Origin Materials Inc (ORGN) 2021 Q3 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Origin Materials Third Quarter 2021 Earnings Call. (Operator Instructions) And the conference is being recorded. (Operator Instructions)

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 are Co-CEO, Rich Riley, Co-CEO and Co-Founder, John Bissell; and CFO, Nate Whaley. Ahead of this call, Origin issued its third quarter press release and presentation, which we will refer to today. These can be found on the Investor Relations section of our website at originmaterials.com.

Please note that on this call, we will 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 and should not be relied upon as representative about views 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 Origin Materials' performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call, in our press release issued this afternoon and in 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 which were posted to the Investor Relations section of our website earlier this afternoon. I will start by reviewing Q3 highlights, then discuss important industry announcements and provide a commercial update. I will then turn it over to John, who will discuss construction progress on Origin 1 and Origin 2. Nate will wrap up with a financial overview.

We will begin on Slide 3. We continue to make steady progress against our strategic initiatives. First, we were pleased to complete installation of the key production modules at Origin 1, 6 months ahead of our plan announced in April 2021. In addition, we are reaffirming our expectations as to capital budget and production time lines for Origin 1 and Origin 2.

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 1 and Origin 2 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 of the company for those who are new to the story. Origin was founded with the mission to help solve climate change by enabling the world's transition to sustainable materials. Our patented drop-in core technology, economics and carbon impact have gained the support of a growing list of major global brands and investors including Danone, Nestlé Waters, PepsiCo, Ford Motor Company, Mitsubishi Gas Chemical, Kolon Industries, Primaloft and Solvay. Kolon 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 PET consumption to decarbonized and recycled materials.

After extensively testing our technology, these market leaders have made significant financial contributions to Origin, both as investors and customers, demonstrating their environmental commitment and confidence in our technology. They have signed multiyear offtake contracts worth hundreds of millions of dollars. We continue to see strong, favorable tailwinds for our technology and business model. As evidenced by the recent United Nations Climate Change Conference, or COP26, the world continues to make commitments and take actions to reduce global greenhouse gas emissions, a problem which Origin is uniquely positioned to address.

According to a study by the Ellen MacArthur Foundation, the carbon emissions from plastic are widely underestimated. The study finds that under our business-as-usual scenario, by 2040, plastics could account for 19% of the total emissions budget allowable, if we are to remain below a 1.5 degree 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.S. plastic production creates at least 232 million metric tons of greenhouse gases according to the report with another 55 million tons 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 plastic as fast as possible. With our first product, Origin offers an entirely circuit or plastic solution, 100% recyclable PET, which the world's plastic recycling infrastructure is already designed to collect, sort and reuse with the critical added benefit of removing CO2 from the atmosphere. We believe that making PET plastic from sustainable wood residues is a unique and powerful solution that meets the most pressing environmental challenges of the day. With over 1/5 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 4. 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 offtake agreements and capacity reservations, more than quadrupling over the last 9 months.

Moving to Slide 5. We recently announced a strategic partnership with Kolon Industries to industrialize advanced carbon-negative chemicals and materials. Kolon Industries, a global leader in chemicals and materials, signed a multiyear 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 furanoate, PEF, of polymer with an attractive combination of performance characteristics for packaging and other applications, including enhanced barrier properties when compared with polyethylene terephthalate, PET, degradability and other qualities. Origin's technology platform is expected to produce cost competitive sustainable carbon-negative FDCA, the primary precursor to PEF. Kolon Industries has deep expertise in novel FDCA-based polymers, including PEF. We are 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 Drive+ platform, which is a group of 11 of the world's largest automotive manufacturers, including Volkswagen, Daimler, Ford, Stellantis 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's sustainability partners on raw material standards, carbon neutrality and other key sustainability topics in the automotive supply chain. This Drive+ partnership expands our existing strategic relationships within the automotive sectors, including Ford Motor Company, Mitsubishi Gas Chemical and Solvay. We expect our 0 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 that 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 nonfood feedstock into decarbonized supply chain ready materials.

With that, I would like to turn it over to John, who will provide an update on Origin 1 and Origin 2.

Thanks. I'm going to begin on Slide 6, and provide an update on Origin 1 and Origin 2. First, since selecting Worley as an engineering partner in Q3 2021, Origin has updated its payment schedule for Origin 1 after incorporating detailed feedback from equipment suppliers and contractors, while reaffirming the total Origin 1 project budget and schedule. Additionally, Origin is reaffirming the previously disclosed capital budget and production time lines for Origin 2. Capital budgets continue to include substantial contingencies for unforeseen events as is appropriate for projects of this size and phase.

We continue to monitor construction costs and timelines to assess the impact of macroeconomic movements such as inflation and supply chain disruptions. And while we have seen the escalation of costs and extension of schedules for more commodity items such as carbon steel vessels and electrical equipment, those escalations and extensions remain inside of our previously disclosed budget and off of the critical path to the Origin 1 schedule.

