Verbio Se

Good afternoon, and on behalf of Montega, a warm welcome to today's earnings call of Verbio, following the publication of the Q1 figures of 2023-2024. The CEO, Mr. Klaus Sautter, as well as the Head of Investor Relations, Mrs. Alina Köhler, will guide us through the presentation and the results in a moment. After the presentation, we will move on to a Q&A session in which you will be allowed to place your questions directly to them. So with this, we're looking forward and I hand over to you, Mr. Sauter.

Thank you very much. Welcome. Good afternoon, ladies and gentlemen, to our Q1 earnings call. I'm here with Alina Köhler, our head of investor relations. and we will cover our first quarter results and discuss current topics. We prepared a presentation, so let's start with the presentation, first page. So first of all, the key figures in Q1. So we delivered in all segments new production records, new production volume records, and this is underpinning our efficiency measures in Europe. And additionally, new capacities mainly related to our acquisition of the ethanol plant in Indiana, South Bend Ethanol. But as I said, also due to the bottlenecking in our German production units, we were able to increase the volumes in ethanol and biodiesel. The production of renewable natural gas went down a little bit, but this is due to our de-bottlenecking measures in the ethanol plants where we had to stop production partially to implement new technique, new equipment to increase the production in the next quarters. EpiCA came down from 121.4 million to 48.8. And this is, well, it's not comparable because especially in the last quarter, we had still the advantage of favorable feedstock positions. So the result with 50 million EBITDA, which is up sequentially down on year on year, but compared with the last quarter of the last business year, I think it is a reasonable margin what we were able to achieve. Our net cash was 10 million euro. So this is due to the investment growth. We did about 50 million of investment in our growth project. The equity ratio is at 72.6%. And now let me hand over to Alina to explain you the results in the biodiesel segment and furthermore. Alina, please go ahead.

Thank you, Klaus, and also a warm welcome from my side. So let's first look at the EBTA bridge from Q1 2022-2023. to Q1, 23, 24, which you can see here from the left-hand side to the right-hand side. So clearly we saw a decline in our EBTA, which was driven by both segments, biodiesel and bioethanol. And as Klaus just mentioned, for last year, especially in biodiesel, the comparability is not given. We had a very good feedstock position there, which was beneficial, and it was matched by very extraordinary biodiesel prices. So clearly, we're still happy that we could report a sequential increase in the quarter, which you can also see on the right-hand side of the chart here. The decline in ethanol year over year is mainly driven by lower ethanol margins, but also by the cost impact of our growth ambitions. This includes the ramp up of Nevada, our new biorefinery, but also an impact from South Bend ethanol. And just as a reminder, we acquired South Bend ethanol in May this year, And since then, we're taking optimization measures there, which also means we cannot run it at full production capacity at all times. Furthermore, we did have some inventory valuation adjustments in the segment, and we will talk about this in a bit. But let's go into more detail in the biodiesel segment. So as already mentioned, due to the low comparability, Comparability, we focus on the sequential performance here. And quarter over quarter, we have seen a strong increase in sales of more than 20%, as you can see here in the light green bar in the chart. We actually arrived at a sales figure of 323 million. And this was mostly driven by the improvement in biodiesel prices. But also we managed to increase our production to 161,000 tons per quarter, which is a new record production volume. So this covered with our purchasing policy of purchasing our feedstock two to three months in advance. led to a very good EBITDA of 45 million, which is actually a positive EBITDA swing of 55 million quarter over quarter. Just as a reminder, if there's anyone new on the call, last quarter, our EBITDA was impacted by biodiesel imports from China, which are actually a fraudulent industry. which is actually a fraudulent product and which pressured the biodiesel prices much lower. And in a declining market, we of course have a disadvantage due to our purchasing policy of buying two to three months in advance. So the question is, what's new with the Chinese biodiesel? As you can see here in the chart, the biodiesel exports from China have actually declined quite a bit. 40,000 tons month over month, and that is actually half the volumes that we've seen in January. So it's really coming down strongly since the EU investigation started in mid-August. Further, we would expect this decline to continue going forward, and hence the pressure of the biodiesel prices should not come back. But let me come to the biodiesel market in general. So here in the chart, you can see that with the imports from China coming down, the spreads have been increasing throughout the quarter. That's reflected by the green line. And spreads in general are biodiesel prices minus rapeseed oil prices, just if anyone is in the way of the term. And here, like I said, you can see that it's increasing throughout the quarter, so from July to September. And if you compare to our last quarter, which is the gray line from April to June, you can see that it's quite strongly above that line there. However, now if we compare to the last year, you can also see that the market spreads last year in the first quarter were very, very high, which we even managed to surpass due to our really good feedstock position at that time. If we now look at the drivers of spread, so that would be, like I said, the biodiesel prices and the rapeseed oil prices, we can see that biodiesel prices primarily have come up quite strongly, but also rapeseed oil prices have decreased over the first quarter. But now let me hand back to Klaus, who will lead you through the bioethanol segment.

