Verbio Se

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of the Verve U.S.E. following the publication of the half-year and second quarter figures of the financial year 2025-2026. The CEO, Klaus Sautter, as well as CFO, Olaf Tröber, will speak in a moment and guide us through the presentation and the results. And after the presentation, we'll move on to a Q&A session, which we will be happy to take your questions. And having said this, Mr. Sautter, the stage is yours.

Thank you very much, Sarah. Good afternoon, everyone, and thanks for joining our half-year and second quarter 2025-2026 earnings call. Building on the momentum from the first quarter, we delivered a strong first half of the year. Even though we had to work through quite a bit of regulatory noise, the underlying tailwinds are clearly moving in our favor. We are heading in a very positive direction and we'll keep doing the work that positions us well for what is ahead. As always, We will walk you through the regulatory developments and what they mean for us later in the call. Given VIRBIO's solid results in the first six months, we are now expecting our full-year EPTA to come in at the upper end of our prior guidance range, which was indicated to be at a high double-digit Euro million level. With that, I'll hand it over to Olaf to review the financial and operational results. Olaf, the floor is yours.

Well, thanks Klaus and good afternoon everyone. As you can see in the chart on the left, our biodiesel output was slightly below the level of the same period last year. With 311,000 tons in the first half of 2526. In Europe. Well, we once again reached a record production volume. which highlights the strong operational stability of our plants. In Canada, we shook production towards the end of the reporting period as planned for the winter. This was a pure commercial decision. Regulatory changes in the US and the protective measures in Canada in response have shifted the seasonal cash flow profile of the plant. Overall, we still expect good full year results, but during the winter months, we will most likely not produce. Ethanol and Biomethane production also increased year over year to 307 000 tons and 672 gigawatt hours respectively. The increase in production came from the ramp up of our bioethanol biomethane plant in Nevada and also better uptime at the ethanol plant in South Bend. That more than made up for the lower volumes in Europe due to maintenance. And despite the extreme weather conditions in Iowa, our Nevada plant hit a new production record in December, which was great to see. With overall higher production and sales volumes, Verbu was also able to increase its revenue. This was supported by a renewed rise in demand for greenhouse gas quotas, both in terms of volume and price. Auto material costs were also above the level of the same period last year. Their increase was disproportionately lower compared to revenue growth. And this in turn means that our EBITDA increased mostly thanks to a higher cross margin. Lower operating costs, first. Higher auto operating income and gains from commodity forward transactions. also contributed to the increase in EBITDA. And therefore, on a year-over-year basis, we still felt the impact of lower greenhouse gas premiums in our yearly term contracts, which expired end of December last year. But this was more than offset by the recovery in the sport greenhouse gas market prices. And thanks to the improved operating dynamics, supported by more attractive market conditions, we saw a year-to-date operating cash swing of Euro 21.7 million, bringing operating cash flow to Euro 35.6 million. Meanwhile, CapEx amounted to Euro 47.8 million, resulting in an increase in net debt to Euro 173 million. And we had already flagged that net debt would increase over the course of the year due to our strategic investments. But compared to Q1, net debt already came down substantially from its peak as we have hit the turning point and delivered a positive free cash flow in Q2. Investments itself, they are directed towards the speciality chemical units here in Bitterfeld as well as into the production plant in South Bend in Indiana in the United States. The equity ratio remained at 58.2% and hence at a comfortable level. And now we can head, let's take a closer look at the quarterly. performance our group fda increased both year over year and quarter over quarter to euro 30.1 million from euro 20.8 million in q2 last year and euro 15.4 million in the previous quarter with this We are finally back in the black also at the earnings per share level. As depicted on this slide, the bioethanol biomethane segment was the main driver behind this movement. Thanks to the stabilization of the greenhouse gas quota market and the attractive ethanol spreads in Europe. Merpi was able to report a positive segment EBITDA in the second quarter of 2025-2026 for the first time. The first time in five quarters coming in at Euro 5.8 million. Year over year the capacity ramp up in North America also helped. Now let me Give you a bit more color on the segment performance. Here we are focusing on quarter over quarter changes rather than year over year. In the biodiesel segment, production in Europe reached record levels in the