Tom Jensen: 0:03

We need to cut CO2 emissions by 50% by the end of this decade i.e. In less than eight years. And it's impossible without massive scale up of renewable energy. And with massive scale up of renewable energy, you need massive storage solutions to balance out that

Tom Raftery: 0:22

Good morning, good afternoon, or good evening, wherever you are in the world. This is the climate 21 podcast. The number one podcast, showcasing best practices in climate emission reductions. And I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice, to be sure you don't miss any episodes. Hi everyone. Welcome to the Climate 21 Podcast. My name is Tom and with me on this show today, I have my special guest, also Tom. Tom, welcome to the podcast. Would you like to introduce yourself?

Tom Jensen: 0:56

Yes. Hi Tom. It's a pleasure to be here of course. My name is Tom Jensen. I'm the co-founder and chief executive officer of Freyr Battery. Norway's leading clean battery solutions initiative. Pleasure to be on this call.

Tom Raftery: 1:08

Okay. And when you say clean battery, Tom, what do you mean by that?

Tom Jensen: 1:14

So what I mean by that is batteries and lithium ion, batteries, maybe in particular is becoming the core enabler in our opinion for the energy transition that we are in. That means that having. Lithium ion batteries produced in the least carbon intensive manner as possible to both decarbonize the transportation sector, which for many is obvious, electric vehicles tend to at least move the exhaust pipe. But also lithium ion batteries as a core enabler for decarbonizing energy systems is what we mean by that. And what we mean by clean battery solutions into that backdrop is that the batteries themselves need to be produced in the cleanest manner possible, meaning lowest possible carbon footprint along the entire value chain of producing the battery. Because if we are putting batteries into a vehicle that are produced using coal, and if we charge these vehicles with coal based energy, we're just moving the point of combustion away from the vehicle to another facility or to another location. And as we all know, the atmosphere tends to, disregard where CO2 emissions come it doesn't really matter as long because it kind of tends to disseminate in the atmosphere so that, you know, we're all impacted by it. So it doesn't really help if we move the CO2 emissions from a vehicle in Germany to a coal based power plant in China. So that's kind of what we mean by clean battery solutions.

Tom Raftery: 2:45

Right. And for lithium ion batteries, a lot of people talk about the fact that they do have a high energy footprint to manufacture them, and so, an EV for example, has higher embedded carbon in it than an internal combustion engine vehicle. And you often hear people decrying EVs because of that. So this is one way of overcoming that?

Tom Jensen: 3:09

Yes, absolutely. And I, do understand that that is something that special interests have a tendency to focus on. And that's why I just want to sort of underline that it's not sufficient to decarbonize the transportation sector. You also need to decarbonize the energy going into the transportation sector. And that's why when you move to a rechargeable solution when you actually recharge those batteries that energy needs to be clean. And of course everyone understands, or I dunno if everyone understand it. Sometimes when you read newspapers and listen to people in media, you tend to sort of think that they really don't get it. But we need to triple electricity production. We as a species, right over the next coming decades to satisfy the energy transition. That electricity increase requires than a 20 folding or more of renewable energy production relative to where we are today. And if you're 20 folding solar and wind, which are the predominant carriers for that renewable energy, which are intermittent power sources, you're gonna put a lot of stress into the current energy systems, which are based on base load coal and gas, and nuclear, and to some extent hydro. And that's why you're gonna need batteries to store sunlight when the sun isn't shining and store wind when the wind isn't blowing. But on top of this, You need a lot of additional services, frequency regulation, peak shaving, all of these different things that batteries can provide to provide what I label stress relief for grids that aren't designed for intermittent energy. So, yes, the criticism around the whole carbon footprint, along the value chain of a battery is correct in the sense that we are producing the materials and the batteries themselves today with too high carbon footprint in it. But that's because the energy systems aren't decarbonized and we need to do both. And Clean Battery solutions can be a core catalyst for both of these things. And what we then need to do again, we as Homo Sapiens we need to just replicate clean battery solution facilities all over the world, many, many, many, many times over. That's why Elon Musk and others are talking about, not Gigafactories anymore, but Tera factories, right? We need to get to the TeraWatt hour level of battery solutions and Freyr aims to play a significant role in this regard.