So thank you, Alina. So as the biodiesel results show already, we are coming back to normal conditions, or let's say less exciting. Now let's have a look on ethanol. So the volumes, and I mentioned it already, went up by 12%. Half of this increase is coming from our deep bottlenecking and investment strategy in Germany, and the other half approximately is coming from the new capacities in South Bank. However, sales came down due to lower ethanol prices and on additional quota sales. This had a negative impact on our earning quarter to quarter. As Alina mentioned it already, we had additional costs due to the ramp up of our growth project in Nevada. We are right now in the commissioning phase. And secondly, the optimization process in South Bend South Bend, as you know, is a traditional ethanol plant, but we are implementing right now there our technologies. So we don't have a stable production the last month. From time to time we had to stop. And yeah, even to the very favorable margin conditions in the United States. But anyway, we have to start to implement our technologies in South Bend as well. What I also want to mention here is that we are going to start the investment, so to build up there our biomethane technology in South Bend. We are going to start with the investment this fall. So at the moment we are waiting for the permission. Quota prices had an adverse impact on our EBITDA through inventory valuation adjustments. Alina mentioned it already. But this is only part of our production that was impacted. In total, these special effects have a lower double-digit million amount. So what about the margin in ethanol? So we have here on that chart the development, the margins or the spread in 2022 to 2023. And you see a very big volatility there. In November, December, we were even negative. So also here we are coming more to, let's say, a normal business. The margins were quite reasonable in this quarter, but as I mentioned, due to the effect with commissioning and with improving the technology in South Bend, we have their costs. So for the actual situation, we are talking about 200, 250 euro spread. which is quite a reasonable margin. So if on the other side, ethanol prices came down, but recovered from November, December last year. And what you have here on that chart is due to the decrease in ethanol prices, also the grain prices came down significant. You know that we are able and flexible to use always the cheapest grain. But as an example here, we show you that even the margin between wheat and ethanol and wheat at the moment is not the cheapest. grain, but even there we have a reasonable margin. Now let's come to the quota prices. There we saw a significant decrease from approximately 500 euro per ton of CO2 savings in the last year to 120, 140 at the moment. And what I want to mention here is that the biodiesel imports from China are not only impacting the biodiesel segment, they are impacting the whole biofuel segment. And the quota price is just a mirror of the differential between biodiesel and diesel. So here you can see significant increase, but what we see that there is a big bid ask spread at the moment for the greenhouse gas reduction and only negligible volumes are changing hands at the moment. What you also have to know regarding the actual situation and this we see every year that right now we are negotiating our new contracts for 2024, and for sure, especially the oil companies are interested in their negotiation to have the level down. So, parts of Verveo's greenhouse gas reduction are locked in at attractive prices until the end of 2024. And as I said, right now we are negotiating the contract for the next year. Next slide. Our guidance is still the same. We have Our EBITDA we expect in the range of 200 to 250 million and for the end of the business year our net cash will be between minus 110 and minus 150 million euro. So despite decline in quota prices we keep our guidance unchanged and even this fact is due to some reasons that for the first quarter, as I said, we are perfectly in line with the guidance. We are even ahead of our planning, what we expected. And while we expect a further impact from valuation adjustment for the second quarter, We should also see a better performance from ethanol. The ethanol curve is at the moment, the price curve, very much backwardated. But on these prices at the moment, any arbitrage from any destination remains closed. The ethanol demand all over Europe is increasing there are no additional european capacities under construction so the question is where the ethanol the additional demand should come from it must come from imports and therefore we are quite sure that the actual price level will stay stable or me personally, I see even an increase in prices just to open the arbitrage from the US and from Brazil. So what are the current topics? What are we concentrating on? First of all, the most important part is at the moment the commissioning of our Nevada plant in Iowa. So we produced already small amounts in q2 2023 2024 but more significant volumes will come in spring ethanol and also gas from stillage then the construction activities are progressing construction activities in germany where we are going to start this fall with our ethanolysis project to produce chemicals from our rapeseed methyl aster. And finally, as I mentioned already, that we are going to start construction in fall at South Bend to do the foundation for the first digesters. And on the LNG, CNG side, we are operating right now nine filling stations all over Germany and five more are expected to come until the end of 2023. Finally, I also want to mention positive very positive development in the US. The renewable natural gas, what we are already producing in Nevada, based on corn stover, which is a cellulosic biofuel. The EPA, the Environmental Protection Agency, increased the target for cellulosic biofuel significantly for 2023 and 2024. And that is increasing demand for these RINs and also for our molecules, and that was resulting in a 70% increase for the D3 price since June. A second effect is that the voluntary market, so demand for renewable natural gas, especially from spillage, which is the cheapest renewable natural gas in the United States. So the demand from the voluntary market is significantly increasing. And our plan is clearly, once Nevada is operational, to canalize significant amounts of our RNG production in Nevada to these so-called voluntary markets. That is our clear target. And the advantage, the prices are very attractive. They are about double the price what we can achieve in the transport sector, in the transport sector in the US. But our intention is to get out of this dependency fully related to the development of the biofuel segment in the United States. So I think that is it. Alina, did I forgot something?