second quarter of 25-26. And in Canada, as I have outlined before, volumes were deliberately scaled back during the reporting period due to changes in the regulatory environment in North America. As a quick refresher, last year's change from the blenders tax credit to a production tax credit in the US. Along with the lack of guidance has caused many producers to scale back biodiesel production across North America. And such uncertainty has made it harder to run at full rates during the summer. we have resumed production thanks to good demand in Canada and our prime location there. In Gewinde, however, biodiesel use in Canada is very limited, so production naturally comes down. Importantly, with some form of production tax credit in place and solid summer demand further supported by domestic blending requirements, We assume summer margins should be strong enough to make the overall year attractive despite this seasonal slowdown. Now, taking together these developments led to a lower overall production compared to the prior quarter. We produced 144,000 tons versus 167,000 tons in Q1. And due to this revenue also decreased in the second quarter of 2526. It generated Euro 223.8 million compared with Euro 244.1 million in the previous quarter. As can seen from the chart on the left. But still, our EBITDA in the segment increased to EUR 24.1 million, and this is thanks to higher selling prices in Euro, compared with only a moderate raise in material costs. For some market context now, let's take a look at the reference charts. I think most of you are familiar with these charts already, but I will still go into the details. These charts illustrate how biodiesel spreads have developed by spread itself. We mean the difference between the biodiesel price and the rapeseed oil price. While the charts actually don't capture our specific sourcing strategy, they still give you a useful snapshot of the broader market trends. And to remind you, we typically buy our rapeseed oil two to three months in advance. Yeah, that's actually the difference. So now with respect to the spreads towards the end of the year, You can see the spread picking up, but came back again a bit in the last few weeks. And after the cabinet decision on the 10th of, yeah, it was the 10th of December 25, confirmed that a double counting would end going forward. Market players actually used the remaining window to increase the share of a trans-biodiesel still eligible for double counting. And this in turn actually required more rapeseed oil-based biodiesel or R&E or rape oil material ester. because advanced biodiesel itself has weaker cold flow properties and therefore needs RME to meet winter great specs. But the seasonal push supported RME margins while rapeseed oil prices came off slightly. Moving on to the bioethanol and biomethane segment. We recorded an increase in revenues to Euro 228 million, which is actually again a new quarterly record. Revenues are shown by the green bar on the left-hand side of the left chart. The main drivers were the recovery of the greenhouse gas quota market, higher sales volume in bioethanol and biomethane, and increased selling prices in Europe. Lower selling prices in North America had an offsetting effect. Meanwhile, bioethanol and biomethane production volumes were roughly flat compared with the previous quarter, mainly due to maintenance work in Europe, not US, to be clear, in Europe. Overall, bioethanol utilization stood at 76.6% and biomethane utilization at 67.9%. Thanks to the stabilization of the greenhouse gas quota market and improvement in ethanol spreads in Europe, we were able to report an EBITDA increase of €15.4 million in the second quarter of 2025-2026 compared with the previous quarter. And just as we discussed in our previous call, the margins between ethanol prices and feedstock costs had widened just for a few weeks at the beginning of the quarter. And here again, next slide, also take a look at the reference graphs. They show how ethanol market spreads have developed over time. As with biodiesel, they don't reflect our exact purchasing of feedstock strategy. They don't reflect our purchasing feedstock strategy, but they do give a good indication of the broader market environment. On the slide, we use wheat. as the reference feedstock, but production wise. We also can use corn, rye or triticale. Essentially anything that's cost competitive or offers better CI values. Now looking at the price chart on the right. Ethanol prices increased towards the end of the first quarter. and into the beginning of the second. While wheat prices is slightly thanks to its strong harvest in October and November spot ethanol prices traded above 1,000 euros per ton reflecting some short term imbalances, but also support from tight supply due to maintenance at European plants, steady demand and lower import volumes. And as you might recall, the discussions we had in Q1 regarding future margin spread development. Looking back, I believe sticking with a conservative margin spread approach turned out to be smart. Now looking ahead to 26, ethanol fundamentals remain positive and margins have increased in recent weeks. Additional support comes from the ID3 transposition in the Netherlands, which now restricts the