The Supply Gap No One Is Filling: How CHARBONE Is Building the UHP Industrial Gas Platform Big Players Won’t

ESGFIRE Management Interview | CHARBONE Corporation (TSXV: CH | OTCQB: CHHYF | FSE: K47)

Clean hydrogen has spent years as a promise. CHARBONE Corporation is making it a commercial reality — one regional hub at a time.

The company isn’t chasing the hydrogen mega-projects that dominate headlines. Instead, CHARBONE is building a decentralized, vertically integrated platform for ultra-high-purity industrial gases: the molecules powering semiconductor fabs, AI data centers, pharmaceutical manufacturing, and aerospace. It’s a market that exists today, is growing fast, and is structurally underserved at the regional level.

With Phase 1A commercial production live at Sorel-Tracy since December 2025, confirmed sales across UHP hydrogen, helium, and oxygen into both Canada and the United States, and multi-year supply agreements already in place with a subsidiary of one of the world’s largest industrial conglomerates — CHARBONE is no longer a pre-revenue story.

We sat down with CFO Benoit Veilleux to understand the platform strategy, the commercial milestones ahead and why CHARBONE believes it has no known advanced-stage competition in the market it is building.

1.CHARBONE’s latest corporate presentation positions the company as a vertically integrated ultra-high-purity industrial gases platform. How should investors understand CHARBONE’s business model today, and what role does clean UHP hydrogen play within the broader platform?

CHARBONE:
“Our mission is straightforward: to become the leading decentralized, vertically integrated UHP industrial gases company in North America and Asia-Pacific — producing, storing, and distributing critical high-purity gases to the high growth industries. What that means in practice is that we’re building a full-stack platform. We’re not just a hydrogen producer or just a distributor, we sit across the entire value chain: production, purification, compression, storage, and last-mile delivery to customers.

Clean UHP hydrogen is our core production molecule, and Sorel-Tracy is where we’ve proven that model works commercially, but the platform is explicitly designed to handle all industrial gases like helium, oxygen, nitrogen, argon, and others. That breadth matters because it means our regional supply hubs and distribution infrastructure generate revenue from a wider basket of molecules, not just hydrogen. Helium is a strong example: it’s classified as a strategic critical material by the EU, Canada, and the United States, it has no viable substitutes in semiconductor manufacturing or MRI applications, and supply is highly geographically concentrated. We’re already distributing helium commercially today.

The modular build-out model is what keeps capital requirements manageable. Each hydrogen project is designed with a multi-phases approach, each phase deployable in six to twelve months, a fraction of the three-to-seven-plus years it takes to deploy a traditional centralized mega-plant. We scale with demonstrated demand rather than building speculatively. We’re confident that combination of platform breadth and capital discipline is what makes Charbone a differentiated opportunity at this stage of growth.”

2.CHARBONE highlights demand from sectors such as semiconductors, AI and data centers, advanced pharmaceuticals, and aerospace and defense. What makes these end markets attractive for CHARBONE, and why is supply reliability and gas purity so important to these customers?

CHARBONE:
“These sectors share one critical characteristic: zero tolerance for supply disruption or quality deviation. If gas purity falls below the 99.999% UHP threshold in a semiconductor fab running chip etching or deposition processes, you can ruin an entire wafer batch. The same logic applies to pharmaceutical manufacturing, precision aerospace components, and the cooling infrastructure inside AI data centers. The customers aren’t buying a commodity, they’re paying for certainty of supply and certified purity.

What makes these markets particularly attractive for our model is that they are structurally underserved at the regional level. Global supply of UHP gases is dominated by a handful of mega-plant operators whose business model is optimized for very large customers and very large volumes. Mid-tier industrial customers, our target segment, often struggle to access reliable proximate supply. We believe Charbone has no known advanced-stage competition in the modular, decentralized clean UHP hydrogen production market. That’s not a claim we make lightly; it reflects a genuine structural gap.

The market context reinforces the growth trajectory. The global UHP gas market is projected to grow from approximately US$37.5 billion in 2025 to US$52.8 billion by 2030, driven by those same sectors. Capital investment in low-emissions hydrogen nearly doubled in 2024 to $4.3 billion and is projected to nearly double again in 2025 to approximately $8 billion, according to the IEA. We’re targeting a position at the intersection of that demand growth and the structural supply gap that the majors aren’t built to fill.

3.Sorel-Tracy is now described as commercially producing, with Phase 1A launched and initial sales reported in Canada and the United States. What has this first commercial phase demonstrated, and what still needs to be proven as CHARBONE scales the project?

CHARBONE:

“Sorel-Tracy has been a critical proof point on several fronts simultaneously. We launched Phase 1A commercial production in December 2025 and confirmed multiple sales into both the U.S. and Canadian markets in Q1 2026. What’s meaningful is that the validation wasn’t a single-molecule, we confirmed separate initial orders for UHP hydrogen, UHP oxygen, and UHP helium in Q1, with multiple deliveries across both countries. That demonstrates the distribution network is functioning, our gas meets UHP specification across molecules, and customers on both sides of the border can be served from a single platform.