No, I think we can start a Q&A.

Okay, then let's start with the Q&A.

Thank you, Klaus. Thank you, Alina, for your presentation. So we will now move on, as said, to the Q&A session. Dear ladies and gentlemen, kindly note that it is highly appreciated to ask your questions in person via audio. To do so, please click on the virtual raise your hand button. If you have dialed in by phone, please use the key combination star key nine followed by star key six. And if you're not able to speak freely today, just place your questions in our chat box. So we already received the first questions from Mr. Becker. Please go ahead. You can unmute yourself now.

Good afternoon, Mr. Sauter and Alina. A couple of questions from my side. Firstly, on your term contracts for 2024, I understand your negotiations are usually finalized by late November. So could you please provide more color on how the negotiations are going so far and also give a rough estimate of how much of your 2024 volumes you have contracted at this point?

Thank you. That is a good idea, question by question. Okay. About 50% of our volume we placed already. So, you know, the negotiations is mainly due to the volume and let's say some side effects. We are not fixing prices. The prices are related to the indices. So this is for biodiesel and ethanol, and prices are floating due to the market. On the quotas, in the past, we sold the quotas in addition to the need of greenhouse gas savings the different companies need. And this is, let's say, a little bit of a tricky discussion at the moment. What will happen with the Chinese imports? Because the oil industry is sitting on about three and a half, four million tons of CO2 savings, which is about 25% of the demand, what they need in 2024. So the question is, what will be the reaction from the European Commission on the Chinese imports? If there is really a fraud, and I think the decline in imports show that not everything was fine there. I don't want to say that all the imports were fraud, but at least why are 50% away if everything is fine? So the question is how it will continue. Will there be a real ban on Chinese imports because there was circumvention for Malaysian production? This we know already. So will there be a complete block or will there be a continuous flow? Because what you have to know is the quota in 2024 will increase by 1%. 1% means additional 1.5 million tons. And this is the effect what is going to happen on the quota prices. So if there is less flow from China, there will be less supply for biofuel to Europe, to Germany. The product mainly came to Germany because of the attractive double counting. Less supply And on the other side, a higher demand due to the higher quota. And what you also have to know, 2025 will be the first year when the quota will increase by 2%. So another 3 million tons of CO2 savings. As a result of that market distortion from the Chinese import and the decrease in CO2 prices, a lot of planned projects in Europe are stopped. So what we expect is a relatively fast recovery in the CO2 pricing, and we don't see much supply. We don't expect that Chinese imports will be stopped completely. So for the quota right now, we are not selling it on fixed prices. For some customers, we leave it just open and say, okay, let's see what is going to happen and what will be the pricing during 2024. But what I also mentioned in my presentation is that the liquidity in quota is not so big so because of this we have that big bit ask so the prices at the moment is between 110 and 150 euro per ton of co2 savings which is huge and the volumes are very small so that is the strategy for 2024 we expect further recovery in pricing for biodiesel for ethanol as i mentioned And quota, we are not selling on fixed prices due to that quotation, what we have in the moment for 2024.