use of denatured ethanol. So good feedstock availability in countries such as France also supports production. Now moving from Europe to the US. In the US, ethanol margins were strong in late summer, helped by low inventories, lower production and solid export demand. As you move into the fall and our Q2, margins came down a bit, which is actually normal for this season. But the margins were still higher than in 24, thanks to strong industry fundamentals. As a result, production was high for this time of the year. and inventories started to build up. Stocks are still below last year's levels and near the lower end of the usual seasonal range. Now, looking ahead, margins are supported by these tight inventories and the US corn crop, which is helping keep feedstock costs under control. And on the top of that, domestic blending demand is still healthy and ethanol exports as well. Which reached record levels last year and expected to grow again in 26. Now going back to Germany. Let's turn to the development of the greenhouse gas quota, which, as mentioned earlier, is a key earnings driver, both directly and indirectly, as it also reflects the overall health of the biofuel markets. Let me briefly explain why the greenhouse gas quota actually is for anyone who may be joining us for the first time. here in this call in Germany. The greenhouse gas quota system requires full suppliers in the truck. In Germany, the give me a second. In Germany, the greenhouse gas quota system requires full supplies in the transport sector to reduce the greenhouse gas emissions of the fuel they sell. And Germany is one of the largest biofuel markets in Europe, so this system has a big impact on the market. Fuel suppliers can meet their targets in two main ways. They can blend more renewable fuels into their products, or they can buy greenhouse gas reduction credits from low-carbon fuel producers like WorldFuel. So how does it work? In our case, we supply biomethane in the transport sector, thereby generating emission reductions that fuel suppliers then can use to meet their own legal obligations. And the price of the greenhouse gas quota is driven by supply and demand for these emission reductions. Sprout cases in the market artificially increased the supply of reductions in the past which caused prices actually to collapse. As a result, at the end of 24, a political decision was made here in Germany to suspend the use of surplus quotas in the obligation years 25 and 26 last year and this calendar year. The surplus filled up until the end of 24 will remain in place but they can only be used again starting in 27. And this initially pushed prices lower, but 25 prices began to recover as the market adjusted to the suspension. And now the transposition of the ID.3 into national law. provides an opportunity to implement tighter compliance rules and additional controls to prevent fraud going forward. Since the first draft was published at the end of June, a ministerial agreement has confirmed that double counting will be eliminated. And this is a positive development, especially combined with the restriction of trust protection. Klaus will explain the removal of the double counting and its impacts in a bit more detail later on. So that brings me to a recap of what has happened during the quarter under review. The cabinet finally adopted a draft in December 25. after several several delays that had waited on prices uh this had been a bit late then yeah this was actually a little bit later than we had initially hoped uh but overall the sector is finally moving under the right direction the Bundesrat has now already discussed the legislation and the final parliamentary debate in the Bundestag is scheduled for March this year. Once passed, the law is expected to enter into force retroactively from 1st of January 2026. 1st of January this year. Now with this, let me turn to our guidance. While the strong bioethanol market has worked in favor. Which allows us to specify our APTA guidance to the upper end of the previous expected range. The range, the previous range has been communicated to be in the high double digit million amount. And we expect a lot of questions regarding this. So to be clear, the guidance reflects the prudent expectations, our prudent expectations. The improved results and lower investments compared to the previous year are expected to lead to a moderate increase in free cash flow and reduction in net financial debt year over year. CAPEX continues to be under tight control, as we have again demonstrated this quarter. A key part of our CAPEX right now is the construction of our Aeternalysis plant in our Bitterfeld site. We are fully on track. starting in the second half of 26, we will produce the first renewable molecules for the chemical industry. So we are fully on track with our construction here in Bitterfeld. These speciality chemicals are essentially building blocks for detergents, cleaning products, high performance lubricants and plastics. And with this project, we are helping drive the shift from fossil-based to renewable raw materials in the chemical sector. And now, I will hand back to Klaus, who will provide further insights into the regulatory environment and our broader outlook. Thanks, Klaus. Go ahead.

