Everfuel A/S : Interim Report Q1 2024

INTERIM REPORT

Q1 2024

Transformer area with entrance to Electrolyser | HySynergy

Everfuel Interim Report Q1 2024

Q1 This is Everfuel

Everfuel is making green hydrogen for zero emission industry and mobility commercially available across Europe, offering competitive all-inclusive hydrogen supply and fuelling solutions.

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We own and operate green hydrogen infrastructure and partner with industry and vehicle OEMs to connect the entire hydrogen value chain and seamlessly provide hydrogen fuel to enterprise customers under long-term contracts. Green hydrogen is a 100% clean energy carrier made from renewable solar and wind power and key to decarbonising industry and transportation in Europe. We are an ambitious, rapidly growing company, headquartered in Herning, Denmark, and with activities in Denmark, Germany and The Netherlands, and a plan to grow across Europe. Everfuel is listed on Euronext Growth in Oslo under EFUEL.

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Everfuel Interim Report Q1 2024

Q1 Key Events

Q1 KEY EVENTS

• HySynergy 1 start-up moved to second half 2024 due to failed
  commissioning.tests of certain sub-systems provided by the supplier postponing internal Everfuel and supplier software validation
• LOI with undisclosed industrial offtaker of green hydrogen in Germany
• Political agreement in Denmark for financing of the hydrogen pipeline infrastructure
• Five trailers in operation, serving the Heinenoord bus station and upcoming bus depots in Germany
• Q1 EBITDA of EUR -2.6. million (EUR -5 million Q1 2023)
• Cash position of EUR 25.4 million at end of March 2024
• Significant cost reduction in downstream business activities
• Current liquidity position expected to fund investment and operation plans well into 2025
• Updated long-term ambition of >2 GW installed capacity,
  EUR >1 billion revenue by end-2035 with an EBITDA margin of 30-35%

Electrolyser building at HySynergy

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Everfuel Interim Report Q1 2024

MESSAGE FROM THE CEO

"Everfuel is step by step nearing the completing HySynergy 1. Having to postpone start-up into the second half of 2024 is frustrating, but it reflects our commitment to implementing a safe and long-term sustainable hydrogen production facility. Pioneering the hydrogen industry is a challenge for all participants and we are working closely with our partners and suppliers to make sure HySynergy is completed as fast as possible. Together we will succeed, building unique competences along the way, positioning Everfuel to capitalise on the fast-growing hydrogen market.

Everfuel also continues the implementation of our realigned strategy, prioritising the development of large-scale electrolysers supplying industry and heavy-duty mobility, while at the same time reducing cash burn and adding financial flexibility. Today, we present our updated long-term ambitions as a leading European independent hydrogen producer, enabling hard-to-abate industries to decarbonise, as reflected in the recent LOI signed with a new partner in Germany. Execution of our strategy is supported by the Hy24 JV, which positions us to accelerate deployment of green hydrogen production to meet strong European demand growth driven by the urgent need for zero-emission energy and transport systems."

Jacob Krogsgaard

Founder and CEO of Everfuel A/S

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Everfuel Interim Report Q1 2024

STRATEGIC DEVELOPMENTS

Strategic developments

Everfuel's ambition is to make green hydrogen for zero emission industrial activity and mobility commercially available across Europe. Everfuel primarily focusing on the development of large-scale green hydrogen production capacities starting in Denmark, and providing green hydrogen for industrial and mobility users in Europe. The Company is engaging with partners, customers and authorities across the entire value chain, from production to distribution and fuelling, when executing its long- term strategy for value creation as a leading European green hydrogen company.

European support for green hydrogen is increasing. This is reflected in the RED-II directive, the Alternative Fuels Infrastructure Regulation (AFIR) regulation, the European Hydrogen Backbone, the Danish PtX tender for production and supply of green hydrogen and the agreement for a hydrogen pipeline connecting Denmark and Germany.

In April, a political agreement was reached in Demark for financing of the future hydrogen infrastructure. As part of the agreement, the national grid operator Energinet will involve market participants to take the

next important step towards maturing the hydrogen infrastructure by first identifying their actual requirements based on the hydrogen project portfolio, and subsequently, provide a binding offer of capacity contracts. The technical studies are planned to be completed by end 2024, with the aim of qualifying an investment decision for the hydrogen pipeline in the first quarter of 2025. A similar process is underway in Germany. Energinet is working closely together with Gasunie Deutschland, which expects to establish a hydrogen connection from the Danish- German border southwards as part of the German hydrogen network. 