That's very clear. Maybe just one question related to that. Could you confirm whether you have sold any quotas at the recent price levels or not? No. Okay, that's clear. And then just one question on your adjustments in the bioethanol segment. Could you provide some information on the split between the impacts from the ramp-up costs and the revaluation of your greenhouse gas quotas?

I could, but I don't want. Due to our negotiations on the contract, I don't want to disclose where is the level where it hurts us.

All right, understood. And maybe just one follow up on that one. What can we expect for the second quarter in terms of revaluation impact?

Well, it depends now how the pricing will continue and what, you know, we have on the one hand side, we have that rotation. And on the other side, we have our real business. So we were selling quotas a little bit, but not on these prices. So in our Q4 planning, Q2 planning, we expect some impact, but not very much on our actual quotas. But overall, In the second quarter, we expect better results like in the first quarter. Even with this adjustment on inventory.

So you expect underlying profit to be better than in Q1, excluding the adjustments, correct? Including the adjustments. All right, that's very clear. I'll go back into the queue. Thank you.

Thank you very much, Mr. Becker. We will move on with the questions of Mr. Peer. Please go ahead.

Yes, hi. Can you hear me?

We hear you very well.

Okay, perfect. Thanks for having me. So, first of all, a bit of housekeeping on the quarter. Obviously, you had a very strong development on the biodiesel side. Is it correct to assume that not only higher prices, but also an increase in the merchant volumes did help on this one?

Sorry, impact on merchant volumes?

Yeah, on this volume.

Trading volume. No, it was due to the higher biodiesel prices.

Yeah. Okay. So that didn't increase, actually. But you obviously had some volumes there. Would you disclose how much that actually was? I don't know. Alina, you know?

Yeah, it was stable quarter of a quarter. So I think it was less than 10% of the production volumes.

Yes, about 5,000, 6,000, 7,000 tons, not more. So on a monthly basis, 50,000 is our capacity. Yeah, about 10%.

Yeah, makes sense. And then how was it in this quarter with respect to storing methane in the network? Or where do we stand in terms of stored gigawatt hours in your network at the moment?

I think we're around 860 gigawatt hours, but I honestly would have to check that number again. I will come back to you on that.

Yeah, that would be fine. OK. And you answered already quite some questions on the quota. But, yeah, I mean, coming back to the guidance, obviously, I recall that last time we discussed also the lower end of your guidance and the upper end. I mean, now you're saying, obviously, that you're not selling quota next year on fixed price but rather floating. I mean, there might be some fluctuations here and there. Well, first of all, I would say due to the – very good spreads both on ethanol and on biodiesel as you rightfully said uh you will have it with q2 so tick the box here um hopefully also spilling over a little bit into um into early next year but um is it the levels that you are looking at in terms of the quota price i think last time we discussed something like 250 uh rather being let's say the eligible amount for the upper end Is that still something you would confirm? And let's say if the quota price stays, unfortunately, then at a very low level of whatever 140 you mentioned, should we then think of, you know, maybe you're reaching rather the lower end?

Yeah. Well, that was my personal expectation that I see the prices during 2024, 250. But in our planning, the prices is much lower. So it's not 200. Our planning is not based on 250. Okay. Okay. It's not based on 250. But I don't see the quota below 200. You know what I want to say?