Thank you, Ola. So now about the drivers. We've talked a lot about the end of double counting and it was important, very important, but we want to explain you what does it finally mean and what is the effect? Because some people were asking us Is this not negative for Verveo? So we have conventional biofuels and we have advanced fuels. And we all know that most of these advanced fuels were not advanced fuels. These were conventional fuels with a different passport. pre-2026, so in 2025, the price per ton of CO2 saving, the price was around 200 euros. So for our conventional fuel, for one ton of CO2 saving, we got 200 euros. Now with the new legislation coming, prices doubled, went up to 400 euro. So CO2 savings coming from conventional fuels will now create the double price. And finally, that is 70, 80% of our production. So that was the most important part for us because we were suffering under that drought because We must be honest, the fraud will continue, at least at the beginning. So for the advanced fuels, advanced fuels are creating more CO2 savings because of double counting. But it didn't or it doesn't mean that they are just getting double price, it was even more. If we are producing biodiesel from rapeseed oil, one ton of biodiesel is creating two tons of CO2 savings. If we are making biodiesel from an residue, an advanced biofuel, this biofuel was creating, in 2025, five tons of CO2 savings. So that is important that this is over because finally that was the economic driver. The idea to give a better greenhouse gas savings with double counting to advance biofuel was at least at the very beginning a good idea to improve and increase the volumes, but finally it didn't work. and I don't want to recall all these reasons. So this is the individual pricing, but what does it mean per ton of product? So that is now the real effect, and it shows why our economics, especially now in 2026, will further improve. So for the amount of greenhouse gas savings per ton of biofuel, before this was per ton of CO2 savings. Now we are talking per ton of biofuel, and in this case, per ton of biodiesel. So the increase in 2025 for the amount of CO2 savings per ton of biodiesel the money we received was about 456 Euro. Now, with the new legislation and the higher prices, the premium is 912. For advanced, so it doubled for conventional. For advanced, it's still more because you are calculating with a zero amount of greenhouse gas volume on the feedstock. But there is no more double counting. So at a price of 200 euro per ton of CO2, the contribution for the product for the ton of advanced biofuel was 1,168 euro. until the end of 2025, and now with a higher price for per ton of CO2 saving, it is 1,244. Still more attractive, but before the gap was between 1,168 and 456, and now it is between 1,244 and 912. So that shows the real impact and the return to a level playing field. But with the fact that the double counting is going away, we also have to adjust our your two-foot handprint, but on this I will come later. So, we also put this chart, the next one, this chart in our presentation, which shows the difference between the different biodiesel products. So, what Verbio is producing is rapeseed machine, which is Same, minus 10. So that is the pricing, what we have seen from January 2023 until January 2026. So price was more or less stable. And the blue line is the price for HVO, hydrated vegetable oil. Same feedstock, other process. And also here you can see the frout because In January 2023, the differential between our FAME-10, our rapeseed methylated, and HVO based on, so both residue-based, was more than $1,000 per metric ton, so much more expensive. And this differential between April 24 And April or July 25 went down to $500, $600. So it came down very much, and that brought our product under pressure. But at least most of this HVO was not advanced. Most of it was palm oil or palm oil derivatives. And now with the new legislation, what you can see now since October, since it is clear that the pricing will change, that the gap went out again. Why is this important? Because it shows we will need in 2026 and 2027, in Germany and in most of the European countries, we will need HVO to fulfill the biofuel targets. The cheapest and most efficient solution is still biodiesel first generation. That's the cheapest product. But there is a blending wall. So, HVO prices beyond the blending wall will set the target per ton of CO2 savings. So our biodiesel, for the biodiesel business, the volumes and the blending wall will be covered, but everything what is beyond, and this is important for the other products like ethanol and especially renewable natural gas, And finally, the CO2 price. So coming to 2026 and 2027, there is a high probability that the price of 400 euro per ton of CO2 saving will not be enough. Prices might go higher, but this we will see during the coming months. But what I want to tell you is there is a strong indication that it needs to go further up because the price setting product for the ton of CO2 savings will be HVO and with the removal of the double counting, as I said, we are back on a level playing field. So now let's come to, as I said, the adjustment of or update of our CO2 footprint. So the handprint on that slide shows the CO2 saving potential of all major products we produce. and trade globally calculated under the German regulatory framework, which until now included the ability to double count advanced biofuels. Under the old rules, we reached 5.5 million tons of CO2 savings in 2024-2025. with a target of 8 million by 2026, 2027. Adjusted for no double counting, the comparable 2024, 2025 figure would be 4.2 million tons. So with the new rules, we now expect 4.7 million ton by 2027, 2028. driven mostly by the expansion of advanced biofuels in North America. And upside comes from carbon sequestration and other emission reduction measures. So we need to adjust our CO2 handprint to the new legislation. So speaking of North America, let me quickly give you also an update on the regulatory development. But as I said, very briefly, so the trade policy of the US administration supports and supported exports, which is strengthening demand. Then two, three weeks ago, Mr. Trump was in Iowa announcing that now a year-round E15 approval will support domestic blending. Right now in the U.S., E10 is standard fuel and is limiting the market in the United States. So the message from Mr. Trump is that there will be our year-round E15 approval. And because ethanol in the U.S. is so cheap, that is really interesting for the filling stations to offer a higher blend and make money on ethanol. And the most important part is the new draft of the 45C guidance, which provides greater regulatory clarity and That's what is behind is the concept of production tax credits related to the carbon intensity. So in the US it's carbon intensity. In Europe it is greenhouse gas calculation. At the end it's the same, but there are different models. So related to the carbon, intensity there is a possibility to get up to one dollar per gallon of ethanol which is about 30 cents per liter of ethanol in the united states which is a lot of money and which will bring the price for ethanol further down so US ethanol is already the cheapest ethanol in the world, but with the 45C, US ethanol will come down further, and it depends on your production, but if you are getting full contribution from the 45C, a US producer can offer ethanol at 20 cents per liter, which is amazing, which is much, much cheaper than fossil gasoline. And what we expect is that this will further drive the export volumes on certain destinations because with prices like this, it opens up even at crude oil prices at $50 or $60. The so-called voluntary blending because it's just the cheapest fuel. So saying that, let's head into our Q&A session. Thank you very much for listening and now let's answer your questions. Sarah, please take the head.

