Q3 2021 Origin Materials Inc Earnings Call

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Okay.

Yeah.

Thank you for standing by this is the conference operator, welcome to the origin materials third quarter 2021 earnings call.

All participants are in listen only mode and the conference is being recorded after the presentation. There will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you may signal, an operator by pressing star zero.

I would now like to turn the conference over to Ashish Gupta Investor Relations. Please go ahead.

Thank you and welcome everyone to origin materials third quarter 2021 earnings conference call joining the call today from origin materials co CEO Rich Riley co CEO and co founder John vessel and CFO Nate Wally how does this call origin issued its third quarter press release and presentation, which we.

We'll refer to today it.

These can be found on the Investor Relations section of our website at origin materials Dot com.

Please note that on this call, we'll be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today should not be relied upon as representative about.

Use as of any subsequent date and we undertake no obligation to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations for further discussion of the material risks and other important factors that could affect our financial results. Please refer to our filings with the SEC, including our quarterly report on Form 10-Q.

In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of larger materials performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

Find additional disclosures regarding the non-GAAP financial measures discussed on today's call. Our press release issued this afternoon.

Our filings with the SEC each of which is posted on our website.

The webcast of this call will also be available on the Investor Relations section of our company website.

With that I'll turn the call over to rich.

Thank you Ashish and thanks to everyone for joining us today for today's presentation, we will be referring to the slides were posted to the Investor Relations section of our website earlier. This afternoon I will start by reviewing Q3 highlights and discuss important industry announcements and provide a commercial update I will then turn it over to John who will discuss construction progress on origin, one in Oregon.

Nate will wrap up with a financial overview, we will begin on slide three.

We continue to make steady progress against our strategic initiatives first we were pleased to complete installation of the key production modules that origin won six months ahead of our plan announced in April 2021, and.

In addition, we are reaffirming our expectations of the capital budget and production timelines for origin won an origin too.

Second our customer demand has quadrupled since our announcement to become a public company in February with offtake and capacity reservations, increasing by over $700 million since the second quarter call in August to $4.2 billion as of today.

And third we remain well capitalized with $459 million in cash and equivalents on hand.

We reaffirm our expectation that the capital projects for origin won an origin, Joe can be fully funded from our existing cash on hand, and previously indicated traditional project financing sources.

Now I'd like to give a brief overview on the company for those who are new to the story.

Origin was founded with a mission to help solve climate change by enabling the world's transition to sustainable materials. Our patent did drop in core technology economics, and carbon impact have gained the support of a growing list of major global brands and investors, including Danone Nestle waters, Pepsico Ford Motor Company, Mitsubishi guys Chemical Cologne industries.

Prime aloft and Solvay.

Blown industries is a new addition to our growing list of partnerships with major chemical companies, all of whom we view as potential partners and not competitors.

The CPG companies mentioned to publicly disclose their intent to migrate 100% of their current petroleum based P T consumption to decarbonize and recycled materials.

After extensive testing our technology. These market leaders have made significant financial contributions to Oregon, both investors and customers demonstrating their environmental commitment and confidence in our technology. They have signed multiyear uptick of contracts worth hundreds of millions of dollars.

We continue to see strong favorable tailwind for our technology and business model as evidenced by the recent United Nations Climate change conference or Cop 26, the world continues to make commitments and take actions to reduce global greenhouse gas emissions.

Problem, which origin is uniquely positioned to address.

According to a study by the Ellen Macarthur Foundation, the carbon emissions from plastic are wildly underestimated. The study finds that under a business as usual scenario by 2040 plastics could account for 19% of the total emissions budget allowable. If we are to remain below a one five degrees Celsius increase in global warming.

According to another report plastic industry pollution is expected to overtake coal pollution in the United States by 2030 U.

U S plastic production creates at least 232 million metric tons of greenhouse gases. According to the report with another 55 million tonnes expected by 2025, if the 42 plants currently planned or under construction in the U S come online.

It is beyond a doubt that with more than 99% of plastics made from fossil fuels, we need to dramatically transform the way the world produces and uses of plastic as fast as possible.

With our first product origin operating entirely circuit or plastic solution, 100% recyclable P T.

It's the world's plastic recycling infrastructure is already designed to collect sort and reuse with the critical added benefit of removing C O two from the atmosphere.

We believe that making P D plastic from sustainable wood residues as a unique and powerful solutions that meet the most pressing environmental challenges of the day with.

