Quantafuel : Q4-21

Quantafuel ASA

www.quantafuel.com

Fourth Quarter 2021

Consolidated financial statements

Quantafuel ASA

Quantafuel Fourth Quarter 2021 consolidated financial statements

Fourth quarter report 2021

• Successful turnaround at the Skive plant
• Good production in Skive in January, but an unplanned shutdown in February is delaying the planned production ramp-up
• Skive 2022 production volume target of 12,000 tonnes maintained
• Progressing with full speed on other international projects
• Secured NOK 400 million in additional growth capital
• Positive operational cashflow from the plants expected within second half of 2022

Quantafuel's mission is to drive a sustainable future by converting plastic waste into valuable products. With the strong support from our industrial and strategic partners, we are well positioned to become a major, integrated recycling player.

Quantafuel's chemical recycling technology and plant design will be scalable and can be applied globally, and the demand for recycled, high-quality products, contributing to reduced CO2 emissions, is considerable. Quantafuel is experiencing high interest from major international companies within petrochemical, refineries, and fast-moving consumer goods. Also, on the sorting and mechanical recycling side, we are seeing high demand, supported by increasing market prices for receiving plastic waste, as well as sales prices significantly above our budget.

Quantafuel offers a win-win solution for the environment, our shareholders and our customers, and is well positioned to capitalise on these opportunities based on our process and technology toolbox.

Quantafuel's competitive edge is being present and integrated into the whole value chain. Together with our partner Geminor, we will provide a fully integrated, independent sorting and recycling environment with chemical recycling capacities, as well as a tracking and logistics capacity that can document sustainability in every step of the value chain. In certain markets, Quantafuel will thus engage in mechanical recycling to increase recycling rates and supporting the overall value proposition. Where similar setups on sorting and mechanical recycling exist today, we are cooperating closely with leading national and international players, complementing their existing capabilities. Quantafuel's plants will deliver certified, recycled material sought after by the leading consumer goods companies, completing the circular economy of plastic waste in a transparent and documented manner.

Quantafuel has been granted environmental product certificates from both ISCC PLUS and REDcert2, confirming our tracking capabilities and making us a frontrunner in the recycling industry.

Based on the experience gained from our plants in Skive (Denmark) and Kristiansund (Norway), as well as a notable process and technology toolbox, Quantafuel's management and Board of Directors are confident in continuing announced projects. We are discussing the roll-out of large-scale capacity plants with both existing and potential partners.

Health, Safety & Environment - Zero recordable incidents

Quantafuel's vision is zero harm to people, assets, and the environment throughout our business landscape.

We are pleased to report that Quantafuel continues its zero recordable HSE incidents statistics during fourth quarter and for the full year of 2021.

Quantafuel Fourth Quarter 2021 consolidated financial statements

Skive - Operational and technology update

During fourth quarter 2021 we successfully upgraded and commissioned two production lines in Skive and the plant quickly transitioned into production mode. The newly installed equipment has been performing as expected, removing the obstacles preventing long-term, stable operation, and the two lines operated stably at design capacity in December until the production was stopped by the shredder failure.

We also reached significant achievements in Skive in January, processing more than 100 MT of plastic waste weekly and the two lines were running simultaneously with an uptime of 69% at an average load of 79%. Upgrade of the two remaining lines is ongoing as previously communicated.

Completed tests and commercial deliveries confirm that the output from Skive has the quality and mix to meet expected volume and prices. Parallel development work in cooperation with our industrial partner is focusing on improvements to enhance light fraction yield and quality.

We have a continuous focus on feedstock to improve our production quality and cost balance over time. We are making significant progress with our partners in securing large volume feedstock that is not recycled today.

On the 5th of February 2022, we had a temporary shutdown of Skive production. Our inspection revealed damage on the steel cone connecting the burner chamber with the flue gas heating box on reactor no. 2. We immediately initiated repair work and have communicated to be back in production within mid-March. This repair will not impact the original plan for the two remaining lines. It is important to note that this issue is neither related to Quantafuel's pyrolysis process nor its technology. The downtime is being used to perform preventive maintenance and planned improvements requiring a cold process.

Despite the temporary shutdown of Skive; the volumes and figures we've seen at the plant demonstrate that Quantafuel has proven its technical and operational capability to transform plastic waste to commercial products at high volumes and high utilisation rates. Still, our Proof-of-Concept definition remains a key milestone towards full production at a 20,000 tonnes per year run rate. Based on the learnings from Skive, Quantafuel's management and Board of Directors are confident in continuing the planned Plastic-to-Liquid projects.

The Skive project is now finalised with a capex of NOK 620 million, an increase of NOK 10 million compared with last quarterly report. The Skive plant is handed to operations (Quantafuel Skive ApS).

Kristiansund update - Mechanical recycling investment on track

There is a strong demand - and record-high prices - for high-quality recycled plastic material. Quantafuel's recycling plant in Kristiansund has completed its new 20,000 tonnes per year sorting line. We have been feeding plastic into the new line since mid-November and up to 40 tonnes of plastic is being processed on a daily basis. Although we are still ramping up, a number of product shipments have been made at market prices significantly above budget assumptions.

Quantafuel's operation in Kristiansund illustrates the company's growth plans; By combining

Quantafuel Fourth Quarter 2021 consolidated financial statements

chemical recycling with mechanical sorting and recycling, we get the best plant economics and the highest recycling rates, which in turn contributes towards solving the global plastic waste issue.