Tom Raftery: 5:35

Okay. And how are your batteries cleaner than anyone else's?

Tom Jensen: 5:41

Well, first of all, our first gigafactory will be in northern Norway in a location called Mo i Rana. It's halfway up the Norwegian, country even though we label it as Northern Norway. It's in an area called N oh four, the sort of fourth energy district, if you like, in Norway. And there is about 6 TWh hours of surplus energy in the area. And all of that energy is renewable. So that energy is both renewable and actually very competitively priced. And we've secured a 10 year power purchase agreement with Statkraft. The largest power company in Norway and the largest renewable energy producer in Europe. So we have probably the most competitive power prices going into our planned gigafactory in northern Norway. And by just using renewable energy in the production of the batteries, we aim to produce. We will reduce the carbon footprint by 30 to 40% compared to global averages. What we're gonna do on top of this is that over time we will localize and, or regionalize maybe is a better word, and decarbonize the larger parts of the supply chain going into the production of the batteries. Today, most of the active materials anode, cathode, electrolytes, separators, copper foil, all of these different things. Most of it. All key ingredients in producing a battery. Most of it are today produced in Asia, and most of it using a non-renewable energy as the energy carrier when producing it. But if you then localize that in an area where you have renewable energy and to boot that, that renewable energy is more cost competitive, you have the double sort of impact of both reducing the cost of producing the battery as energy is a very large fraction of the cost of producing active materials. And you take out the carbon footprint in the active materials themselves. So our footprint or ambition is to reduce the CO2 footprint initially by 80% relative to global averages. That means 60 kilograms of co2 per kilowatt hour battery produced, and as we are aiming to produce millions and millions of kilowatt hours, when you add all of that together, it actually has a meaningful impact on the CO2 reduction. Ultimately we want to get to zero and not net zero, but absolute zero that there is absolutely no CO2 emissions along the entire value chain of producing the batteries. That is probably going to take us a little bit longer. But in the sort of 2030 timeframe, we should be in position to be able to argue that we've created fully circular, fully decarbonized, fully recyclable value chains for clean battery solutions. And we have to be able to get to that point cuz the world depends upon it.

Tom Raftery: 8:32

Right. Okay. Just circling back to something you said there, if, if I heard correctly, you said there's six terrawatts in that part of Norway you are in of clean energy surplus to requirements. Is that correct? And.

Tom Jensen: 9:18

correct.

Tom Raftery: 9:19

How, how does that happen? How is there six TeraWatts of surplus energy?

Tom Jensen: 9:25

Well, so, so first of all, Tom, this is kind of average, right? Over many years, the average surplus, right? So certain years it might be deficit, right? But not, a lot of deficit. And it's just been a large influx and large development of hydropower in the area, and now also select onshore wind farms. There's also been interconnections now established to Sweden and Sweden. In northern parts of Sweden, there is much more aggressive, let me put it that way onshore wind farm developments. So in the area, the geographical area, as such there is a lot of development on clean energy solutions. There's obviously also. A lot of plans on establishing energy intensive industry in the area. So this surplus won't be there for long. If you add up all of the plans for different initiatives, including green steel and, and other sort of energy intensive industries and aluminium production and so on and so forth you rapidly get into a deficit situation. But right now, and one of the reasons why we located ourselves there, is the current availability of surplus energy. And north in Norway is connected to the south through a north, south grid connection. But as you know, when you transport electrons over large distances, the efficiency of it is, quite poor. It means that you lose a lot of that energy if you transport it south, and therefore finding ways in which to use it locally and or upgrading the grid is kind of the two things that could do something with that surplus situation. Now from a energy intensive producer, of products point of view. We kind of like the fact that there is a power island nature of the energy in the area because that, brings lower costs on top of the sort of green nature of it. But that's a little bit the backdrop for it. So, you know, Norway has been very good at developing hydropower developments since basically 1900 ish. Right? So Norsk Hydro one of the larger industrial companies in Norway established in 1905, and where many of the people in Freyr actually come from professionally, started out by leveraging hydropower in mid parts of Norway for fertilizer production. And then of course Hydro went on to become an aluminum producer, which is energy in fixed form, many, many claim. And then of course Hydro became an oil and gas producing company as well. So a large project execution, operational excellence experience, but all of it, it's started with hydropower so that we are now taking steps as a company based on the proud heritage industrially into clean energy battery solutions very energy intensive value chain is a very natural and important step for Norway to make. And again, we are happy to be the leading initiative on that in Norway, at least at present.