For Origin 1, we expect to incur capital costs later than our prior projections, but we continue to expect the construction of Origin 1 to be completed by the end 2022. The listing and installation of previously fabricated key production equipment modules was completed in October '21, 6 months ahead of our plan announced in April 2021, and 2 months ahead of the accelerated schedule we announced last quarter. As such, we expect piping fabrication to begin by the end of Q1 2022, 1 quarter ahead of our prior schedule.

For those that aren't deeply embroiled in building and operating plants during your day job, there's a significant amount of piping intellectual work that goes into construction plants at this sort. I like to think of it as the vascular system of the plant. And in that analogy, perhaps the pieces of process equipment are the organs. Notably, the actions that will allow us to move that fabrication forward are a combination of our internal team and contractors in Sarnia, Canada, working together to identify and capitalize on an opportunity presented by getting the modules up early. This result comes from good engineering, good project management and good crafts folk all working together as a team.

Additionally, the ENCON evaporator module installation is expected to be completed by the end of Q4 2021, more than 3 months ahead of schedule, as we previously expected to receive the ENCON modules by the end of Q1 2022. The ENCON evaporator module system, by the way, is used for recovery in regeneration of the aqueous phase of our processes, a stand-alone, but important part of how we recycle water in the plant. As you can see, while we've made significant accelerated progress on Origin 1 by the installation of key production modules and moving ahead with certain key milestones, to be prudent, we are still maintaining our overall schedule for completion by the end of 2022. Similarly, Origin 2 remains on track for completion by mid-2025. We've appointed Worley as our FEL1 engineering partner. Further, we are working with Worley, Deloitte and Fisher to select the site for Origin 2, which we expect to choose by the end of 2021 and announce in Q1 2022, in line with our prior forecast.

We have shortlisted 3 finalists, and we are currently conducting our final diligence negotiations for these sites, one of which we have purchased an option on. And our diligence includes things such as environmental, engineering and workforce studies to inform our final decision. Additionally, we remain focused on adding engineers and capital projects personnel as the planning and construction of Origin 2 proceeds.

On Slide 7, as you can see, there is a before and after image of the concrete pad and a completed module installation. We had 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 bolted them down. You can see there are 14 vertical modules in 2 rows of 7, 2 horizontal modules, which you can see end on, and a 17th module that is quite a bit smaller, sitting next to the 2 horizontal modules.

You'll note the space between the modules. There are a few connecting beams which provide sheer support, but there isn't much connecting module-to-module. That's where the piping and additional interconnecting steel and walking platforms will go. 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. Steam, electricity and cooling water will be supplied to the Arlanxeo site infrastructure. So we'll 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 8, you can see that we put in place the foundations for the tank farm. Tank farms are the fluid storage for the site and will contain solvent, intermediate materials and of course, final product. We've also included a 3D model of the tank farm, and an overlay to give you a sense of what it will look like once it's finished.

On Slide 9, you can see progress on the process building, which houses a few process pieces that aren't in the production modules. And again, you can see that we have poured foundation, and we've also included models and an overlay. What this all means is that we are significantly out of the ground, which is very important in the Canadian winter. Unsurprisingly, frozen ground is a lot more challenging to work in. And consequently, we can get through the winter much more productively than we'd originally expected.

On Slide 10, you can see one of the module lifts. These were all incredibly impressive, which is ideally synonymous with boring. The crew used a 500-ton main crane and 150-ton tailing crane in tandem. The 500-ton crane is in the back, rigged up to hold the majority of the module weight. But if you want to transition from horizontal to vertical to be controlled, that's where the second crane comes in. This is all a great example of slow is smooth, smooth is fast, and was an extremely well-trained crew, doing a well-planned lift safely in tight coordination. They were moving modules over, getting them rigged up, lifting them, setting them down. It was like butter, all the way through. People in Sarnia really know what they're doing.

I can't say enough good stuff about the engineers, the local contractors in Sarnia, 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 as the modules are positioned before final placement. Here, the module is held up by the crane. And as they're coming into final position, you can see these craftsman positioning the module by hand over the anchor bolts. Generally speaking, the tolerance for the module placement is about half inch across between 16 and 24 bolts. Each of these modules weighs about 70 tons, plus/minus. And as a consequence, there's a lot of work and planning that goes into this. Measure lots of times, cut once.

On Slide 12, you can see all the modules up, and some of the cranes we used in module placement as well. Altogether, we had an incredibly successful module installation, about 6 months ahead of our plans, announced in April 2021, and we continue to expect the construction Origin 1 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 2, and finish 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 of 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 and financing similarly sized capital projects continue to confirm that our financing assumptions for Origin 2 are reasonable and executable.