Yes, I can imagine. And then another question, since you're still showing this chart here on cellulosic RIN prices. You have said that, I mean, obviously prices for RIN D5 are not very good at the moment, but at the same time, you said that the voluntary market offers quite interesting conditions. I mean, If that is the case, why shouldn't there be arbitrage between the voluntary market and Rendi FIFO transport? So just volumes not going into transport, actually, but into the voluntary market then and doing the arbitrage?

Okay, this is... What kind of arbitrage you mean? You know, a spillage gas doesn't fulfill the requirements for a D3. A D3 is defined as cellulotic biofuel, and cellulotic biofuel means 75% of the feedstock must be at least cellulose, hemicellulose, or lignin. And this requirement we don't fulfill for the spillage. The spillage is mainly protein. Remember, the cannibals. Okay, but to answer your question, what is the logic behind? The voluntary market, you know, at least the voluntary market is not a voluntary market. There is always some logic behind. Nobody will buy methane, which is the same molecule like fracking gas in the United States, for eight or 10 times the price. There must be a logic behind. But this logic is not an obligatory market like the transport market. So the question is, what is the cheapest renewable methane in the market? Right now, everything which is methane in the US market, which goes to transport, is a d3 so if you want to have renewable natural gas for other applications the price for the methane will follow the the line of a d3 for sure you have to give a discount but it is following so irrespective of that is from stillage or from corn stover you mean yes they don't care this voluntary market you know for the transport sector you have you need a d3 everybody who is selling gas oil and gasoline needs a d3 and there it is clear it must be 75 cellulose or it must be manure or it must be landfill and all this kind this is this is how renewable natural gas is in the US market. And all of it is a D3. So now we are the first producer of a D5 renewable natural gas, which for sure we can produce much cheaper than the cellulosic RNG, because there we have to collect the corn stover, it's a lot of logistics, it's a lot of storage. Okay? So that is and this is really a significant development. And because of this, I'm emphasizing it so much. So at the moment, all eyes are on Nevada to commission the plant. Once we have commissioned and we know that we have a stable production, we can start to sign the first contract for voluntary markets.

Yeah, it's just the question was coming from, because I was, maybe I'm mixing things up, sorry for that, if that's the case. But actually the point was that I saw a RIN D5 price actually coming off quite substantially in the US. And so that was the reason why I was asking about it. So if someone had, yeah, go ahead.

But you know, the point is, what is a D5? A D5 can be anything which is not corn ethanol. So mainly the D5 is Brazilian ethanol, sugarcane ethanol, which are better CI. That is mainly the D5. So if we go to transport, we have to compete with sugarcane ethanol from Brazil. But when I'm talking about the voluntary market, then these are specific clients which are looking for a methane molecule. They want to have CH4. So if we would go to transport with our methane, yes, it is a D5. But if we are going to the voluntary market, to everybody who is interested in cheap hydrogen. You know, it is not like in Europe where the hydrogen must be from electrolyzers. The US market is more open, so there the market, if somebody is looking for renewable hydrogen, it can also be from renewable natural gas. And therefore, the D5 is not interesting. The question is, what is the cheapest renewable natural gas in the US market? And this is our molecule because we can give a discount on a D3. We will see how much discount we have to give. But anyway, it will be much more than a D5. Yeah, that's for sure. Okay. Okay? Right. Thank you. Very interesting development in the US, I can tell you. Maybe something what I also want to mention, you were asking about our trading activities. know in biodiesel how much we said less than 10 so we are working on increasing it but it may i think it will start to have higher amounts higher volumes in 2024 but that it is really significant, will start in the next business year. So 2024, 2025. But we are working on it. It is not that we skipped this theme. No, no, no, no. We are working on it. But right now we are not there. We have to implement all the logistics. We need tanks. We need the right people to move it. Transport capacities, everything like this. So it will become bigger. Okay.

All right. Thanks, Mrs. Otto.

Thank you.