Absolutely. Thank you so much for the presentation, Mr. Rauter and Mr. Trüber. So, dear participants, we're now open for your questions, and everybody is invited to post questions in the chat, and I would be happy to read them out for you. And additionally, analysts have the possibility to ask questions in person via the audio line. And having said that, we received the first virtual hands. The first one is from Mr. Kuhn. So please go ahead and ask your questions.

Good afternoon. Thanks for taking my questions. I'll start with the most obvious one, the guidance. I would use 30 million as a run rate per quarter for the rest of the year. And my impression was that with some maintenance work in the recent quarter, it wasn't like particularly strong. I would already arrive at more than 100. So interested in your views on guidance and let's say how much of a safety cushion is probably reflected in it.

Okay. So, well, we did not increase the guidance. We said it during the presentation that we think that is a good first half year, but, you know, there is still something with the new regulation under negotiations. We think that it's still not over. So there is space for improvement. But there are also other, let's say, uncertainties, which we wanted to wait that we have clearness. So finally, at the moment, you know, but there were also, you saw the chart of the strong ethanol margins October, November, and then it came down. Right now, ethanol again went up. So there is still some volatility in the market. And let's say we have a cautious approach right now. If the things are developing in the right direction, like we expected, then there might be realistic space of growth. some lift up for the guidance, but not before the end of Q3. So right now, I would not say it's a conservative approach. I would say it's a cautious, realistic approach.

Understood. Thank you. Very clear. A second one on the Nevada plant ramp. I think during the last call, there was some discussion on, let's say, time windows of high utilization widening from like daily operations, weekly and so on and so forth. So maybe you could give us a little more insight on where we stand in the ramp where we are in terms of utilization and what further, let's say, gradual improvements we should expect for the upcoming weeks and months and quarters.