In December, the set-up in Kristiansund was enhanced with additional extruder capacity. The extruder is now fully operational and turns hard plastic polyethylene (PE) and polypropylene (PP) flakes into pellets used by European customers for making new plastic products.

To fully utilise the installed sorting capacity, additional modules to increase commercial volumes will be installed, with production scheduled to start in Q3 2022. In addition to the capacity of 20,000 tonnes for mechanical recycling, the plant will have capacity to increase production with 10,000 tonnes of chemical recycling feedstock per year for a potential permanent plastic-to-liquid plant by increasing operational shifts on the sorting line.

In February, we entered into a new chapter in our cooperation with Geminor in Norway; offering plastic recycling solutions to a larger national customer base. Quantafuel's sorting and recycling capacity combined with Geminor's tracking software (Gemisoft), trading and logistics are the key competitive advantages that will enable us to gain market shares and become a key and trusted player within this market. Geminor extend the sourcing arm of Quantafuel Kristiansund, to secure supplying the facility with a minimum of 20,000 tonnes of solid plastic annually. Together, we aim to become the leading plastic upstream player in Norway and the rest of the Nordics.

Esbjerg development

Quantafuel is progressing as planned with its Esbjerg development in Denmark. In the beginning of February 2022, an agreement was signed with Eggersmann, a leading supplier of waste sorting equipment. The contract includes engineering and reserves Quantafuel a firm manufacturing slot that secures our schedule for the project.

The Esbjerg sorting facility is planned to be operational during the second half of 2023. The aim is for Esbjerg to become the major Danish hub for plastic waste sorting, significantly contributing to the EU and national recycling targets, reducing incineration, and lowering CO2 emission.

Quantafuel believes that the Esbjerg development will be a game-changer for the post-consumer plastic waste market in Denmark. There is a great need for plastic waste sorting capacity as Denmark has set very high targets for recycling of plastic waste and our Esbjerg plant will be a major contributor for the country to reach its ambitious targets. Once completed, the facility will have the capacity to sort more than 160,000 tonnes of plastic waste into clean mono-fractions, ideally suited for mechanical and chemical recycling.

The plastic waste sorting facility is Quantafuel's first step towards developing a full sorting and recycling site in Esbjerg. The next phase will include a large-scaleplastic-to-liquid (chemical recycling) plant based on Quantafuel's technology, with significant volumes of plastic feedstock sourced from the sorting facility.

We are moving into the final stages before construction phase and are confident in securing capacity to start construction work the first half of 2022.

The Esbjerg Sorting Plant has a planned capex of NOK 670 million, with an unlevered IRR of more than 30%.

Quantafuel Fourth Quarter 2021 consolidated financial statements

Aalborg facility

Quantafuel has secured a plot in Aalborg, adjacent to Geminor's Aalborg-site, through a firm contract with Port of Aalborg to develop a logistic hub with the primary focus to secure stable feedstock to our plant in Skive.

The facility is being planned operated in close co-operation with Geminor.

New prospects

The fourth quarter has been a period with strategic moves designed to meet our growth strategy.

In December 2021, ENOC Group, Dubal Holding LLC and Quantafuel signed a Memorandum of Understanding (MoU) to study the potential of establishing and operating Plastic-to-Liquid production plants turning plastic waste into valuable products and a step towards a circular economy. The United Arab Emirates (UAE) recently announced "The UAE Net Zero by 2050 Strategic Initiative", a national drive to achieve net-zero emissions by 2050 as well as an ambition to send zero waste to landfill by 2030. The initiative aims to promote dynamic economic growth alongside positive environmental impact. The Plastic-to Liquid project with Quantafuel will be a significant step towards a circular economy by converting waste plastics into valuable products. Dubal Holding LLC and ENOC LLC are 100% subsidiaries of Investment Corporation of Dubai (ICD).

Quantafuel has strengthened its position in the UK by signing a contract to acquire the remaining 50% of the shares in Quantafuel UK, as well as the project companies in Sunderland and Cheshire. Following the agreement, Quantafuel ASA will own 100% of the three UK companies. We see a strong potential in the UK market and look forward to contributing towards the circular economy and help improve the UK's plastic recycling rates. We are making progress with our Sunderland project where we have selected a 12-acre (approximately 50,000 m2) site on the port for our first large-scale plant in the UK. A preliminary planning application has been submitted, while a full planning application and permitting application will be finalised and submitted in March. Subject to approval, this plant will annually process over 100,000 tonnes of plastics waste.

We continue to work closely with VTTI towards a chemical recycling plant supplying circular raw materials to Vitol. The feasibility study is proceeding, but due to complications regarding the permitting process, we are once again looking at several sites which in turn is prompting us to significantly delay the target start-up date.

Corporate Social Responsibility - Contributing towards a sustainable future

With a fully certified value chain, and a technology enabling more plastic waste to stay in a circular process, Quantafuel is well positioned as a key recycling partner.

Quantafuel offers a clear path for our partners' journey into a circular economy for plastics:

Recycling: By sending plastic waste to Quantafuel, you contribute to a circular economy for plastics. Plastic waste will be converted into recycled products in compliance with the EU definition of recycling.

Quantafuel Fourth Quarter 2021 consolidated financial statements