Tom Raftery: 12:17

Okay. And you mentioned two main pathways. So you mentioned transportation and you mentioned greening the grid as two potential customers or potential markets for your batteries, do you have a preference for either or are you pretty agnostic on where they're used?

Tom Jensen: 12:36

principally we are agnostic and we are targeting both market verticals over time. But we have initially, focused our efforts into the energy storage market. There aren't very many battery players who are doing that and our technology solutions are particularly suited for energy storage applications. So that's typically for our storage. For our charge discharge kind of solutions with lithium iron phosphate type cathodes, right? So not the high nickel cobalt containing batteries, but iron phosphate type batteries which are safer and also lower cost. And therefore the total cost of ownership or the levelized cost of storage or whatever sort of acronym you'd like to use on it becomes that much more competitive. We are going to produce batteries that last for more than 7,300 cycles, basically, meaning charge discharge for four hours every day for 20 years. And, and that creates a very competitive sort of solution given that we're also using very low cost electricity and we're using a technology that allows us to build larger and thicker electrodes, so initial focus on energy storage applications, but then we think, and we're quite convinced that we can be able to optimize those solutions and scale them let's call it down to automotive applications because again, our technology platform, based on 24M technologies out of MIT in Boston is a highly space optimized and highly efficient way to produce batteries using the same raw materials that go into conventional battery production. So you will see us focusing on the energy storage market continuously, and you will gradually see us take positions also in the commercial vehicle and ultimately personal vehicle market because our technology is also suitable for that. It's just that the benefits of that technology is much, much greater for the energy storage applications, but also has an advantage on on automotive applications. But there's only so much we can do in the start. So we, you know, steady as you go and grow, as we say, we hurry slowly. Yeah.

Tom Raftery: 14:57

Okay, great. And you mentioned about, you know, regionalizing your supply chain, but does that also mean that you'll move beyond Norway yourselves and put Gigafactories in other regions, or are you sticking to Norway?

