Hazer Group Limited (ASX:HZR) Managing Director and CEO Geoff Ward provides an update on its hydrogen and graphite Commercial Development Project at the Woodman Point Wastewater Treatment Plant South of Perth using waste gas produced through the water treatment facilities. The market for hydrogen and graphite, it's funding position and institutional interest in green hydrogen.Thank you very much, and thank you for the opportunity to speak to the Finance News Network today. Next slide please. In fact, I won't expect people to speed read the disclaimer, but next slide please. So today I'd like to introduce you to Hazer and the Hazer Process. As introduced by Clive, we are an innovative Australian clean technology development company, and we are focused on commercialising the Hazer Process, which we think is technology absolutely poised for the 21st century in that it's a low cost, is scaled up and reaching scale, and low emission process that creates two high value, high demand products. So in the Hazer Process, I'll talk a little bit about the basic chemistry in a moment, but we take a hydrocarbon feedstock, ideally methane, so biogas and various green, renewable feedstocks are so well suited to our process, and we split that, make that molecule into hydrogen and synthetic graphite. So we create two potentially high value products out of a single feedstock without releasing a carbon waste product in the process.
We think this is a really well-suited technology for our times in that there's a strong dynamic in the market for both products. Hydrogen is incredibly topical and demand is expected to increase astronomically over the next 10, 20, and 30 years. And graphite is more and more in demand as we also focused on technology such as energy storage, but also in the low carbon production of steel, aluminium, and other metals. We think our process can be a leader in the clean and cost effective production of hydrogen and graphite, so we see ourselves well positioned for these emerging premium markets. And as mentioned in the introduction, our technology is now developed to the point where we're fully funded to develop the first demonstration project, which we're the first larger scale, fully integrated production of our tech.
Next slide please. So what is the Hazer Process? So in the Hazer Process, we take methane. We can also use natural gas, LNG, so combinations of methane and ethane, and we take that gas feedstock, we heat it in a pressurized fluidized bed reactor, a standard, typical design for chemical process reactor, in the presence of powdered iron oxide and iron ore as a process catalyst, and in that process, we take the methane, which has the chemical signature CH4, and we split it into two hydrogen molecules and a particle of solid graphite. So while the feedstock goes in as a gas, the carbon comes out as a solid. And in fact, the carbon is laid down layer by layer around the microscopic shards of the iron oxide catalyst that provide the reaction site. So we think it's a very efficient process. We think it has a very strong yield. We think it has an attractive yield and good energy characteristics, and it's shown itself to be stable and repeatable. Hence our willingness after our pilot trials to now move into a demonstration project.
Next slide please. So as mentioned, our core focus at the moment, our number one objective is proving that our technology can be scaled up from the pilot stage into a fully integrated, continuously operating working model. And to do that, we're building a 100 ton per annum demonstration project in collaboration with the Water Corporation at the Woodman Point wastewater treatment plant. Now this facility processes water and water waste from the Southern metropolitan region of Perth, and like most modern facilities of its type, it has biogas production units integrated with the water treatment where they treat the remedial waste from the wastewater. This biogas is going to be the feed for our plant. It's currently being flared, so it's a great environmental outcome. And we're taking this biogas, we strip out the contaminants in the biogas, primarily CO2, and then are converting it into graphite and hydrogen. Primera Group, a local West Australian engineering services company is our engineering partner, and we've been very fortunate to secure strong funding from the Australian government through the Australian Renewable Energy Agency.
Next slide please. So the project, we took a FID, a final investment decision on this project in July 2020, after commencing early engineering works in June 2020 with a pre-feed and feed study, and then working up the detailed project CAPEX and OPEX. We're now currently approximately 80% through the detailed design phase. We completed all necessary permitting activities in first quarter of this year, so all permits required for us to access the site and start construction have been granted. Development approval, environmental approval, heritage approval. Through the last month we have actually taken access and control of the site. The site is actually within the Woodman Point wastewater treatment facility, and we're very grateful to our host, the Water Corporation, for their excellent collaboration. And we've actually completed site clearing activities to leave us with a liberal construction pad ready for civil construction to start in the next month.
We're currently finishing detailed design activities and procurement activities. We've placed procurement orders for the major equipment packages, compressors, hydrogen purification units for the materials and fabrication of our reactor. And we are currently targeting a commissioning of this project in December of this year, in December 2021. So all continuing to go well, it's a tough environment to be executing a project, but our project team is making an outstanding effort with both the complex design issues and dealing with the difficulties of international logistics in the COVID environment, but they're continuing to do well, and at this stage we're maintaining our end of 2021 guidance for up with the project. The intention is that the project will run for approximately two years, and that will allow us to demonstrate to future customers that our project and our processes are ready to scale up to larger commercial capacities and is ready to start being used in the commercial setting.
Next slide please. So I might just now backtrack, having spoken about Hazer, explained what our technology does, that it's a low emission process to produce hydrogen with graphite as a valuable byproduct, and actually talk a little bit about why hydrogen and why there's so much focus on it. So quite simply, hydrogen is absolutely intrinsic to the continued decarbonization of industry, transport, and the power sectors and achieving the climate goals that have been set down as nationally determined targets under the Paris Climate Agreement. And of course in this year in 2021, we've seen an absolute flood of major international announcements from companies or from countries such as Japan, Korea, and the EU, China, and the US about increasing their climate ambition, setting tighter and more enforceable goals, and bringing forward the date by which they will be a net zero emission economy, and bringing forward the dates in which they will actually start to restrict the use of carbon in heavy industry, heavy transport, and other sectors who are yet to decarbonize.
