Annual Report 2018 «The future is green energy, sustainability, renewable energy.» «We are all responsible for doing our part of ARNOLD SCHWARZENEGGER what's necessary in order to leave a planet and an environment to next generations — a planet and an environment that allow our children and grandchildren to thrive 4 Green profitability 19 Seminar opening and live well, just like we have.» 7 Chasing sustainability 20 Biokraft official opening 8 Towards a greener world 24 Board and CEO 12 Biokraft Skogn 26 Employees 16 Innovation, research and development 28 Owners 18 Timeline 31 Financial statement 2018 3 BIOKRAFT ANNUAL REPORT 2018 GREEN PROFITABILITY Our children are blaming us, their parents, for important to safeguard our welfare for decades to not doing enough to leave them with a planet come. and an environment that will give them the same We do not believe that profit-oriented industry opportunities and the same quality of life that we and reduction of greenhouse gas emissions need have enjoyed. to be contradicting forces. On the contrary – the How do we achieve the action needed to expertise, ability to innovate, drive and commitment successfully limit global warming to less than 1.5 found in private sector businesses will be necessary degrees Celcius? At Biokraft, we believe that such to save our planet. Biokraft brilliantly exemplifies that action is best left to private enterprise and our shareholders' demand for returns can, and will, lead to eternal quest for profitability. We believe that the industrial action that will give important contributions eternal quest for green profitability is the business to reducing greenhouse gas emissions. opportunity of our time. When we and many other At Biokraft, we are patient and persistent. We private enterprises successfully address this great are pioneers. We act as commercial industrial business opportunity, this will also limit the negative entrepreneurs do. We are confident that our effects of global warming and create the future our investments in state-of-the-art green industry will children ask for. yield attractive returns. By producing renewable In 2018, we completed the construction of the liquid biogas, we are furthering Norway's proud world's largest factory for production of liquid biogas tradition as a leading energy supplier. (LBG). We are extremely proud of this achievement. We are equally proud of the way in which we have started up our factory operations in 2018. We «In a world ever more populous, have successfully managed to ramp we need more renewable energy up production of LBG towards full capacity, reaching a very important and more sustainable food production» milestone in late 2018 by achieving a month-by-month positive EBITDA. We have not looked back since, and into 2019 we have New green industry must lead the way towards gained additional momentum and speed in our quest a greener world. Successfully achieving such a for green profitability. transition will happen in interaction with politicians In the past twelve months, we have seen very and authorities. The political will to act by changing encouraging developments in the market for liquid markets and regulatory contexts in ways that makes biogas fuel. Several leading manufacturers of heavy consumers more motivated to choose greener trucks have launched their new long-range solutions alternatives are necessary. Both carrot and stick must for liquid biogas – equipment and renewable be used, and investments in new green industry will solutions that the leading logistics companies only materialize if there are long term consistency want. We have seen leading Norwegian logistics and predictability. The Norwegian government companies such as TINE and Litra start utilizing this has already implemented changes that encourage THE ETERNAL new equipment, increasingly running their heavy large scale production of renewable liquid biogas trucks on liquid biogas. We have also seen another in Norway. A strong political will to act combined important pioneer entering the stage. Norwegian with fearless industrial green entrepreneurship is a QUEST FOR GREEN cruise operator Hurtigruten have announced that forceful combination – a combination that can and they will run six ships on liquid biogas by 2021. will facilitate the necessary green transition that our These developments are all very encouraging, and planet needs. they exemplifiy the demand driven growth for liquid At Biokraft, we are in the business of redesigning PROFITABILITY biogas that we and energy analysts have expected the value chains of yesterday towards the value and predicted. circles of tomorrow – facilitating a transition towards I will be honest with you. Producing liquid a circular bioeconomy that is both profitable and This year we have seen our youth take to the streets in climate strikes, biogas and providing it as fuel to heavy trucks and consistent with the sustainable development goals. ships feels good. It feels good because I know we When the Norwegian government launched their expressing their frustration over the lack of