As discussed previously, we anticipate having approximately $100 million of excess cash beyond the capital budgets for Origin 1 and Origin 2 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. And 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.

Wrapping up with our full year 2021 outlook, we continue to expect an adjusted EBITDA loss of up to $25 million. Capital expenditures are expected to be approximately $45 million, which is less than our prior outlook due to payment schedule refinements since selecting an engineering partner. That said, consistent with John's overview, and update on our construction progress of Origin 1 and Origin 2, I would reiterate the refinement of our payment schedule has no impact on the total capital expenditures, and the pace of 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 Origin, our team and 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 ask the operator to open the line for questions.

(Operator Instructions)

The first question is from Frank Mitsch from Fermium Research.

Congrats on the progress on Origin 1. Really enjoyed looking at the pictures. And also was struck by the site selection on Origin 2. You noted that you're down to 3. Can you talk about, just in generalities, what sort of tax incentives you may have received in that process?

Sure. Frank, this is Nate Whaley. First, just remember, the tax incentives and state and local government support all comes typically 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.

But investors should anticipate that you are getting some -- a fair amount of government support, I would imagine.

Absolutely.

Okay. All right. Terrific. And yes, I look forward to more there. And obviously, congrats on the upsizing of the contracts up to over $4 billion. And you announced the venture with Kolon Industries. And one of the areas that you're looking at is getting to PEF. I was just wondering if you have a time line. Or just in generalities, how do you envision that partnership going?

Yes. Thanks, Frank. This is Rich. I'll start, and maybe John can add. But very excited to partner with Kolon, 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, aimed at commercializing PEF, which is a polymer with a very attractive combination of performance characteristics for packaging and other applications. enhanced barrier properties, degradability and other qualities, and we really think of it as a next-generation PET. And Kolon has very deep expertise in novel FDCA-based polymers, including PEF. So we are excited to partner with them on this next-generation material. Go ahead, John.

Yes. No problem. I was just going to say, Frank, I think from our perspective, PEF is an incredibly interesting polymer. And the key with PEF is that 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 the carbon footprint down for a polymer like PEF as we can just like with PET, but we can also bring the cost of producing PEF way down by supplying our intermediates into that process.

The next question is from Steve Byrne from Bank of America.

Yes. I was interested in the $4.2 billion of capacity reservations and so forth. Can you talk any more about is that -- over a certain number of years, is that CMF-based? How much of it is based on tolling all the way to PET? 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 $3.5 billion that we announced in August, and the $1 billion we had back in February. And so it's the cumulative value of our contracts that include capacity reservations and offtake agreements. And capacity reservations for those who haven't heard us explain it before, are really letters of intent that include the product, the quantity, the price, the duration, they're approved at the highest levels of our customers and frequently issued joint press releases. And that then gives us time to convert that capacity reservation into a take-or-pay contract, which is 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 how the $4.2 billion is allocated across plants or products.

And the facility you're building in Origin 1 will produce CMF. Am I correct on that? And can you give an update on the selection of a toller that can convert that all the way to paraxylene and/or to PET?

Yes. Steve, thanks for the question. Yes, you're right. The facility that we're building for Origin 1 is really principally producing CMF. And the intent there is -- I think we've talked about before, but it bears repeating is the attempt with Origin 1 is really to produce CMF at quantity that enable us to go develop applications other than PET. 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 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 1 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 1 single tolling facility that is the critical tolling facility. Because if you're making surfactants, for example, that's a different sort of structure of tolling and equipment that's required in order to process CMF and to surfactants, then it would be to make a polymer of some sort, depending on the polymer of course.

And so there's sort of a network of these. Obviously, we have some intent with the initial material that's being made. We're not going to try to boil the ocean right off the bat with Origin 1. So we have strong intent there. We aren't to the point that we're starting to disclose sort of that supply chain, specifically. But we do have a really, really good idea, exactly how we would like to do that, and we have active relationships with the parties in that supply chain that we think will provide the first products coming out of one. So it's quite well developed. It's just not something we're disclosing it.

And any additional color on the contracted demand for HTC that you have coming out of Origin 1? 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 I will say we continue to make great progress with HTC. And working with partners across various applications that we've talked about in the past, including as a fuel source, as a carbon black replacement and those kind of applications. So we continue to make good progress, and feel good about our HTC product.

(Operator Instructions) The next question is from Eric Stine from Craig-Hallum.

So can you -- so if we -- or thinking about the capacity reservations, just curious, obviously, the offtake agreements, as you said, much larger documents, but capacity reservations are also -- are pretty involved. Is 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 move from a capacity reservation to an offtake? Whether it's -- you get a certain amount closer to whether it's Origin 1 or Origin 2 coming online? Or just anything that might help that move from one category to the other?