Okay. As I said during the presentation, we have achieved record production in December. In January, you remember that storm, so there was – a net gas price, which was incredible. Usually natural gas price is about $3 per mm BTU. And during that week, it went up to $70 and natural gas is still needed to produce ethanol. So that was a difficult situation in January for ethanol. We stopped our ethanol production in Nevada and we were just producing natural gas and made a margin on that. So January was not to through technical issues. It was a market issue and really extreme weather. So what I, we are clear on our track to have full utilization now in Q4 of our business year, which means during the summertime, we had already 83, 85% utilization rate. So we are very positive here to be able to manage that. And I think that January was an interesting part as well for us because we were able just to take the opportunity and make money out of this extremely high natural gas prices. But everybody to whom you are talking, even in Iowa, is that this January, this 10 days or eight days were really extraordinary and very, very cold. We had up to minus 40 degrees Celsius there in Nevada. So you can imagine what was going on there. But we are... on a good development and i think you also can see it olaf mentioned it just look how ethanol and natural gas is developing we were coming from minus 15 in q2 from the last business year permanent improving now we are back and this is mainly driven by the us development

Excellent. Thank you. And one last question. On the German THD quota, I read in some newsletters that there is a discussion to maybe increase from the 16% plan for 27%, maybe towards 17.5%, maybe even 18%. What are you hearing out of that discussion and what would be the, let's say, potential implications of the scenarios currently being discussed?

Well, this is exactly what I meant when I said there is space for further improvement. That is just one point. There are two, three points which are very important. uh or important and with which will further increase uh the value of the greenhouse gas volume so to come back to your specific question uh one percent of co2 saving is about two million tons one percent of higher quota is about two million tons of co2 savings so The original number was 15, 15% for 2027, but we all know that in 2027, some volume from 2024, which is frozen, will come in. So 1% is really too low. That is our argumentation. And if we are going up to 17 and a half, that might be another one and a half percent. Then we talk about another three to four million tons of CO2 savings. But this will mainly be absorbed from the frozen volumes in 2024. So what I hear is that there is consensus that nobody is saying that what we are asking for here in this specific situation, and we were suffering a long time with this drought. So nobody is saying that this is unjustified. And therefore, I think that 17.5 or even 18% can be realistic. But we have to wait another few weeks more. But I would say 70%, 80%, I'm sure that it will come. All right. Fingers crossed. Thanks for the answers.

Thank you so much.

Thank you for the question. Yes. Okay.

That was better. And then we will move on with the questions from Mr. Hesse. So you can unmute yourself now.

Thank you so much for taking my questions. I've got a few. One of them being, if you can give us a little bit of color in Q2, how much of the recovery in bioethanol, biomethane was driven by the improvement in spot contracts versus the improvement in spreads?

Oh, this is hard to answer. All up to you. You know, most of the volume... I would say the lion's share was driven by better ethanol prices and some for sure of the CO2, but most of the CO2 from ethanol was already covered under the existing contracts. So we are talking about, let's say, 30,000 tons of free co2 saving volumes and now you can see yeah well if we are talking about 100 euro or 80 euro better price then it's 30 000 so it's about two and a half it's not not a big chunk two and a half three million euro can be not more but this is just a rough calculation okay it makes sense you know you know you saw it constantine you saw it that prices especially accelerated at the end, November, December, which is very, very unusual, which is very unusual, because finally, now the oil companies are doing their calculation, how much CO2 savings they need for 2025. They look how much gasoline they sold, they look how much gas oil they sold, they make their calculation, and finally, usually in a normal year, they by the remaining volume in the first quarter of 2026. But this year is special because everybody knew that double counting will go away and also that there is fraudulent volume still in the market. And if you buy it until the end of 2025, you are not responsible. you can trust in the papers what you get, even if you know that it is not true. So, Vertrauensschutz is ending at December 2025. And a lot of people were buying and said, okay, I don't have a risk here. So that was driving The CO2 prices, you know, it is still the same framework like the other years before. So nothing has changed regulatory in Q2, in our Q2, which means Q4 2025. And that was driving the prices. But I also said now that there might be even a better development now in 2026. But right now, they are doing their Homework.

That's a great color, Klaus. Thanks. That leads me to my second question, which is what I'm trying to figure out is where should we expect the negotiations to have gone for the new quota levels in 26 in your year? I mean, I know you obviously don't provide us with a number, but I'm trying to figure out – I mean, quota levels ran all the way up to 500 at the end of last year, and they dropped quite significantly. And now, again, at the beginning of the year, I think we're back to about 440 euros. So what I'm trying to figure out is if I look at 2026 calendar year, 2026 – what is the new quota level that I should be kind of anticipating for the term contracts compared to last year? I think last year you were somewhere in the low 300s. If we were to use this new quota price, would today, would 2026 be somewhere around the low 400s?