Thank you so much for the questions. In the meanwhile, just a short reminder, if there are still open topics you would like to discuss, just raise up your virtual hand or place your question in our chat. And in the meantime, I just have a question. What production capacities will you achieve in the midterm for biodiesel, bioethanol and biomethane?

Sorry, what was the question? What amount of capacities we are achieving?

What production capacities will you achieve in the mid-term for biodiesel, bioethanol and biometh?

Well, for biodiesel, we have 710,000 tons of capacity in Germany and in Canada. And right now we are not planning to increase this capacity. For ethanol, we are going to 300,000 tons in Germany. We have already with the South Bend plant, which is a plant which is producing, I think it's 250,000 or 300,000. 250,000 tons. yearly capacity and with our additional plant in Nevada in Iowa what we are going to starting up is another 120 or 180 180 000 tons of ethanol so all together we will go to 300

I think, maybe, I honestly, I don't have the numbers in my head right now either, but we just released on the Capital Markets Day presentation with our mid-term expectations, where our capacities will be at, and also in the short term, how we plan to ramp it up, including these projects that Klaus just mentioned. So we could, maybe it's better if you just look at our website in the presentation and all the ramp-ups are included there.

Yes. And finally, it is about 800,000 tons, which is now on the

For ethanol, yes.

Yes, for ethanol. And for renewable natural gas, we are going to 2 terawatt hours.

Yes.

So right now we are approximately 1 terawatt hour. So we are heading into 2 terawatt hours. And that is the plan until 2026, 2027. But that is the status quo today. So I think once we made the proof of concept in Iowa, we will have a look what are the possibilities to increase the market. Maybe at that topic, our technology, maybe it's not so clear for everybody, the fact that we are combining ethanol and renewable natural gas is similar with with the implementation of a turbo engine in the formula one so before there were the goddess and suddenly somebody came with a turbo so we have to bring the proof of concept but this is really the difference that having the ability to make from corn, ethanol and renewable natural gas is changing the economics completely. Nobody is able really to beat us in the US market with this combination. For sure, once we showed it, other producers will follow to try to copy that technology to be able also to build on turbo engine. But this is how to say, once we have the proof of concept, we have to speed up really to implement it more in the US market. Okay, another question.

Great, thank you so much. Yeah, we received another question in the chat box from Mrs. Steger-Tietgill. What is the current contract structure in the voluntary markets in the US? Are these long-term off-take arrangements at fixed prices?

There is a lot of interest, I mentioned it, and everything is possible. So even the fact to make some long-term contract, but the question is what we mean with long-term contracts. We think that three to five years of take agreements might be possible. But I think also the ability to sell bigger amounts on the long-term contracts on a variable price based on what we see here, the D3. You see also here how volatile the market is in June. A D3 RIN was at $2 per RIN, which is 22.4 kilowatt hours. And right now we are talking about $3.50. So it might be possible to make a long-term agreement. I don't know if we really want this, but that is something which is on the table. And the interest is big.

Great. Thank you, Mr. Sauter. And we have a follow-up question from Mr. Peel. Please go ahead.

Yes. Thanks for having me again. Actually, two questions. Well, first of all, Just to come back to the performance of the bioethanol segment, obviously you mentioned the three input factors that caused the low EBTA in Q1. Given what you said, so how should we think of it as, let's say, kind of a clean performance on the EBTA side of the segment, rather somewhere in the ballpark range then of 20 million? actually a starting point for how we should model the next quarter. And the second question is just on the IRA. I mean, obviously we heard a couple of news on that in your slides on the Capital Markets Day and how you initially think of it. I was just wondering, is there some sort of update? Is there a little bit more clarity for you also on the obligation side that you have to fulfill

um anything that you could share would be would be helpful on this one thank you well okay second question first uh there are still no details uh from the us administration regarding the ira for new projects especially countervailing uh no not countervailing um you know about the wages all these prevailing wages. So there we have nothing, but you know, our project in Nevada started before the implementation of the IRA. So we don't have to fulfill there any requirements. So once we finished, we are able to get the 30 minimum, the 30% on the IRA. Um, The details for the IRA are now more interesting for South Bend. And right now, as I said, we don't have the details. We don't know. At the moment, we try to fulfill the requirements, what we know. But anyway, let's see what's coming there. Nothing new. For your first question, this is, as I said before, I don't want to give here more details on the ethanol side. I know that this is not zufriedenstellend, but due to the fact that we are in the negotiations with the oil companies and that we don't want to disclose too much, please accept that I don't give you here more meat to the bone. Please. All right.

