM (wood pellets), that replaces coal and reduces greenhouse gases by >90%
Arbaflame's proprietary production process yields high-value bi-products, bio-chemicals, with significant positive environmental impact
Arbacore has superior qualities and economics compared to available alternatives
First commercial plant completed following 10 years of R&D and testing
Arbaflame in short
Arbaflame creating value from bio-waste
Arbaflame reduces CO2 emissions with a product portfolio that contributes to the circular economy
Source: 1) Global Energy & CO2 Status Report 2019, IEA. 2) SBP Audit Report for Energy and GHG data (SAR). Figures based on Grasmo test plant.
Arbaflame highlights
1
Strong fundamental market drivers
•Significant current demand for Arbacore; existing coalfueled power producers in Europe need to convert or to shut down(1)
Superior product with high ESG impact 2
• "Arbacore" is a superior product to white pellets
•Displacing coal with Arbacore reduces CO2 emissions with >90%
First fullscale project completed 3
•ArbaOne, has a capacity of 70,000 tonnes Arbacore and 1,500 tonnes of bio-chemicals
Attractive project economics with high scalability 4
•Standardized modular design driving down cost and ensuring scalability
Promising R&D development plan 5
•Several biochemical products will improve project economics
Market
Huge sunk investments in the 2,045 GW global capacity of coal fired plants
Currently 2,440 coal power plants in operation globally
16
Large variation in solar and wind production in Europe highlights the need for balancing options also in the future
Source: Company information; Clean Energy Wire; Fraunhofer ISE Study 2020 Note: 1) Fraunhofer ISE Study 2020: scenario 2050 week 42
Vast conversion potential in the EU with major upside potential globally
EU is leading the phase-out of coal
Source: Bloomberg New Energy Finance; Hawkins Wright, Black Pellet Market Outlook 2020; United States Department of Agriculture; Renewable Energy Institute, Japan; FutureMetrics, Japan Biomass Outlook, Fortum; Carbon Brief; S&P Global Market Intelligence
The Perfect storm for coal replacement fuels
Source: Company information; Factset; SSB Bloomberg, ARGUS-McCloskey; Nord Pool Group
ArbaCore having a significant cost advantage of coal
Source: Factset as of 03.09.2021; Bank of England; BP
Note: 1) Coal (API2) CIF ARA price per 03 September 2021, assumed calorific value of 25GJ/t, 2.34kg CO2 per kg coal and assumed coal plant efficiency of 45%; 2) ETS price per 03 September 2021 and assumed coal plant efficiency of 45%; 3) Expected production cost of ArbaCore for ArbaTwo
Biofuels stepping up to replace petroleum in chemicals and plastic manufacturing
Liquid markets that can easily absorb Arbaflame's production in the foreseeable future
Market
Arbacore is a superior product to white pellets – a 40 million tonne market
Arbacore versus white pellets
Arbacore is successfully tested and verified in 14 coal power plants
ArbaCore has proved competitive in real life case examples…
Promising R&D program
Promising R&D program
Arbaflame has a strong team executing the R&D programs
R&D PARTNERS
ASSOCIATED/ SUPPORTING PARTNERS
Successful R&D will provide significant value creation
Three R&D projects funded
Constructing small demonstration unit for testing different types of feedstock/ waste products from forestry & agriculture
Increase output of bio-chemicals (furfural & HMF)
EUR 10m EUR 0.8m EUR 1.75m
Optimization of process parameters to demonstrate that enzymes from wood sugar can grow to single cell proteins for fish food
Roll-out plan of production capacity
Reduce suppliers and prefabricate modules assembled on site will reduce cost & lead time
ARBAFLAME Q&A