No, we are not providing you information like this just for the logic. The contracts are negotiated between October, November, December. And most of the contracts last year came in very late because everybody was looking what is the final regulation. So if the market shows 400, 450 euro, that will be also reflected in the contracts. Maybe a little bit lower, but that is always the level. And that was the difficult situation at the end of 2024. You know, CO2 prices came down below 100. And under these circumstances, because they were frozen, and under these circumstances, we had to negotiate the contracts for 2025. And I can tell you, our CO2 prices for the 2025 contracts were even lowered. Okay, so that is the level how you can calculate without disclosing any details of our contracts. So that was the level at that time for the new contracts for everybody. So now the interesting thing is how efficient you are in your processes. And I said roughly with one ton of biodiesel, we are producing two tons of CO2 savings, but it can be 1.8 and it can be 2.4. So that is the specific value of a company, how you are able really to get as much CO2 savings out of one ton of your product as possible. And you know, in this case, Verveo is very, very efficient.

Understood. Then, if I may, just on the guidance, following up from Michael's question, Olave, to you, when I look at the guidance for the remainder of the year now, you clearly are obviously considering the new contract levels for CO2. We have recently, so bioethanol prices dropped significantly again in December. We've started seeing a bit of a recovery now in January, February. Is this new guidance taking a more conservative view on bioethanol prices or are you already pricing in that slight recovery that we've seen in early 26?

Well, Konstantin, don't stress me on the guidance. I think I said enough on it. You know, when we made... You can answer your question yourself. You know, when we made the guidance, you know where the CO2 prices were at that time. But there is still... You know, the regulation has not passed the parliament. So I think right now is really the wrong timing to do already something, give us a few more weeks once we have clearance. And you know, even the impact that it might go from 16% to 17 and a half or 18% for 2027, will impact the market. Because with 17 and a half and even 18%, for 2027, that might be a challenge to fulfill this target. Okay, the molecules will be there, but as I said, the price setting product for the CO2 saving is then for sure HVO and with a price differential to normal biodiesel with $800 to $1,000 per metric ton, you see what that means for the CO2 savings. So, nothing more to the guidance. We will come back in a reason of the time, if it is necessary.

Sounds good. Fair enough. Last two questions, then. Just if we could have a little bit of an idea of what the contribution is that you expect from the ethanolisys plant in, obviously, I think in 26, it's very negligible, but in 27, if we could have an idea of what kind of contribution you expect from that, and at what level of EBITDA would you feel comfortable, again, to start investing capex to increase your biomethane production again? Those are the two questions.

This is very interesting. So, first of all, we are going to start up the ethanoluses in a new business here, beginning July. I don't know what will be really the contribution, because this ethanoluses gives us new additional optionality. So right now, I think there is also a change in the view in Europe between this discussion first and second generation. The cheapest way to fulfill decarbonization in transport is first generation biofuel. That's it. And you know that Germany has still a lower target than what is allowed in Europe. We can do 7% volume. There is a cap, and Germany has 4.4%. They wanted to decrease it further, but no way. Maybe we are also able to bring it up again. But that product is the feedstock for ethanol uses. So it is a new product. process. It will be a new market. We need to develop during 2027. So don't expect an additional epic DA contribution for the next business year. That is something new. This market will be not dependent on the transport sector. It's a voluntary market. We want to see how much people are really willing to pay for the green premium. And to the whole market, which is necessary for Germany, this is just a very tiny, tiny, tiny production. But I used to compare it with when we started up with biodiesel 25 years ago in 2000. So it was a new product. We had to convince the whole year to use that biodiesel. We had no approvals from the truck producers. Ethanolosis is a promising, interesting, new segment. And right now, I think, when I recall all the ideas, what big players had with renewable chemicals, I think it's just Verveo which remained to follow up that way. But don't expect an additional contribution also for the next business year. We have to develop this market. We have to develop the process. We have to improve it, go through the Phillips curve, bring it into the market. But once it is established, it will create completely new and a different stability to Verbio than we had in the past. The dependence on sometimes crazy developments in the transport sector with fraud, with, I don't know, some sometimes stupid regulation will go away. That's a new pillar. in the development for Virbio, but it will take time. Hello? Thank you so much, Klaus. Okay, good. Okay, thank you very much for your questions. Continue.