Tom Jensen: 15:11

No, No, absolutely. We we see that our customers as point number one they require increasingly, to have supply chains of their products regionalized. This is critical energy infrastructure because batteries will be an important part of the future energy system and the future energy mix, and I don't think the current global environment is very conducive to further degrees of globalization, at least not currently. I don't think, you know, the United States and Europe as kind of two regions, they don't want to rely too heavily on China and or other countries rather than sort of having regional supply. So we have taken, and we've seen that of course in our customer discussions, more than a hundred of them that we're having. We already signed up our first legally binding, customer agreement with Knee Deck Corporation. So that's a Japanese company that are targeting energy storage applications in both Europe and the United States, and we will be supplying them with batteries for the European roll out of energy storage from our Norwegian facility. So that is one example of a region regionalized kind of solution. The energy storage customers that we've already announced that we have in the United States would want us to produce our batteries in the United States. Therefore, we have established a joint venture with Koch Strategic Platforms, which is subsidiary of Koch Industries. And we are, we have just finalized our site selection process in the US and we will in the not so distant the future be announcing where we're going to build our first gigafactory in the us and that facility will then supply our US customers. We've also secured acreage in Finland for gigafactory developments there. That is of course inside the European Union and Norway, albeit a member of the European economic area is still outside the European Union. But from a European supply point of view, we do think that Norway and Finland are two sides of the same coin, but the demand and the need is going to be quite massive. So therefore having a couple of production locations in Scandinavia for supplying the European needs seems very logical. And it's also the area that are the most advanced, in particular on electrification on the vehicle side. And now gradually they will, have to increase the tempo in the renewable energy transition unfortunately helped a lot by the Russian Ukrainian crisis and the sort of energy atrocities that are beyond the sort of human atrocities. All of this issue with attacks on infrastructure, et cetera, is just creating a very strong, albeit negatively sort of charged impetus for accelerated localized energy solutions, including storage. So there's a long winded way of saying that we're gonna need to build a lot of storage. We're gonna need to accelerate deployment of wind and solar. We're gonna need to decarbonize the transportation system and we cannot rely on supply from Russia, supply from China, and I don't think we want to because it's too risky given the differences of opinion of what is acceptable and not. Yeah. so that's a little bit how we're looking at it. So you should see Freyr both producing batteries locally and establishing the processing of minerals and metals to the active materials we need for producing batteries. Also locally and if possible, co-located in sort of larger industrial, let's call it systems, so that we can benefit from synergies between the different industries, minimize logistical costs, do just in time type of production systems, and so on and so forth.

Tom Raftery: 19:01

Okay, and you made reference earlier to circular economy and getting your footprint down as close to zero as possible. Does this mean that you will start recycling batteries as well?

Tom Jensen: 19:13

Yeah, absolutely. So many sort of have a little bit of a misguided conception around recycling. Not misguided maybe, but at least a little bit, not so precise way. So the first thing we focus on is what we label process, scrap. So recycling of the initial batteries we produce that don't meet the specifications that our customers require. Every battery producer will have a scrap rate in its production, and that scrap still consists of active materials that are expensive. So to be able to recycle that material back into sort of a new production batch is going to be quite important and is important for everyone. And we are very focused on that, and we, again, have a technology that makes that a lot easier than what the conventional solutions do. So we're quite excited about that. Then of course, as I just mentioned earlier, our batteries are, you know, destined or planned to last for at least 20 years. Yeah. So it's not super urgent for us to sort of have a recycling of end of life batteries in place now, even though we do see the opportunity to take in other end of life batteries from other industries back into our solutions or back into our facilities because recycling metal that has already been, let's say mined and processed and then reusing it makes a lot of sense, right? So we do believe over time as this industry reaches, let's call it some sort of equilibrium or steady state production capacity relative to demand, which we actually think will be in the 20,000 gigaWatt hours per annum level, more than 20 times where it is today. Uh, We think that we can probably move towards 70 to 80% recycled materials, right? But that's kind of 20, 30 years into the future. And this will obviously be lagging the increase in ramp up in production. But yes, recycling is important first and foremost. Process, scrap in the industrial facilities and then recycling existing end of life matters will be important. Increasingly, as you know, the end of life batteries from the initial wave of electrification on transportation becomes available for recycling, and that is now starting to happen in Norway. And as you know, your listeners might recognize, Norway is the country globally with by far the highest penetration of electric vehicles. And we started the journey more than 10 years ago, so actually starting to get a meaningful amount of end of life batteries. But these end of life batteries from EVs are in many instances also repurposed for energy storage applications, right? So of course when you have invested a lot of money and put a lot of capital into producing a battery, you would like that battery to last for as long as possible. So I think recycling plays in a very important role, not only from an economic point of view, but also from an environmental point of view. But I still have some question marks around timing on when it sort of becomes a meaningful number of our materials going into production.

Tom Raftery: 22:27

Sure, Sure, sure. That makes sense. And when will you actually start producing batteries because you're still in ramp up mode, as I understand it.