With over one fifth of the world's largest public companies committing to zero carbon mandates to help tackle climate change we expect the strong demand environment to continue and remain well ahead of our projected supplies for the foreseeable future.

Turning to slide four we continue to make steady progress commercializing the business and have grown customer demand by more than $700 million since our second quarter earnings call for a total of $4 $2 billion of off take agreements and capacity reservations more than quadrupling over the last nine months.

Moving to slide five we recently announced a strategic partnership with Cologne industries to industrialize advanced carbon negative chemicals and materials Cologne industries, a global leader in chemicals and materials.

Your capacity reservation agreement to purchase sustainable carbon negative materials from origin.

Those materials include novel polymers and drop in solutions for select applications with an initial focus on automotive applications.

The partnership includes development work aimed at commercializing polyethylene, if you're on a weight P. F. A polymer with an attractive combination of performance characteristics for packaging and other applications, including enhanced barrier properties, when compared with polyethylene Terephthalate P T.

Ability and other qualities.

Or just the technology platform is expected to produce cost competitive sustainable carbon negative F. D C. A T.

Primary precursor to P F.

Cologne industries has deep expertise in novel FTC, eight based polymers, including P F.

We're thrilled to work together to enable our shared vision for a net zero material economy.

Our partnership reflects both companies' commitment to sustainable innovation, including in the automotive sector.

Additionally, last month, we announced that we joined the dry plus platform, which is a group of 11 of the world's largest automotive manufacturers, including Volkswagen Daimler Ford still want us and Toyota Motor Europe, among others aiming at further developing sustainability, along the automotive supply chain.

This partnership will allow us to collaborate with drive sustainability partners on raw material standards carbon neutrality and other key sustainability topics in the automotive supply chain.

This drive plus partnership expands our existing strategic relationships within the automotive sectors, including Ford Motor Company, Mitsubishi guys chemical and Solvay.

We expect our zero carbon chemicals and materials platform to be deployed across a diverse array of mobility applications, including fabrics plasticizers seat foams engineered polymers tires and hoses to name a few.

During the quarter, we also announced our partnership with the alliance to end plastic waste, which includes industry leaders across the plastics value chain working toward a common goal of developing deploying and scaling solutions to help end plastic waste in the environment.

In addition to exciting customer and partnership announcements this quarter, we announced the origin materials was awarded the sustainability leadership award by the business Intelligence Group's 2021 Sustainability Awards program for our patented category, leading breakthrough technology built around converting low cost non food feedstock and to decarbonize the supply chain ready material.

Yes.

With that I would like to turn it over to John who will provide an update on origin won and origin too.

I'll begin on slide six and provide an update on larger one urgent care first since selecting warranties and I'm sharing partner in Q3 2021 origin has updated its payment schedule fortune one after incorporating detailed feedback from equipment suppliers and contractors, while reaffirming the total Oregon, one project budget and schedule. Additionally.

Origin is reaffirming the previously disclosed capital budget and production timelines for Ultrashape.

How about just continue to include substantial contingencies for unfortunately as.

As is appropriate for a project of this size and say.

We continue to monitor our construction costs and time to assess the impact of the macroeconomic movements, such as inflation and supply chain disruption and while we have seen the escalation of costs, an extension that schedules for more commodity items, such as carbon steel vessels electrical equipment, those escalations and extensions remain inside of our previously disclosed budget and off the critical path for the original one schedule.

And one we expect to incur capital cost later than our prior projections, but we continue to expect the construction borger and wanted to be completed by the end of 2022, the lifting and installation previously fabricated keep production equipment modules was completed in October 'twenty or 'twenty. One six months ahead of our plan announced in April 2021, and two months ahead of the accelerated schedule.

We announced last quarter.

As such we expect piping fabrication to begin by the end of Q1 2022.

One quarter ahead of our prior schedule.

For those that arent deeply embroiled in building and operating plants during their day job. There's a significant amount of piping electrical work that goes into construction plant that they start I like to think of it as the vascular system of the plant and then that analogy, perhaps the pieces of the process equipment of the Oregon.

Notably the actions that will allow us to move that fabrication forward or a combination of our internal team and contractors in Sarnia, Canada, working together to identify and capitalize on an opportunity presented by getting the module definitely. This result comes from good engineering, Good project management and good crosswalk, all working together as a team.

Additionally, the end Con evaporator module installation is expected to be completed by the end of Q4 2021 more than three months ahead of schedule as we previously expected to receive the edcon modules by the end of Q1 2020.