Thanks.

Thank you very much. As it seems, there are no further questions. We therefore just go back. We have another question from Mr. Becker. Let's hear what your questions are.

Yeah, one question on your LNG question. gas filling station network in Germany. You initially have communicated that you were supposed to build some 20 gas stations by year end of this year. Could you maybe just briefly outline what has changed and why you're only going for 14 now? And are you still going for the remaining six in the next year? Thanks.

Yes, we are still going. The plan hasn't changed. Maybe we are making even more. The plan hasn't changed. Why we have the delay? Yeah. Like anybody else, distortions in the supply chain, still there is a shortage in compressors and stuff like this. Everything is still related.

And government approvals. Sorry to jump in. But we need a government approval for each gas station, and that has been one of the biggest issues there as well.

Okay, okay, okay. Yeah. Okay, maybe just one question related to that. Could you provide a split of how much of your RNG in Germany you are currently selling downstream, i.e. via your gas filling station network, and how much you are still selling via third party?

Difficult. I would say at the moment, 25% goes through our own filling station, or 20% goes through our own filling station, and the rest goes to third-party filling stations. But, you know, we don't need to bring our own production immediately to the filling station. We have two possibilities. We can store the gas in the grids So there we are at 850 gigawatt hours right now. And once we sell it through the filling stations, we create the CO2 savings. So after the bankruptcy of BMP, let's say the condition for selling CNG through third party filling station became a little bit more reasonable again. So also these contracts we are negotiating new for the next year. And then let's see what is coming out. But we didn't sell significant amount through third parties. It was something about 150 or 200 gigawatt hours of our production. I think that is a better figure. And now let's see what is the situation for next year. BMP was a big player and they are away. As I said, the conditions are now more reasonable again, but our clear target is to sell as much as the molecules downstream via our own LNG, LCNG filling station network. There we have the whole margin.

Okay, thanks.

Thank you, Mr. Becker. And now we have another question from Mr. Pelligan.

Yeah, all good things come in thrice, obviously. So, actually, a question. Your friendly competitor has recently announced that it has built a filling station for E20, I think, in Mannheim. Yeah, yeah, yeah. And I was actually thinking about, obviously, they are also maybe supporting you then at the end, if that's profoundly... prevails. So just would love to hear your thoughts on that. I mean, from, you know, feasibility, technical issues, whatever. But I guess this is something you would, in principle, welcome if that finally goes through, right?

Well, look, with E10, we are still at 25% in Germany.

That's very low.

There is 75% Luft nach oben. In France, we are already at 55%. So in France, the French oil companies, mainly Total, is using this possibility to increase more E10 to fulfill their target. But you see, there is still a possibility to do it with traditional ethanol, with traditional biodiesel. So right now, I don't see any sense to go now in e20 i like very much what our friendly competitor was doing there but it is more like a marketing uh uh let's say uh yeah yes so i like it because you know it's no problem to go with e20 but really as a business strategy we are not spending time for this But I like it and I highly appreciate that. Chapeau, very good. Possibility to get visibility, but that will be one filling station and I don't know if anybody as an external will fill up the car with E20 because it's not approved from the car producers. E10 is everywhere approved, and people are still scared to fuel it because they are afraid that there might be something with their car all right thanks

So, and we have another question in the chat box. They can lean something about the prices achieved for the THG quotas that you have sold by the 2024 deadline. What do you think the fair market price should be in 2024, 2025?

