Disruptive technology in existing infrastructure - bringing Circular Economy to the next level 2019-05-22 Recovered Carbon Black Westin Grand Berlin Berlin, GERMANY Fredrik Olofsson Sales manager
Scandinavian Enviro System’s recovered Carbon Black (rCB) Taking a leading position in a global industry with a game changing technology that... • solves the global waste tire problem • slashes CO2 emissions, • provides a solution to global vehicle industry on recycling ...and get better profitability than the old technology
Important 2018 • DECEMBER: MoU signed with EE-TDF Cleveland LLC for plant establishment in events Texas, USA. • JUNE: MoU signed with Treadcraft Limited for a plant establishment in New York State, USA. • MAY: MoU signed with Windspace A/S for a plant establishment in Denmark. • APRIL: Quality anniversary: over 40 millions rubber components with Enviro´s rCB have been delivered to Volvo Cars. Annual volume rate now approximately 20 million components. • Working capital consolidated current during the year via offset issue in total of 13,7 MSEK and inflow of approximately 84,5 MSEK gross via rights issue. First quarter 2019 • FEBRUARY: Elysium ApS (planned JV with Enviro as co-owner) signs an conditional rent agreement of land for plant establishment. • MARCH: A life cycle assessment (LCA) is executed for Enviro´s. Results states that production of our rCB reduces approximately the CO2 emissions with 80% compared to production of virgin CB.
Enviro’s rCB reduces CO2 emissions by over 79 %, better than earlier estimates Global Warming Potential, GWP , index used to make it possible to compare the greenhouse effect for greenhouse gases at a joint scale with the greenhouse effect for carbon dioxide. Recovered carbon black leads to CO2eq emissions that are 79-84 percent lower than the emissions from the production of virgin carbon black – a figure considerably better than earlier estimates of 60 percent. The LCA results show, among other things, that for each kilo of recovered carbon black that replaces virgin carbon black, total emissions are reduced by 1.43-2.00 kg of CO2. The LCA study was carried out in accordance with ISO 14040/14044 for life cycle analysis.
LCA (Life Cycle Assessement), 30 000 mT plant based on Enviro technology study 1 ton CO2 reduction/ton steel ca 14 000 ton Crude oil can be -80% 40 000 replaced Reduced CO2 impact Flights Stockholm – New York - 4 -
The carbon black market is expected to grow with 8,8% annually, End-use to a market value of 30 billion USD 2023 – afterwards 6,6% per annum. Proportion of market value By product type (2017) Market growth Estimated global carbon black consumption 2018-2025 (billion USD) Other*, 2% Plastic, 4% 34,8 30,4 27,9 MRG**, 20% 25,7 23,6 End-users 21,7 CAGR Carbon 6,6% black Tire, 74% 2019 2020 2021 2022 2023 2024 2025 *Other such as ink, toners, coatings and paint ** MRG Mechanical Rubber Goods Source: (both graphs): Smithers Rapra - 5 - www.grandviewresearch.com/industry-analysis/carbon-black-market
Carbon black prices increases more rapidly than oil prices as a consequense of increased demand and harder and higher environmental requirements. MARIETTA, Ga. — Beginning May 1 , Birla Carbon will Enviro rCB; advantages, pricing, trends etc. raise base prices for all its carbon black markets in • No connection to oil price North America, a move it says is driven by increasing operating costs. • Low PAH content All shipments made on or after the May 1 date will be • Huge CO2 footprint reduction (approx. 80% subject to the price adjustment or $170 per metric ton. compared to virgin CB) Those with supply agreements will see price increases • Long-term price agreements (fixed or connected to implemented upon renewal of the agreement, Birla other commodity) said in a news release. • 10-15 % in discount compared to virgin CB. BOSTON - April 2,2019 - Effective May 2, 2019, or as • More and more applications are approved for 100% contracts allow, Cabot Corporation will increase prices substitution of the vCB with our rCB. Easier for for specialty carbon black products by up to 8 percent Sources: Cabot, Birla, Notch Consulting rubber and tire industry to make decisions in North America. around introduction of our rCB. - 6 -