The uncut evaporator module system by the way, it's used for recovery and regeneration of the aqueous phase of our properties are standalone, but important part of how we recycle water in the plant.

As you can see while we've made significant accelerated progress on origin. One by the installation of key production modules are moving ahead with certain key milestones to be prudent we're still maintaining our overall schedule for completion by the end of 2022.

Similarly origin two remains on track for completion by mid 2025, we've appointed warranty is our <unk> engineering partner further we are working with Warley, Deloitte and Fisher to select the site for origin to which we expect to choose by the end of 2020, one and announced in Q1 2022 in line with our prior forecast.

Short listed three finalists and we are currently conducting our final diligence negotiations for each sites one of which we have purchased an option on.

And are diligently includes things such as environmental engineering and workforce to inform our final decision.

We remain focused on adding a hair's in capital projects personnel as the planning and construction of order to proceed.

On slide seven as you can see there's a before and after image of the concrete pad in a completed module installation we have the concrete pad present for our last earnings call, but we've now taken the modules, which were on a different part of the site brought them over lifted and placed the modules on the foundation and both of them down you can see there are 14 vertical modules and to us that's having to hoard it.

Auto modules, which you can see and on the 17th module that is quite a bit smaller sitting next to the two horizontal module.

You'll note this patients between the modules are you connecting beams, which provide sure support but there isn't much connecting module to module.

That's where the piping and additional interconnecting steel and walking platforms will go with.

The second thing to look for will be the piping connecting the modules to the tank farm the process building and the rest of the site.

<unk> electricity and cooling water will be supplied to Dr. Wang CEO site infrastructure. So it will be connecting all of that to the pipe racks that you can see behind the modules.

I'll also take a moment to point out a few other aspects of the site that have changed on slide eight you can see that we've put in place the foundations for the tank farm.

Tank farm to the fluid storage for the site and will contain solve an intermediate materials of course final product we bought.

And included a <unk> model of the tank farm in an overlay to give you a sense of what it will look like once it's finished.

Slide nine you can see progress on the process building, which houses a few pieces that aren't in the production modules and again you can see that we have poured foundation. We've also included models on an overnight.

What this all means I think we were significantly out of the ground, which is very important in the Canadian winter on surprisingly frozen ground is a lot more challenging and working and consequently, we can get through the winter or much more productively than we'd originally expected.

On Slide 10, you can see one of the module less these are all incredibly impressive which ideally synonymous with boring.

<unk> used the 500 ton mainframe and 150 kind of tailing Craig in tandem the 510 credits in the past we've got to hold the majority of the module weight, but if you want the transition from horizontal or vertical to be controlled that's where the second ranked from Jack.

This is all a great example of slowing smooth smooth is fast.

And it wasn't extremely well Frank.

All planned left safely and tenant coordination there, we're moving modules over getting them rigged up lifting them setting them down all the way through people in Sarnia really know what they're doing I can't say enough. Good stuff about the engineers to local contractors and starting out the tradesmen and of course, our project and construction management team.

They set the standard for what good is supposed to look like.

On Slide 11, you can see what happens with the modules are positioned before final placement here of the module is held up by the crane and as they're coming to final position you can see these craftsmen positioning the module by hand over the anchor malls generally speaking.

For the module placements about a half inch up across between 16 and 24 boats. Each of these modules wait about 70 times plus minus and as a consequence theres a lot of work and planning that goes into that as a measure of lots of times cut once.

On Slide 12, you can see all the modules up and some of the claims we used in module placement as well altogether, we had an incredibly successful launch of installation about six months ahead of our plans announced in April 2021, and we can continue to expect the construction of board wanted to be completed by the end of 2022.

And with that I'll turn it over to Nate to discuss some of the financial details.

Thanks, John.

I'll begin with some commentary on our third quarter results provide a financing update for origin to and finished with our 2021 outlook speaking to slide 16 third quarter operating expenses were $7 1 million compared to $2 million. During the same period in the prior year adjusted EBITDA loss was $5 7 million for the third quarter compared to a loss of $1 9 million in the prior period.

And finally net income was $27 9 million for the third quarter compared to a net loss of $3 1 million in the same period in the prior year.

Turning to our balance sheet origin ended the third quarter with $459 million in cash and cash equivalents.

We are pleased to reaffirm our expectation fully funding the construction of both plants using our existing balance sheet cash and cash equivalents and previously indicated traditional financing sources, leading financial institutions that have expertise in financing similarly sized capital projects continue to confirm that our financing assumptions for origin to a reasonable and executable.