So hydrogen is seen as critical to this because it is the mechanism by which we can store, transport, and use renewable energy efficiently. It plays seven different roles in actually decarbonizing the global economy. It allows mega-scale renewables to be integrated with the power generation network. It allows us to distribute energy from regions that have low renewable energy resources to those that have high, or sorry from those that have high to those that have low, such as from Australia to Japan, Australia to Europe, South Australia to New South Wales. It allows us to actually bring more renewables into a system, acting as a buffer to increase the system resilience. And what this means is that in a power system or a big industrial setting, you can use hydrogen to absorb excess renewable energy when there's more available and as needed, and then to give that energy back when less is available. So it is a way of acting actually as a buffer and store, as well as the transport mechanism.
And then hydrogen itself plays a number of roles in key markets as a molecule, as a clean burning molecule, as a clean way of generating heat, as a clean way of generating power. So hydrogen can be used as an alternative to diesel in heavy transport. And in particular, there's focus on long distance transport, on ferries, maritime transport, and on rail. On areas which aren't easy to decarbonize by batteries. It's also an important way we can decarbonize industrial energy use. So hydrogen can be burned in a furnace or turbine, so hence it can meet some of the high temperature needs that are difficult to do through electrification alone. And it can also serve as a renewable feedstock in industries which are currently heavy emitters. So in the refining, petrochemicals, fertilisers, explosives, and a number of other heavy manufacturing sectors, hydrogen is a key input, and it's currently made by very polluting means. So technologies such as Hazer's or such as the increase use of green hydrogen from electrolysis will be critical to decarbonizing these sectors and hence present an enormous market opportunity.
Next slide please. In that context of all these possible uses for hydrogen and how hydrogen will allow us to continue to make the greatest advantage of the plummeting cost of wind and solar, we've seen a strong global focus on accelerating the deployment, the piloting, and then the rollout plans for hydrogen in national economies. At the beginning of this year, and very much within the last one to two years, we now have more than 30 countries have released hydrogen roadmaps, more than 200 projects have been originated across Europe, Australia, and Asia to promote the rollout of hydrogen infrastructure and its uptake. And there's over $80 billion of potential investment has already been announced with up to $300 billion in investment in the near to medium term highlighted through various reports. And in particular, we're seeing a large number of national programs to incentivise the rollout of technologies. We've seen multi-billion dollar incentive programs now being announced in France, Germany, and the Netherlands, in Canada and the US and Japan and Korea. All of these provide very fertile ground for the rollout and scale up of new technologies such as ours.
Next slide please. So in the last minutes available, I'd like quickly to give an update on two or three things. One is in our business development activities. In parallel to the development of the CDP as the first fully integrated larger scale deployment of our technology, we're seeing increased interest in our technology from utilities, heavy industry players, large scale energy players globally. And we're also, now that the targets for bringing these technologies forward have been accelerated, seeing a wider range of potential end users. Heavy industry, transport utilities. So we're working with our engineering partner Chiyoda, and we're working with potential end users across all of those regions to look for the best sites to which to scale up beyond the CDP, and looking at potential commercial scale plants in possibly the two to three thousand ton per annum scale size. And we're looking to undertake a range of pre-feasibility engineering activities through this year to be ready to go into feasibility studies hopefully before the end of the year in parallel with the CDP proving our technology scale-up.
Next slide, please. In addition to the business development, we maintain line a very strong R&D program, in particularly focused around the unique graphite product produced from our process. And this year we're very excited to be working on a number of novel purification and functionalisation technologies, so ways of purifying our graphite from the approximate 90% purity that we'll produce it from direct from the reactor up to 99.5 or above to open up more high-value markets through our graphite. So we have some very prospective R&D that we continue to work on with our partnership with the University of Sydney.
Next slide please. Because the graphite product, as well as hydrogen, which is the key focus of low emission hydrogen, the graphite we produce is a unique synthetic graphite. We are exchanging samples and talking to potential customers. The graphite market is slow, technical, and complex, but potentially very high value in a number of specialist manufacturing applications. So we've seen interest and see potential applications in uses is as diverse as the creation of lithium battery anode materials, the creation of electrodes for advanced metals manufacturing, or its use in novel water purification techniques, particularly with various organic contaminants where it's showing a lot of potential. So we will continue to invest heavily in the R&D to make sure that we have valuating paths for the Hazer graphite that we've produced alongside the low emission hydrogen.
Next slide, please. So just before we summarize, the other key point that we've flagged is that we are fully funded to build this first of its type project, that we strengthened our balance sheet and diversified our funding through 2020, and our balance sheet is now a mixture of grants, both state and federal, debt, and equity. And in April 2021, we were very pleased to welcome AP Ventures as a strategic investor. AP ventures are a London based specialist hydrogen venture capital fund, who've made, we believe, over 20 specialist hydrogen investments in the last two years, and we're very pleased to be part of their stable. So we have a strong cash balance, including 9.41 million in ARENA grant funding, of which we've only so far drawn 2 million. We have $4 million of undrawn senior secured debt. And we have just received the proceeds, or post this cash balance, we received $4 million proceeds from AP Ventures Strategic Investment. So we are well-funded to undertake both our project, our R&D, and our business development activities.
Final slide please. So in summary, Hazer is a unique Australian developed low carbon process for producing hydrogen and produces a valuable graphite byproduct, so capturing all the carbon associated with the hydrogen feedstock. We have taken it from laboratory and pilot stage, and we're now into a development project or a demonstration project I should say, rolling out the first continuously operating larger scale example of the technology. We have a strong R&D platform and balance sheet to continue to advance our technology, and we're working closely with key international partners like Chiyoda Corporation on rolling out future projects. So thank you for your time today, and I look forward to seeing further dramatic developments in 2021.
