Innovative fuel quality control process for recycled wood Mark Christensen MSc

 Approx 4.1 million tpa of waste wood in UK (Poyry, 2010) with historic variation of 4.5 to 10.6 mtpa.  Sources: construction (25%), demolition (26%), packaging (27%), joinery/furniture (9%) and municipal (13%). Some unaccounted until the market values it.  Gate fees: Grade £2/ to £15/t, Grade £19/t and £33/t (ESA, 2008 to 2012).  Virgin biomass woodchip selling for ca.£85-100/t to RHI operators, compared to existing Grade A at £30-60/t and Grade B/C at £10/t (once processed).  Technological solution needed to ensure quality, scientific, technical evidence (End-of-Waste status).  Biomass sustainability criteria (EU Regs) not applicable to wastes, so avoids virgin biomass PR risk.

 Automatic sorting of recycled wood grades  Quality control to purities >90% and into Grades  Overcomes industry regulatory constraints  Avoids pitfalls of current practices  Adapts and combines innovations  Unparalleled process spec with Patent Pending.  Modular and replicable business model  Refinance opportunity for quick / partial exit  Deliverable in ca. 4-6 months, target urban areas  The most sustainable and Carbon efficient fuel

 Strategic location to RHI end markets with good access.  Wales has ca. 180ktpa (mainly urban) of waste wood.  45ktpa capacity (25%) with plus Bristol & Birmingham.  Revenues from all metals extraction and two grades of biomass fuels via highly energy efficient process.  Avoids costs of fines (<10mm) and cleaned up for end markets with less Regulatory risks with EA.  Long established partner companies for process design & install. Core team of 5 highly experienced, plus 3 NEDs.  Roll-out plan of 5 sites within 3 years, prior to sale.  Option to expand site(s) into CHP, virgin wood processing, bio-oils, pellet production (£ /t).

 Site with Planning – freehold or leasehold option.  Contractors for supply and off-take at Heads of Terms.  £2.2m of capital needed for process, working capital, fees.  £100k of SEIS to take to financial close (legals, etc).  WAG funding potential for <50% of capex & Finance Wales.  WRAP eQuip underwriting for asset finance (ca. 30%).  BPRA Tax Relief if freehold taken (£3m), subject to details.  EIS potential for <£5m capital project, application drafted.  Project IRRs >18% (20 yrs) with refinancing upside.  EBITDA at ca.£800k p.a. after year 3 (>35% gross margins)  Ca.£2m T/O p.a. with issue ca.£400k of dividends p.a.  Equity funding requirement of £1m for majority stake.