As discussed previously, we anticipate having approximately $100 million of excess cash.

The capital budget for origin, one and working to for any unforeseen contingencies. In addition to contingencies already included in our capital project budgets.

Finally, we have received many questions on inflationary pressures as John mentioned earlier, we are continually updating our cost estimates in real time based on the current inputs. We've received from vendors and suppliers I'm pleased to report projected construction costs are still within the overall capital budget dropping.

Wrapping up with our full year 2021 outlook, we continue to expect an adjusted EBITDA loss of up to $25 million cap.

Capital expenditures are expected to be approximately $45 million, which is less than our prior outlook due to payment schedule refinement since selecting an engineering partner that said consistent with John's overview and update on our construction progress of origin won an origin too I would reiterate the refinement of our payment schedule has no impact on the total capital expenditures in the.

So construction progress is on schedule with that I'll turn it back to rich for closing remarks. Thank you Nate I would like to close by thanking our customers for their commitment to Oregon, our team in construction and engineering partners for their contributions to our company's success and our shareholders for their continuous support and with that thank you everyone. We appreciate your time today I would like to.

I ask the operator to open the line for questions.

We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.

We will pause for a moment as Congress trying NICU.

Yeah.

The first question is from Frank Mitsch from Fermium Research. Please go ahead.

Hey, good morning folks and congrats on the progress on Oregon, One really enjoyed looking at the pictures and also was struck by all.

The site selection on origin to you noted that you're down to three can you talk about just in generalities, what sort of tax incentives you may have received.

And in that process.

Sure.

Frank This is Nate Wally.

First just just remember the.

The tax incentives and state and local.

Government support are all comes to.

During site selection and once the site is has.

Ultimately been selected so we don't have anything to concretely report at this point, but look forward to continuing to update everybody as we make it through site selection.

Investors should anticipate that you are getting some some a fair amount of government support I would imagine absolutely.

Okay, Alright, terrific and look forward to Oh, two more there and you know obviously congrats on the on the upsizing of the other contracts up to over over $4 billion and you announced the you announced the adventure with Cologne industries and.

And one of the areas that Youre looking at is getting to P. E. F. I was just wondering if you have a timeline or just in generalities you know how do you envision that that partnership.

<unk>.

Yeah. Thanks, Frank this rich I'll start and maybe.

John can add but.

We're excited to partner with Cologne, a leading Korean chemicals and materials company for those that may not be familiar with it and.

It's a meaningful partnership in terms of.

Contract to buy materials, but also as you mentioned to do development work and then commercializing P F.

As a polymer with a very attractive combination of performance characteristics for packaging and other applications.

Hans barrier properties Degradability other qualities and we really think of it as the next generation P. T and Columbia is very deep expertise in novel <unk> based polymers, including PFS. So we are excited to partner with them on this next generation material.

Great I mean is this something.

Sorry go ahead, John sorry.

Oh, Yeah, no problem I was just going to say hey, Frank I think from our perspective.

P E episode incredibly interesting Palmer and a key with <unk> is that it's it's just had.

Too much cost baked into the process of producing it and our view is that with our platform. We can not only bring their carbon footprint down for Apollo I'd like to yes, as we can just like with P. T. But we can also bring the cost of producing PDF weighed down by by supplying our intermediates into that process.

Yes.

Got you well impressive progress folks keep up the good work. Thanks.

Thank you.

The next question is from Steve Byrne from Bank of America. Please go ahead.

Yeah. So I was interested in the <unk>.

This $4 2 billion of.

[laughter] capacity.

Reservations and so forth can you talk any more about is.

Is that over a certain number of years is that.

See enough based how much of it is based on tolling all the way to P. E. T can you provide a little more.

Color on exactly what is that.

Sure. Thanks, Steve This is rich I'll take that one so the $4 2 billion is really an apples to apples number with the three 5 billion that we have.

Bounced in August and the 1 billion, we had back in February and so it's a it's the cumulative value of our contracts that include capacity reservations.

And off take agreements and capacity reservations for those who haven't heard US explained it before or really letters of intent that include product quantity. The price the duration there approved at the highest levels of our customers and frequently issued joint press releases and that didn't get.

It was time to convert that capacity reservation into a take or pay contract, which has a much longer document and is primarily to support the project lending on the plant.

But at this time, we're not providing more details in terms of.

The $4 2 billion is allocated across plants or or products.