Tom Jensen: 22:38

That's right Tom. So we, went public on the New York Stock Exchange on the 8th of July last year. We did that based on a reasonably straightforward value proposition that is built up around speed, scale, and sustainability. These are the three pillars, if you like, of our strategy and everything we do is linked to that in some way. If we can't move faster or if we can't increase the scale, or if we can't do it more sustainable, we just don't do it. So 10 days after we went public, we made our first investment decision into our what we label customer qualification plant, and many call it a pilot, but I think that's kind of a misguided name on this because it's much more than a pilot. It's actually an actual industrial scale production line of the batteries that we aim to produce commercially. We will start up that facility around Christmas this year. So, we will be starting to ship batteries to our customers during the first quarter of 2023. We know we're gonna have a lot of headache when we sta scale up that facility because everyone that produces batteries have headache. But we have given ourselves 18 months of training, ground material, testing, operator training. process optimization, et cetera. Before our giga Arctic facility, which is our first commercial scale Gigafactory, which we aim to start producing from in the first half of 2024. So we already started to break ground on the larger gigafactory and poor concrete and so on. So we're preparing in a way, the 80,000 square meter land acreage for a more than a hundred thousand square meter facility. And they will start gradually implementing production lines that are similar in size to the one we have in the customer qualification plant during the first half of 2024. And then we will gradually implement up to eight production lines into that facility. And make that a 29 gigaWatt hour nameplate capacity facility producing LFP based batteries for energy storage applications. So that's a little bit where we are in the rollout of this. So first lithium ion batteries with 24M technology for energy storage applications coming out to a Norway just after Christmas.

Tom Raftery: 25:00

Fantastic. Great, Tom, we're coming towards the end of the podcast now. Is there any question. I haven't asked you that you wish I had or any aspect of this we haven't explored that you think it's interesting for people to be aware of?

Tom Jensen: 25:15

Well, maybe just I think you've asked very relevant questions and I think this is great. I think what is important for me to sort of get across whenever I'm talking to people who are interested in what we're doing is that from a climate change mitigation point of view, decarbonizing transportation and decarbonizing energy systems, probably the most important things we do over the coming decades. And the most mature available technology for doing that is lithium ion batteries. So lithium ion battery is obvious in terms of getting it into decarbonizing transportation, but it's equally important to decarbonize energy systems. Where a very large fraction of the CO2 emissions come from coal based power and or gas fired power plants and so on. We need as a species to stop doing that much faster than most people realize. We need to cut CO2 emissions by 50% by the end of this decade i.e in less than eight years. And it's impossible without massive scale up of renewable energy and with massive scale up of renewable energy, you need massive storage solutions to balance out that. So I would like to sort of say biased as I am, that lithium ion batteries is probably one of the core, if not the core catalyst for the energy transition in the coming decade.

Tom Raftery: 26:43

Sure, Sure. A hundred percent in agreement. Tom, if people would like to know more about yourself or about Freyr or any of the things we discussed in the podcast today, where would you have me send them?

Tom Jensen: 26:56

Well, you can send them to our webpage on www freyr battery.com. And on that webpage, you will see all the relevant contact information and who to sort of get in touch with. We invite everyone who is interested in this space to join us on our journey be it professionals who want to have exciting career opportunities, be it suppliers who want to provide us with cutting edge solutions, be it customers who want to buy the cleanest battery solutions on the planet, or be it others, investors or the like that are interested. In participating in this extremely exciting and, and rewarding not only financially, but also from a purpose driven perspective journey that we're on.

Tom Raftery: 27:41

Fantastic. Tom. There's been really interesting. Thanks a million for coming on the podcast today.

Tom Jensen: 27:46

Thank you, Tom. Pleasure to be here and let me know if I can be of help in any future podcast.

Tom Raftery: 27:51

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about Climate 21, feel free to drop me an email to Tom Raftery at outlook.com, or connect with me on LinkedIn or Twitter. If you like the show, please, don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show Thanks. Catch you all next time.