Yes, we have two questions in the chat we do not want to miss, even if we're a bit above time. But Mr. Timmy would like to know, since we heard a lot about the US and EU, My question is, are there any updates in India, especially with the Gale deal? And another question from Mr. Lida is, can you give an update on India and insights into your global trading activities?

Okay. First, India, right now, no, I'm sorry, no new news, except that, but this you all know that Now, India and Europe is coming closer in a lot of things. One of our ideas in India was that we wanted to have the opportunity to monetize greenhouse gas savings also in Europe. That's now becoming more realistic with this trade deal, which is promising. And to develop new projects with Gale, we have also now another partner, which is a Japanese gas company. So it's going on, but nothing which can be disclosed at that point. I also can tell you that the Indian government is preparing a new big package for, they call it CBG, compressed biogas in India. Indian government did a great story with ethanol. You know that India has now E20. So 20% ethanol is the regular fuel in India. And they want to repeat this positive development with CBG. So a big package will be prepared. It will somehow be disclosed in summer, July, August. And that will lift up our activities in India to a new level. But please, I'm sorry, but give me a little bit more time. So, Sarah, what was the other question, the first one about the U.S.?

No, the first one was about India, especially Asia.

Okay. And the second point was about global trading? Yes. So, yeah, I would say two years ago, Verbio was 99% pure producer. And since that time, we established more trading activities in North America and also trading activities for Europe in Geneva. So the development is positive. It's not only the impact with trading volumes, what we are doing, It is also stabilizing our business because with our team in Geneva, we increase our supply market. So we are now also supplying product into France, into Belgium. So it widens up. our physical or our ability delivering physical molecules to the market. So the contribution is not only on the pure trading side and the overall volumes what we are now doing from Verveo is let's say between 10 and 25% more than the volume what we are producing ourselves. So we had to learn. We have now our logistical abilities in Rotterdam. And yeah, so the plan for the future is to increase this further. The plan is to go up to 50% of our physical volumes. So the amount what we can produce on ourselves. But to make it crystal clear, VIRBIO will be continuously a main producer of the molecule and the trading is just something to make sure that our own plants can always run on a 100% capacity. And this leads me to one question what I forgot. from Konstantin, he was asking at which level we would increase our biomethane capacity. So here also, after this crazy time the last three years, we have now no clear plan at which level we would come back to do new investments. Right now it is absolutely not on our agenda. First, what we want to see is that the measurements against fraud will take place, that they are efficient. Because if the fraud is going on, not from China anymore, maybe from Pakistan, from South America, I don't know from where, but it doesn't make any sense to continue doing new investments in Europe. So first of all, we want to see that the fraud goes down. We should not be naive that it will completely go away. There will be always some fraud, but how effective will be the new regulation? And finally, what does the EU Commission and what does the German Ministry of Environment learn from the situation the last two and three years. Because also to be crystal clear that fraud mainly happened in the biofuel sector. But a lot of other industries were looking what is going on in the biofuel industry and what are the measurements to protect investments which were done with the idea of supporting the energy transition. So I know that we are not the most lost child of the German Ministry of Environment, But finally, they didn't do a good job. Now they come back with a very, very restrictive new regulation. But at the end of the day, we have to look what they really bring on the ground. And that's the time, minimum the next year. Let's see what is going to happen, how the markets are developing, and then we will make a decision. Okay, some more.

nothing more to add so no further question come in so that answer concludes our call for today and um yeah i said thank you for attending have a lovely remaining week and um some final remarks from your side yes sarah thank you very much you did a great job it was a good call everything worked thank you very much for everything everybody who was participating

It's an honor for us that you are interested in our company. We know that it was not an easy time the last few years, but it is getting better. So thank you very much. Thank you for everybody who was joining, and namaste.