And the <unk>.

The facility you're building in Oregon, one will produce CMS my correct on that and can you give an update on.

The selection of the tolar that can convert.

All the way the para xylene and R to P E T.

Yeah, Steve Thanks for the question, Yes, you're right the facility that we're building for one one is really principally producing CMO.

The intent there as and.

I think we've talked about before but it bears repeating is the agenda with origin. One is really to produce CMS at quantity. It's enabled us to go.

Develop applications other than P. T. So it's really going to.

That variety of applications that are sort of performance improved applications. So that's everything from and we've listed some of these sort of illustrative of areas in our presentations before but things like surfactants.

Other polymers there are lots of different areas here and so as a consequence, there is not really one tolling facility.

At least that's the way we think about it right now with the way that the applications are working out it's not really one single tolling facility that is the critical tolling facility.

If you're if you're making surfactants for example, that's a different sort of a structural tolling and equipment. That's required in order to process CMS into surfactants, then it would be to make a polymer and some sore it depending on the power of course, and so there's sort of a network of these you know obviously, we have some intent with the initial material.

Made we're not we're not going to try to boil the ocean right off the bat with one.

So we have strong intent there we are to the point that we're starting to disclose sort of that supply chain specifically.

But we do have a really really good idea of exactly how we would like to do that and we have that we have active relationships with the parties in that supply chain.

We think will provide the first products coming out about one so SaaS.

It's quite well developed it's just not something we're disclosing it.

And any additional color on the.

Our contracted demand for H T. C that you have coming out of origin won.

Any new.

Uses for that product that are being explored.

Yes, Steve Great question about our HTC product as I mentioned, we're not breaking out the $4 2 billion into its constituent products and plants, but what I will say we continue to make.

Great progress with with HTC.

And working with partners across across various applications that we've talked about in the past including.

Fuel source as a carbon black replacement.

And those kind of application. So we continue to make good progress and feel so good about our HTC product.

Okay. Thank you.

Thank you.

As a reminder, it is star one to ask a question.

The next question is from Eric Stine from Craig Hallum. Please go ahead.

Hey, guys. Thanks for taking the questions.

So.

So.

Just thinking about the capacity reservations just curious somebody is obviously the off take agreements as you said much larger documents, but.

So your reservations.

<unk> also are pretty involved.

There anything and I don't know if you can give a blanket statement on this or not but is there anything that would trigger that moved from a capacity reservation to an offtake whether it's.

You get you get enough, you'll get a certain amount closer to whether its origin won or origin to coming online.

Or just anything that might help that moved from one category to the other.

Yeah, Great question. So the there's a few catalysts, but certainly too to really secure the materials and so to take that letter of intent.

To have firm take or pay contract.

Is the ultimate way the customer has.

We will be receiving those materials.

And as our as our plants continued to so rapidly and we continue to believe that will be be sold out.

By the end of next year on both plants.

There is a real catalyst for customers to convert those contracts.

Got it okay. That's helpful.

And you mentioned that you think you'll be.

Oh by end of next year sold out.

Even advance in advance of that as some of your customers clearly are global.

Any thoughts or are you still are you to the point, where you're potentially starting to fill up plants free and planned for.

So what I can what I can tell you about that is that we are and have been for.

For for a while now taking orders on origin three.

And and will certainly you know we have.

And just full intentions to build origins three four or five plus so we will keep.

Entering into contracts with customers.

We as they are.

Demand for our products and is the pricing.

<unk> meets or exceeds our our financial forecasts and that's our that's our game plan.

Gotcha.

Maybe last one for me and this is just kind of a.

Something for me to clarify, but I mean is your goal or does it make any sense to keep any of the any of these plants. Some of the volumes open for spot sales.

Or is that just not how this industry works and you would really want to have everything under contract.

Yeah. It's a good question I mean, the primary thing we think about when we say sold out its sold out to support project financing.

And so there can frequently be you know call it 10% to 20% of a plant that would be.

<unk> still available and still somewhat flexible, but what we're focused on is selling out the vast majority of the plants support the project financing on the construction schedule and to keep doing that.

Okay. Thank you.

Thank you.

The next question is from Bob <unk> from Goldman Sachs. Please go ahead.

Hi, This is Emily <unk> on for Bob. The first question I wanted to ask is and which end markets does origin seed the voucher them for future growth opportunities right now.

I am really it's rich.

Question just.

Just to give everybody some context for the end market journey, we've been on back in February our $1 billion of orders were entirely in the packaging space and <unk>.