Yes. Great question. So there's a few catalysts, but certainly to really secure the materials. And so to take that letter of intent into a firm take-or-pay contract is the ultimate way the customer has -- will be receiving those materials. And as our plans continue to sell rapidly, and we continue to believe that will be sold out by the end of next year on both plants, there's a real catalyst for customers to convert those contracts.

Got it. Okay. That's helpful. And you mentioned that you think you'll be, by end of next year, sold out even advance -- in advance of that as some of your customers clearly are global. Any thoughts? I mean are you still -- are you to the point where you're potentially starting to fill up plant 3 and plant 4?

So what I can say about that is that we are and have been for a while now taking orders on Origin 3. And we'll certainly -- we have full intentions to build origins 3, 4, 5 plus. So we will keep entering into contracts with customers as we -- as they have demand for our products and as the pricing meets or exceeds our financial forecasts. And that's our game plan.

Got you. Maybe last one for me, and this is just kind of 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?

Yes. It's a good question. I mean, the primary thing we think about when we say sold out is sold out to support project financing. And so there can frequently be, call it, 10% to 20% of a plant that would be still available and still somewhat flexible. But what we're focused on is selling out the vast majority of the plants to support the project financing on the construction schedule, and to keep doing that.

The next question is from Bob Koort from Goldman Sachs.

This is Emily Kech on for Bob. The first question I wanted to ask is, in which end markets does Origin see the most room for future growth opportunities right now?

Emily, it's Rich. Great question. Just to give everybody some context for the end market journey that we've been on. Back in February, our $1 billion of orders were entirely in the packaging space. And today, with the $4.2 billion, and we have customers in the apparel space and in the automotive space and in the industrial space. And our pipeline goes well beyond that. So 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 one for us.

We announced our Drive+ partnership this quarter. We announced our partnership with Kolon, and our previous partnerships with Ford and Solvay, which are automotive-focused. And as the automotive industry tries to decarbonize, transition to sustainable materials and remove weight from their vehicles, there's just an incredible opportunity for us there. But our pipeline includes cosmetic companies and toy companies and companies from really across a wide range of industries that we continue to see a lot of engagement from.

Okay. Great. And one more question from me. Are there any scenarios that you can see right now where Origin 1 could actually start up ahead of schedule?

Yes. Thanks, Emily. This is John. I think what we're looking at is even though we've hit a couple of milestones early, right? We've got the modules lifted and in place early, we're anticipating continuing to push through the winter, right? I think we're making really good progress on that project. But we want to be prudent. And at this time, I don't think we're ready to say that we're going to be delivering early on Origin 1. But we really do feel like by getting some of these milestones out of the way, it just takes a lot of risk out of it, right? It just lets us feel really comfortable that we're going to deliver that pretty easily on time, I think.

The next question is from Pavel Molchanov from Raymond James.

You referenced the commodity inflationary pressure with regard to steel and the other construction aspects. If we kind of flip that around to think about the commodity inflation across the petrochemical value chain, but at the same time, bio-based 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?

Yes. Pavel, this is Rich. I would say the customer demand, we feel feels like it's in sort of a fairly steady increase in terms of demand. And it actually -- it feels, in many ways, more macro than 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 it feels like the urgency keeps getting more urgent and the willingness to engage, and work on this. But 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. Build Back Better. Is there anything in there that is relevant to Origin either from the advanced manufacturing tax credit perspective or on the demand side of the equation in terms of the actual product?

Yes. 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 that the growing wave of legislation, Build Back Better and others federal state local levels here in the U.S. and around the world. And we are becoming more sort of active in this area. And so we're closely tracking the relevant legislation initiatives around the world.

And many of them do include substantial investment in production tax credits, grants, subsidies, and there are also some that include exercise taxes imposed on fossil-based plastics and other various regulatory schemes that would drive people towards our carbon-negative nonfossil technology. So that we are optimistic that the Build Back Better legislation will be beneficial for us as well as the REDUCE Act, which is a legislation that would impose a $0.20 per pound tax on certain virgin fossil-based plastics.

Okay. One last question. One of the things that's happened since the call 3 months ago is the reelection of the labor -- or liberal government in Canada where, of course, Origin 1 is located. Is there anything from Trudeau's post-election agenda that is, again, kind of direct relevance to your operations there?

Yes. It's a good question. We haven't seen something that is directly relevant to our Canadian operations at this point. Generally speaking, the Canadian government has had a pretty consistent -- it may not always -- I won't comment on whether it looks consistent from the outside or different perspectives. But from our perspective, it has always felt like a pretty consistent push for renewable technologies. And I'd say it's been a friendly environment for us through multiple -- many years of operations there. So we're pretty pleased with that, both the local state and the federal government behavior, let's say, and interactions with us and our operations in Canada.

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.