As for what still needs to be demonstrated, execution at the next phase of scale is the central test. We’re progressing toward Phase 1B, targeting increased production capacity in H2 2026. Growing the customer base, building recurring revenue through longer-term supply agreements, and proving the per-phase economics are the milestones we’re focused on. We’re confident in the foundation, and we’re in execution mode.

4.Investors are focused on revenue visibility and customer validation. Without disclosing confidential customer information, can you describe the types of customers buying or evaluating CHARBONE’s UHP hydrogen, helium, oxygen, and other industrial gases?

CHARBONE:
“Our target is mid-tier industrial gas customers, or companies large enough to have consistent, recurring demand for UHP gases, but that are not always well-served by the global players who prioritize very large accounts and centralized delivery models. These customers sit in advanced manufacturing, specialty laboratories, industrial processing, and adjacent sectors where gas purity and supply reliability are operationally critical. What I can say publicly is that we have multi-year supply agreements in place with a subsidiary of one of the world’s largest chemical and industrial conglomerates. That is a meaningful validation signal. Organizations of that scale have rigorous supplier qualification processes, and the fact that we’ve secured multi-year commitments at this stage of our development reflects both product quality and distribution reliability. On the hydrogen side, our initial Sorel-Tracy sales covered customers in both Canada and the United States, demonstrating geographic reach even at Phase 1A production levels. As we scale toward Phase 1B and beyond, we’re targeting a customer mix that tilts progressively toward higher-volumes and longer-term agreements, the kind that provide the recurring revenue visibility investors are focused on, and that our regional supply hub model is specifically designed to support.”

5.CHARBONE is developing regional supply hubs alongside its hydrogen production assets. How do these hubs support recurring revenue, improve customer reliability, and help diversify the business beyond a single production facility or molecule?

CHARBONE:
“The regional supply hub network is what elevates Charbone from a hydrogen producer into a full-service industrial gas platform. The hubs allow us to store, handle, and distribute multiple gases from strategically located facilities close to customers. We currently have hubs operating or under development in Ontario, Quebec, Nova Scotia, and New York State, with hydrogen and helium tube trailers already deployed supporting commercial deliveries across those geographies. Our target is six to eight hubs across North America.

The revenue architecture the hubs enable is important to understand. The multi-year supply agreements we’ve established are anchored to hub-based distribution. When customers have a reliable, proximate source of supply with established logistics, they commit to longer-term arrangements. That creates the recurring revenue base that provides more predictable cash flow than spot sales.

The diversification benefit is equally significant. A single-molecule, single-site business carries concentrated execution risk. By combining owned production assets with a distribution network capable of serving the full basket of industrial gases, we’re building a business whose revenue is spread across molecules, customer types, and geographies. We’re confident that model improves earnings quality and reduces the risk profile relative to a pure-play hydrogen producer. The hubs also provide a low-capital-intensity way to add revenue — the asset-light, partnership-driven distribution model means we can expand commercial reach faster than our production build-out alone would allow.

6.CHARBONE’s agreement with Vema Hydrogen appears to support a Québec-based “well-to-market” hydrogen supply chain by combining Vema’s Engineered Mineral Hydrogen production with CHARBONE’s purification, compression, and distribution capabilities. How should investors understand the strategic importance of this agreement?

CHARBONE:
“The Vema agreement is a strong example of our platform strategy in action. Vema has developed Engineered Mineral Hydrogen technology, a process that harnesses natural subsurface chemical reactions to produce low-carbon hydrogen. They’ve completed drilling and initiated pilot operations in Québec. What they need is a partner who can receive that feedstock and deliver it reliably to market. That is precisely what our purification, compression, and distribution infrastructure is built to do.

Strategically, this is compelling for a few reasons. First, it adds a new low-carbon hydrogen feedstock source to our Québec supply chain without us having to build a new production facility, that’s capital-efficient growth. The agreement is structured to serve up to 15 tons per day of merchant hydrogen demand, which is meaningful scale. Second, it reinforces Québec’s positioning as a regional hydrogen hub and our role as the infrastructure and distribution layer within that hub. Third, it broadens the downstream application set. The framework contemplates not only industrial gas customers but also e-fuels, clean mobility, and low-carbon maritime and aviation markets. Charbone’s purification and distribution capabilities can integrate into multiple parts of that value chain.

Québec is an ideal geography for this model: concentrated industrial demand, proximity to key transportation networks, and access to renewable energy. We’re aiming to use this as a template that can be replicated as the hydrogen supply chain matures in other regions.”

7. Many small-cap investors are focused on financing discipline and dilution risk. How does CHARBONE plan to fund growth across Sorel-Tracy, regional hubs, and future projects while maintaining capital discipline?

CHARBONE:
“This is a question I take seriously in my role as CFO. I’d point to a few things. First, our track record: in 2025, we reduced our net loss by 6% year-over-year to approximately $2.7 million, while simultaneously completing the Sorel-Tracy equipment acquisition, launching Phase 1A commercial production, and initiating revenues across three gas molecules. That’s a demonstration that we manage costs actively even while executing on growth.