Also in April 2024, The European Commission issued the Free Allocations Delegated Act, which states that from 2025, renewable hydrogen producers will receive the same amount of free carbon credit allocations as fossil incumbents. With no carbon emissions from renewable hydrogen, producers such as Everfuel can sell credits and offset the green premium by tens of euros per ton of hydrogen. Including green hydrogen in the European Renewable Fuels of Non-Biological Origins (RFBNO) scheme supports increased value creation and enables final

investment decisions on additional electrolyser capacity to meet large-scale demand from industry and mobility.

In 2023, Everfuel realigned its strategy and adjusted the organisation to focus the business, increase efficiency and reduce costs extending the capitalisation of Everfuel into 2025. Upcoming ele- ctrolyser investments are expected to be financed by available liquidity, supported by HySynergy 1 cashflow from operations, new equity, the Hy24 JV, public grants and relevant project debt financing.

Updated financial ambitions Industrial-scalegreen hydrogen production, distribution and fuelling networks are required for Europe to meet stated climate targets. Everfuel's activities support these targets and maintains the ambition of being one of the first green hydrogen companies to reach over EUR 1 billion in revenue from hydrogen sales to industry and mobility customers.

Following the strategy realignment, Everfuel has updated the company's financial model and set new

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Everfuel Interim Report Q1 2024

Strategic developments

STRATEGIC DEVELOPMENTS

long-term ambitions based on the development of the hydrogen backbone infrastructure in line with agreements announced Danish and German Governments. Everfuel targets to have more than 2 GW of green hydrogen production capacity installed by end-of 2035 based on the execution of three electrolyser projects in Denmark, supporting the above mentioned revenue target and an expected EBITDA margin of 30-35% %. Total investments are forecast to around EUR 2 billion, of which EUR 300 million is expected externally raised equity financing and the remainder being expected cashflow from operations, debt at group and SPV level and various grants. Of the EUR 300 million equity requirement, approximately one-third has already been raised.

Everfuel recognises, that as an early mover in a new industry, the Company is breaking new ground and continuously contribute to constructive maturation of technology together with suppliers and stakeholders, exposing the Company to protracted political progress, immature technology, supply chain challenges, cost inflation and scarce resources including access to competence.

Hydrogen storage at HySynergy and pipe to Crossbridge refinery

Everfuel Interim Report Q1 2024

Operational review

OPERATIONAL REVIEW

Upstream activities

Everfuel continues to progress commissioning of HySynergy 1 focused on the sub-systems required to start production and delivery of green hydrogen. The main electrolyser facility is ready for start-up, while some sub-systems experience delays following commissioning tests. As announced in April, this is impacting the planned start-up of the HySynergy 1 facility with production now expected to commence in the second half of 2024. Testing, verification and certification is being executed in close cooperation with the electrolyser supplier, Nel, and other sub-suppliers with focus on the following areas:

• Gas holder
• High-pressuresystems
• Compressors
• Finalisation of software and automation, documentation and certifications

Since a leakage was detected in February 2024, the electrolyser supplier has been working on completing the rebuild of the deoxidiser, which removes oxygen and moisture from the hydrogen flow as part of the electrolyser's high-pressure auxiliary system. The implemented solution is awaiting PED (pressure equipment directive) certification. Everfuel and the

electrolyser supplier agree that a solution need to be safe and long-term robust.

Everfuel has implemented additional safety measures, in addition to the recommendation of the supplier, to ensure integrity of HySynergy. This resulted in identification of a leakage during verification test of the recently rebuilt gas holder, which serves a pressure balancing and safety function. The gas holder integrity is a precondition for the continued commissioning and final validation of the high- pressure system, compressors and completion of the automation and software systems. Electrolyser supplier and Everfuel has taken actions to resolve the gas holder leakage.

Everfuel and sub-suppliers have committed highest attention and priority for completing the remaining, and strongly interdependent commissioning steps.

Further commissioning of the facility includes operations and procedures framework and master control systems. These are developed in close cooperation with Crossbridge Energy and Danish authorities and covers technical documentation, training and obtaining required public and third- party approvals to commence commercial operations,

as well as development of the company's proprietary software for facility operations and related system integration.

Everfuel is managing the EPC scope of the HySynergy project. Combined with the abovementioned process, this provides unique experiences and skills related to the development of industrial scale hydrogen production facilities which are directly applicable to future planned hydrogen facilities, and it makes Everfuel an attractive partner in various dialogues.