Today.

With $4 2 billion and we have customers in the apparel space and in the automotive space and industrial space and our pipeline goes goes well beyond that.

So I can I can tell you that we continue to think that the apparel and textile space is very promising for us.

The automotive space is also an incredible win for us.

We announced our drive plus partnership.

This quarter, we announced our partnership with clone in our previous partnerships with Ford in Solvay, which are.

Automotive focused.

The automotive industry tries to decarbonize transition to sustainable materials and remove waste from their vehicles. There's just an incredible opportunity for us there, but our pipeline includes cosmetic companies and toy companies and.

Companies from from really across a wide range of industries that we continue to see a lot of a lot of engagement from.

Okay great.

And one more question from me are there any scenarios that you can see right now where Oregon, one could actually start up ahead of schedule.

Yeah. Thanks.

John I think you know what we're looking at is even though we've hit a couple of milestones early right. We've got the module is lifted and it place early.

We're anticipating continuing to push for the winter right I think we're making really good progress on that project, we wanted to be prudent and at this time I don't think were ready.

Ready to say that we're going to be delivering early on origin won.

But we really do feel like by getting some of these milestones out of the way. It just takes a lot of risk off of it right. It just lets us feel really comfortable that we're going to deliver that.

Hi, pretty easily on time I think.

Yeah.

That's helpful. Thank you.

The next question is from Pavel <unk> from Raymond James. Please go ahead.

Thanks for taking the question you referenced the.

Commodity inflationary pressure with regard to you know steel and in the other.

Construction aspect.

If we kind of flip that around to think about the commodity inflation across the petrochemical value chain, but at the same time biobased feedstocks as well when you kind of net those things out.

Are you seeing more appetite from purely from an economic perspective.

From the food and beverage manufacturers for example.

Yeah, Bob This is rich I would say the customer demand we feel it.

It feels like it's on sort of a fairly steady.

And.

Increase in terms of demand and it actually it feels in many ways more macro than recently.

Recent changes in inflation or supply chain disruptions or stuff like that it really feels driven by these companies commitments to reach net zero in 2030, 2040 and to transition their materials from fossil based feedstocks to sustainable ones and so we're really working with them to solve these sort of big.

Challenges that they have.

And and it.

It feels like the urgency keeps getting.

More urgent and the willingness to engage in and work on this but it doesn't it doesn't really feel sort of directly connected with recent changes in inflation or supply chain or things like that.

Okay, Yes, that's very clear.

That's better.

Is there anything in there that is.

Relevant to origin either from the.

The advanced manufacturing tax credit perspective or.

On the demand side of the equation in terms of the actual product.

Yeah. It's a good question, maybe I'll zoom out and just talk about our regulatory efforts overall. So we don't have any specific insights on legislation to share at the moment, but we've been very encouraged with the growing wave of legislation build back better than others.

Federal state and local levels here in the U S and around the world and we are.

Becoming more active in this area and so we're closely tracking the relevant legislation.

Our initiatives around the world and you know many of them do include substantial investment in production tax credits grants subsidies. There are also some that include excise taxes imposed on fossil based plastics.

And you know other other various regulatory schemes that would drive people towards our carbon negative nonfossil technologies. So.

But we are optimistic that the build back better legislation will.

It will be beneficial for us as well as the reduced act, which is a legislation that would impose a 20 cent per pound tax on certain Virgin fossil based plastic.

Okay.

Last question on one of the things Thats happened since then.

The call three months ago is the reelection of.

The.

Labor or Liberal government in Canada, where of course, Oregon, one is located.

Anything from <unk> does.

Still action agenda.

That is again to rack.

Relevance to.

Your operations there.

Okay.

Yeah, It's a good question.

We haven't seen something that it is.

Directly relevant to our Canadian operations at this point.

Generally speaking I would say the Canadian government.

Pretty consistent.

Not always.

Yeah, I won't comment on whether it looks consistent from the outside are different perspectives, but from our perspective, it's always felt like a pretty consistent push for.

Renewable.

Allergies and and.

Hey.

It's been a friendly environment for us through.

Multiple many years of operation. So we're pretty pleased with that both the local state and federal government behavior, let's say and interactions with that with us in our operations in Canada.

Thank you very much.

Thank you.

This concludes the question and answer session as well as today's conference call. You may disconnect. Your lines now thank you for participating and have a pleasant day.

Okay.

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Yeah.

Yeah.

Yeah.

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