Update around new products, customers and applications • New rCB grades under development based on feedstock (CE, Agriculture and mining) • “CE” grade close to be commercialized . Approved by leading compounder company, replaces virgin CB to 100% (standard grade of rCB replaced 50%). Another leading solid tyre producer have approved our • rCB. Introduction of the rCB soon to be executed. • Leading compound company want to start introduction of our rCB. • Ongoing discussions and evaluation of our rCB together with major tire producers. Enviro ´ s rCB grades is approved continuously for new • applications. Ongoing discussion with rubber and tire industry for off-takes • linked to new planned plants. - 7 -
The interest in Enviro´s material have increased significantly the latest years. • Rapid increase during the Qualified interest from customers for Enviro´s rCB. year from 9 to over 18 Volume, mT 18000 applications and a growth 16000 potential volume from 2 000 14000 mT to 18 000 mT. 12000 10000 • Global demand with interest 8000 6000 from Europe, India, China and 4000 USA 2000 0 • Backlog is expected to growth and create challenges in deliverability of rCB from existing Swedish plant the coming months. - 8 -
During 2018/2019 Enviro have experienced significant higher interest in our material study March 2019 September 2018 Customer Customer segment Application % rCB Volume ton annually Status Volume ton annually AnVA Producer/compounder Grommets (Volvo Cars) 100 80 Active orders 80 AnVA Producer/compounder Sealings (Alvenius) 100 8 Active orders 8 Elastomeric (Hexpol) Solid Tire Producer Solid Tires 25-50 150 Active orders 150 AnVA Producer/compounder Not Public 100 Not public Awaiting order Not public AnVA Producer/compounder Not Public 100 Not public Awaiting order Not public AnVA Producer/compounder Not Public 100 Not public Awaiting order Not public Multinational Tire producer 2 Solid Tire Producer Solid Tires Not public 240 Awaiting order 300 Multionational Compounder 1 Producer/compounder Rubber cloth 25-50 500 Awaiting order Not public Carbon Black Trader Trader Various Not public 1000-2000 Awaiting order Not public Multionational Compounder 4 Producer/compounder Various including conveyor belt 25-100 500-1000 Awaiting order Not public Rubber Producer Compounder Various Not public 0 Awaiting order Not public Rubber producer Producer/compounder Various 100 220 Awaiting order 120 HGF (Hamstad Gummifabrik) Producer/compounder Agriculture applications 100 50 Awaiting order Not public Multionational Compounder 1 Producer/compounder Automotive applications Not public 0 Production trial Not public Multionational Compounder 2 Compounder Rubber compounds 50-100 >1000 Production trial Not public Multinational Tire producer 5 Tire and Rubber Producer Tire and rubber applications 10-100 >8000 Production trial Substantial Multinational Tire producer 3 Tire and Rubber Producer Agriculture/solid tires 10-100 1000-5000 Production trial Multionational Compounder 3 Producer/compounder Conveyor belts Not public 0 Production trial >3000 Multionational Compounder 5 Tire and Rubber Producer Solid Tires and conveyor belts 50-100 500 Awaiting order Accumulated Approx: 13 200 - 18 000 Approx: 5 000 - 9 000 - 9 -
Recovered carbon black takes ground and the interest from leading players enhances. ”Will increase recycled materials in new tire production to 10% before 2025 ” 2019 2018 Some of the ”Will increase the recycled participants; rCB is presented as materials in vision 2025” [graph shows a goal of 25-50] %] a part of the sector. Michelin Continental Hexpol ”Ambition 2048: Tires will be Semperit made using 80% sustainable Hankook materials and 100% of tires will Birla be recycled” - 10 -
The interest to make investment in Enviro´s technology is obtained from all over the globe. Numbers of potential plant Plant project with ongoing mature discussions. investors that has approached Customer Plant capacity Status Customer sector Country Enviro Windspace 30 kT MoU Financial Investor Denmark 2014-2018 Treadcraft 30 kT MoU Recycling USA EE-TTD Cleveland LCC 30 kT MoU Tire recycling USA Number ArticCan 30 kT MoU Energy/recycling Canada Not public 30 kT Quotation Recycling/Investor USA 60 Not public 30 kT Quotation Investor/Industry Abu Dhabi Not public 18 kT Quotation Tire produer Chile 50 Site evaluation 40 Buffalo, NY 30 20 10 0 2014 2015 2016 2017 2018 - 11 -
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