Planning is progressing for the 300 MW HySynergy 2, which will be developed in three phases of 100 MW each supported by phase 1 funding from EU's Important Projects of Common European Interest (IPCEI). Everfuel and Crossbridge Energy has a long- term agreement stipulating the terms for hydrogen supply from the first 100 MW electrolyser. Final investment decision is planned in 2025, supported by lessons learned from the HySynergy 1 start-up to optimise project execution and technology selection. FID is subject to regulatory approval and funding, as well as synchronisation with Crossbridge Energy's investment decisions for required equipment at the refinery.

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Everfuel Interim Report Q1 2024

OPERATIONAL REVIEW

Downstream activities

Everfuel is focused on establishing fuelling solutions for truck and bus depots with long-term hydrogen offtake agreements without technology risk. Later, as technology matures, and demand emerges Everfuel will engage or partner in developing publicly available heavy-duty hydrogen stations.

Everfuel operates the bus station in Heinenoord, Netherlands, and continues the construction of the bus stations in Frankfurt and Wuppertal, Germany. The Company has 12 purpose-built hydrogen distribution trailers and 6 mobile storage units, following divestment of 4 storage units.

Everfuel prioritises the safe and efficient operations of the Heinenoord bus depot in the Netherlands and completing the existing projects in Frankfurt and Wuppertal, Germany. These will be served by the distribution trailers as these return to operations, bringing green hydrogen from HySynergy 1 from 2024 or external hydrogen sources when optimal. The target is to confirm a positive business case based on these three bus depots and capture further growth opportunities, prioritising additional bus depots in Germany. Everfuel will also seek to develop truck depot projects.

Following the grounding of parts of the hydrogen trailer fleet in 2023 due to leaks, Everfuel has worked closely with the trailer supplier and the valve manufacturer on rebuilding the hydrogen containment system to resolve the root cause. Two of the nine impacted trailers have returned to operation. The remaining units are expected to complete repairs in the near future. Three distribution trailers of an older specification were not affected by the valve issues and have continued to serve the Heinenoord bus station. With trailers starting to return to operations, Everfuel have capacity to supply the German bus station in Frankfurt and Wuppertal when they commence operations.

Hydrogen distribution center at HySynergy in construction

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Everfuel Interim Report Q1 2024

OPERATIONAL REVIEW

Group activities

Everfuels group activities comprise administrative and business development functions. The Company is working to secure multiple customers within industry and mobility with strong commitments to reduce the financial risk of building hydrogen production capacities, hydrogen refuelling projects and its expanding pipeline of potential end-user contracts for supply of hydrogen primarily focused on Germany due to favourable conditions for hydrogen offtake.

In May, Everfuel signed a Letter of Intent (LOI) with a large industrial offtaker in Germany for the supply of up to 10,000 tons of green hydrogen per year from 2028. The undisclosed customers' initial demand

is expected to match the hydrogen output from an operationally optimised 100 MW electrolyser, aligning with Everfuels' strategy of developing standardised, scalable electrolyser modules tailored to demand. The customer expects to increase consumption of green hydrogen, classified a RFNBO, over time in accordance with its plans for decarbonising industrial processes.

Denmark has a significant potential for hydrogen export and the German industrial company recognises Everfuel's unique strategic position and

plans for establishing hydrogen production capacities in the attractive Danish power zone DK1.

Everfuel may supply the RFNBO hydrogen from project Sif or other future electrolyser projects under development. The LoI is the first step towards a final commercial agreement between the parties, which is conditional upon several factors, including the establishment of hydrogen pipeline infrastructure between Denmark and Germany connecting Everfuel's production facility and the customer. The Company's advanced stage of production capacities and experience make Everfuel a credible partner in discussions with several potential industrial customers in Germany.

In April, Everfuel welcomed Yasuhiro Miyata from ITOCHU Group in the Board of Directors. Mr. Miyata comes with extensive industrial network and experience supporting the strategic collaboration agreement between Everfuel and ITOCHU and Osaka Gas. Everfuel, ITOCHU and Osaka Gas plan to leverage their combined competencies and resources to develop and commercialise green hydrogen, initially targeting Germany, Benelux and the Nordic countries, and over time expanding into new markets.

Electrolyser building and trailer bay from above | HySynergy

Everfuel Interim Report Q1 2024

FINANCIAL

REVIEW

Valve panel area at HySynergy

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