That is a good question. I think to achieve the ambitious German greenhouse gas reduction targets, we need additional investment. And these additional investments to build up capacity in Europe will... And I'm talking about real greenhouse gas savings, not buying Palm oil in Indonesia, bring it to a storage in Hainan, change the ticket and then bring it to Europe. This is not what I'm talking. I'm talking about real. You need a pricing around 250 euro per ton of CO2 savings. Under this price, no new capacity will come on screen. So that is my assumption. that the price minimum will be at 250, and if the demand with the higher quotas will grow faster than the supply, because now we are lagging in investments, I also see the possibility that we are going on to 350 and 400 euro per ton of CO2 savings, but that will be some short term. I don't say that we will never see again 400 or 500, but the long-term commodity price is somewhere in that range of 250 to 300.

All right, thank you so much. And another question in our chat box is, are there any updates on LATAM, especially on Brazil?

No, right now there are no updates, nothing what can be disclosed, but we are in constructive discussions with big players in Latin.

All right. And then can you please give more information about the government investigation into Chinese certificates? What do you expect some results to be published?

I have no insight, no inside information. I know just that the investigation is going on. Something was found. And I think it has to go on. And finally, I would be also interested now, the volumes went down, companies disappeared, So I think it's quite obvious that there was some fraud. And I would like, and this is interesting for me, I would like to know if the European Commission is really retroactively cancelling CO2 savings, which were not achieved, if they are really going that way, or if they just stop here and say, okay, now we... change the rules, we will implement stricter regulation and certification. That is something that is interesting. I think the effect, and that was what we wanted to achieve mainly with the noise we were making. that the volumes go down to a reasonable level, and this is the level in 2021, even not 2022, because in 2022 also palm oil was coming through China to Europe. Since January 2023, palm oil is out in Germany completely. So I even see it under the level from 2021. And right now I think that is some success. But the more interesting question for me is what is with the fake greenhouse gas savings from these parties, which were identified to be fraudulent?

Thank you. And Mr. Lilleman would like to know if you could please explain a little bit more detailed which company went bankrupt and the system was selling quarters.

There were some companies collecting greenhouse gas savings from electricity. I think one or two went bankrupt. And the biggest player in the biogas segment was BNP. And BNP was a daughter company from ENBB. That was also in the newspaper. Something was written there that we are talking about the bankruptcy in the level 500 to 750 million euro. So quite significant. And they were one of the biggest players in the biogas segment.

All right. Thank you so much. I was not sure. So there was a short raised up hand from Mr. Morse, but now it's gone. So with this, I would say we would come to the end of today's earnings call. Thank you, everyone, for joining, listening. And for your shown interest. And as well, a big thank you to Mr. Sauter and Mrs. Köhler for the presentation and the time you took to answer all these questions. Should further questions arise at a later time, please do not hesitate to contact Investor Relations or us. So, and with this, I say goodbye. Thank you. And a handover again to Mr. Sauter for some final remarks.

Okay. Thank you very much. Thank you very much to all the participants. It was a pleasure to talk with you today. I think we are in very interesting times. More normal times than the years before. Anyway, I'm very positive. The demand in green molecules everywhere is increasing. I am thrilled about the development in the United States, even if not everything is gold there, what glints. So it's also hard there to find the right people, to find the right skills. But the market is huge, very professional. Yeah. Not very much regulatory. influence. The US is defining the target and the company who has the most efficient solution is winning the race. So for me, the most interesting and thrilling event this year is the startup of Nevada. Once we accomplish this, we have the proof of concept. And yeah, I think the decision proverbial to concentrate on the US market long time before the IRA was a right decision. Anyway, it's still a way to go to find the right people, to find the right skills, the know-how, but the potential growth in the United States is great. Anyway, also Brazil, it was mentioned here, or Latin America, also very good um conditions a lot of biomass cheap biomass available so i think when i look back to the last 20 years of verbio especially the last 18 to 20 months a lot of things have changed the demand for green molecules in a lot of different segments not only in transport is increasing so i think we are not anymore in a niche The green molecules are becoming adult and we are talking about the global business with a global commodity business and we are right positioned as Verveo there. And I think we are far ahead of anybody else who was in this segment. So I think you made the right decision to be invested in Verveo. Thank you very much. Have a nice day and I'm looking forward to our Q2, but even more to our Q3 conference call. Thank you very much. Have a nice day and stay healthy.

Thank you also from my side.