Amit Dayal: Thank you, Vince. I’ll take my other questions offline, but I appreciate all the color. Thank you so much.
Vincent Arnone: You’re welcome. Thank you.
Operator: Our next question comes from Marc Silk at Silk Investment Advisories. Marc please proceed.
Marc Silk: Hi Vince, thanks for taking my questions.
Vincent Arnone: Hi, Mark. Good morning to you and thanks for joining.
Marc Silk: Okay. So in the October 9th edition of Barron’s, there was an article discussing Europe’s first ever carbon based tariff.So some of the highlights were the imports to Europe will now face taxed based on carbon emissions caused by manufacturing. The goal of the legislation is to encourage more countries to write laws that reduce emissions and make sure that European manufacturers stay competitive with rivals operating in dirtier jurisdictions. So this could reconfigure international trade flows over the next 5 years and potentially result in new carbon fees going into effect in more countries. So taxes will start being collected in 2026 and will increase gradually until they’re equal to EU carbon prices in 2034. So I have a few questions.
So you’ve done a great job controlling expenses relative to revenues and something like this can really accelerate growth for Fuel Tech. So since you have the technology and expertise to mitigate this risk for many companies and industries, can you discuss maybe cost effective strategies that would allow you to participate in this opportunity? So for instance, Fuel Tech could pursue resellers and partnerships around the world where you provide the solutions and they can supply the sales force this could be a revenue sharing agreement without you incurring startup costs, etc., but would lead only to variable costs in relation to increased sales.
Vincent Arnone: Marc, thanks – thanks for the question. I appreciate it and actually for everyone’s benefit, Marc did actually share the commentary on the European carbon tariff with me and I have done a little bit of reading on that myself. So Marc – Marc, thanks for that. It’s – it’s a monumental undertaking, what the EU is actually looking to put in place today.To your point, they put the requirement out. It’s in a transitional phase as we sit here today. Evidently, they’re willing to start to try to gather some data, on carbon credit/tariff, if you will – if you will, starting in 2024. Now, Marc, as you know, the right now, the targeted industries are the, call it, the highest level polluters on the planet. It’s cement, it’s iron and steel, aluminum, electricity and hydrogen.So these are many of the end markets that, that Fuel Tech addresses today with our technology base via addressing European customers or via addressing customers in different parts of the world.
So From our perspective, we need to see how this tariff program is going to develop, obviously but as companies around the world are looking to reduce their carbon footprints, we work very closely with the steel industry over many, many years and have good relationship with steel, particularly in the U.S. Not as strong in the EU as we sit here today. So we’d have some work there to do. With some of the other industries, I think where we’re going to continue to look to capitalize on helping those industries reduce their carbon footprint by applying our nitrogen oxide technologies on their facilities as we have the opportunities to work with them prospectively. So it’s – it’s difficult to call this out as what I would call a specific target of opportunity, because we have been dealing with these industries historically, and we will continue to try to capitalize on any attempts that these industries are looking to make to reduce their carbon footprint.
As we get more information on this regulation in particular and better understand how companies are looking to address it, we’ll gather more information on our end, and I’ll be happy to share that on next earnings conference call as well.
Marc Silk: Yes, because one of the thoughts is that where the U. S. is reducing their dependence on coal, that’s not necessarily the case for other countries.
Vincent Arnone: Correct.
Marc Silk: So, I mean, what’s interesting about this is this could really change the prospects for your product from a regulatory requirement to an economical one in order to avoid, basically, recurring taxes, i.e. expenses. Is that – that is that correct?