efforts to reduce greenhouse are making an important contribution to reducing new strategy for bioeconomy, they chose Biokraft greenhouse gas emissions, and it feels good because to host the launch. We are proud of that, and such gas emissions to limit climate change. Our children tell us that the way they I know we are making money doing it. And there is a attention impels us to further innovation, action and bonus: I know that we are creating new jobs, secure green investments. We are chasing the innovation see it, it is mostly talk and too little action. and green jobs, and that creating more such jobs is breakthroughs that will enable more production of 4 5 BIOKRAFT ANNUAL FINANCIAL STATEMENTS 2018 CHASING SUSTAINABILITY better bio-fertilizers and more production of sustainable animal feed. In a world ever CHASING SUSTAINABILITY more populous, we need more renewable energy production and more sustainable food production. At Biokraft, we do not As a Norwegian company Biokraft is, like Norway, committed to making a only want to provide more renewable fuel, but we also see business opportunities contribution towards the UN's 17 Sustainable Development Goals (SDGs). related to more sustainable food production. At Biokraft, innovation and We believe that our contribution is particularly relevant and exemplified in industrial scale action are at the heart of what we are doing. We are entrepreneurs relation to SDGs 7, 8, 9, 12, 13 and 15. who put capital, talent, and innovations to work at an industrial scale. Biokraft sees the 2030 agenda for «Climate change is an urgent issue and we’ve got to act sustainable development as a business «We unite investors' need for opportunity. We innovate and execute accordingly. Biogas is part of the solution and utilized attractive returns with our on focused efforts in order to attempt as renewable fuel in heavy transportation on land and in redesigning the value chains of yesterday world's need for more The Norwegian Government presented its new strategy for the bioeconomy towards the value circles of tomorrow maritime transportation makes a difference. It is important at Skogn, hosted by Biokraft. The Minister of Oil and Energy Mr. Tord Lien – facilitating transition towards a circular renewable fuel and more and the Minister of Aquaculture and Fisheries Mr. Per Sandberg thanked bioeconomy profitably and consistently towards meeting the 2030 Paris Agreement.» Biokraft, here represented by CEO Mr. Håvard Wollan, for the contribution with the SDGs. We take profitable sustainable food production.» BØRGE BRENDE, PRESIDENT WORLD ECONOMIC FORUM towards developing the new bioindustry in Norway. industrial action - providing practical sustainable solutions. Norway must develop new, green industry that will safeguard welfare long after the sun has set on traditional oil and gas industry. Biokraft is part of this new, green industry. Biokraft is Affordable Industry, Climate action the future. We unite investors' need for and clean innovation Biokraft makes a attractive returns with the world's need energy and contribution towards for more renewable fuel and more Biokraft makes infrastructure taking urgent action sustainable food production. a contribution Biokraft makes to combat climate I feel privileged to head Biokraft, towards ensuring a contribution change and its and I know that all my employees feel access to affordable, reliable, sustainable towards promoting inclusive and impacts. Biokraft produces renewable privileged to work for Biokraft. In 2019, and modern energy by producing sustainable industrialization and fostering energy, enabling consumers to shift we celebrate that we have had ten good renewable biogas of engine fuel innovation. Among other, we see us from fossile to renewable alternatives years in business. I was part of the team quality and sell this fuel at competitive playing a role in applying the know-how immediately. that founded Biokraft ten years ago. It prices. Among other, liquid biogas can and technology developed over decades has been a rewarding journey. When we be utilized as vehicle fuel in heavy in the Norwegian oil and gas industry – Life on Land officially opened the world's largest LBG transportation and as fuel in ships. leveraging this know-how and technology Biokraft makes factory at Skogn in September 2018, in the more sustainable context of a contribution we had over 100 prominent guests and Decent renewable energy production. This further towards protecting the Prime Minister of Norway attending. work and develops the competencies we need for a and promoting Our Prime Minister said in her opening economic greener future. sustainable use address: Biokraft takes Norway into growth of terrestrial ecosystems, sustainably the green transition. At Biokraft we are Biokraft makes Responsible manage forests, combat desertification, proud of this. The Sustainable Development Goals are the blueprint to achieve a contribution consumption and halt and reverse land degradation We will continue to innovate. We will a better and more sustainable future for all.