On the capital structure, we’ve been deliberate about building runway without unnecessary dilution pressure. We closed a $3.1 million private placement in January 2026 and drew the first $3 million tranche of a new $10 million secured convertible loan facility in April 2026. That facility has optional drawdowns during its term, giving us the flexibility to deploy capital in line with project milestones rather than all at once. Charbone founders, management and close partners retain approximately 39% ownership, which we view as a meaningful alignment signal.

More broadly, the modular build-out model is itself a capital discipline tool. Each phase is sized to be deployed in six to twelve months, matched to demonstrated local demand and access to renewable power. We’re not building speculative capacity. There is also the potential contribution from Canada’s Clean Hydrogen Investment Tax Credit, which could provide a tax credit of up to 40% of eligible equipment cost. That’s a meaningful offset to capital outlay at Sorel-Tracy and potentially at future Canadian sites. As revenues grow, we anticipate funding an increasing share of growth from operating cash flow. While the convertible loan provides important runway to execute our plans, we understand that we’re in an early growth phase and remain open minded about strategic capital and industry partners that may help expedite our footprint operationally and in the capital markets.

8.Looking ahead over the next 12 to 18 months, what are the most important measurable milestones investors should watch to assess CHARBONE’s execution and growth?

CHARBONE:

“There are several concrete milestones I’d point investors toward, in rough order of near-term visibility.

First, Phase 1B at Sorel-Tracy. We’re targeting increased hydrogen production capacity in H2 2026. That’s the most immediate operational test of our modular expansion model and the most direct read on whether the per-phase economics we’ve disclosed are achievable.

Second, Detroit and Wisconsin. Detroit is targeting Phase 1 launch in H2 2026 following site selection and permitting work in the next couple of months — 1 ton per day of clean UHP hydrogen, following a similar commissioning approach to Sorel-Tracy and targeting the Great Lakes semiconductor and advanced manufacturing corridor. Wisconsin is advancing through H2 2026 permitting, with 200 kg per day of capacity supported by Charbone’s own Wolf River hydro dam assets on land we already own. Progress on permitting, offtake conversations, and construction timelines at both sites will be meaningful signals.

Third, Malaysia. We’ve confirmed equity participation intent in April 2026 and completed an executive mission in Q1. We’re targeting progression from intent to executed agreements and project development activity.

Fourth, on the commercial side: revenue growth, expansion of the customer base, and conversion of pipeline conversations into multi-year supply agreements. We’re generating initial revenues today across hydrogen, helium, and oxygen. The 12-to-18-month question is whether we can demonstrate a revenue trajectory consistent with the Sorel-Tracy projected financials we’ve disclosed, C$5.1 million annually at Phase 1 and C$11 million at Phase 2, and whether hub expansion into the additional North American locations we’re targeting contributes to that trajectory.

And fifth, the Vema partnership progressing from conditional agreement toward an operational supply framework in Québec. Each of these milestones, collectively, should give investors a clear and measurable picture of how the platform is developing.”

9. If CHARBONE executes successfully, what should the company look like by the end of 2027 in terms of production capacity, regional hubs, revenue mix, and customer relationships?

CHARBONE:

“While there are external factors that may be out of Charbone’s control, I can share how we think about the trajectory.

Regarding our production plants, if we execute the way we’re targeting, Sorel-Tracy would be well into its multi-phase build-out, with Phase 1B complete and subsequent phases advancing. The indicative annual revenue potential we’ve disclosed publicly for that single site is C$11 million at Phase 2 and C$17 million at Phase 3, at approximately 50% margins. Those numbers are illustrative, not guidance, but they reflect the economics we’re aiming to demonstrate. Detroit and Wisconsin would be in or approaching commercial production while Malaysia would be generating returns from our equity participation structure in one of the world’s top-10 semiconductor manufacturing hubs.

Regarding our regional supply hubs, we’re targeting six to eight hubs across North America, anchoring recurring distribution revenue across multiple molecules and geographies. On revenue mix, we’re aimin for a profile where hydrogen production, helium and specialty gas distribution, multi-year supply agreements, and international partnership revenues each contribute meaningfully with no single site or molecule dominating. That diversification is central to the platform thesis. Opportunities to invest in a vertically integrated UHP industrial gases platform at this stage of growth are rare, and the build-out we’re executing is designed to reflect that.”

10.What is the biggest misconception investors have about clean hydrogen or ultra-high-purity industrial gases?

CHARBONE:

“I’d highlight two. The first is that clean hydrogen is a speculative, long-horizon bet. That characterization may apply to large-scale green hydrogen projects targeting export markets or heavy industry decarbonization which have long timelines and infrastructure challenges. However, for UHP hydrogen needed for industrial applications like semiconductor fabs, AI data centers, precision laboratories, and advanced pharmaceutical manufacturing, that market exists today, is growing, and is structurally undersupplied at the regional level. Charbone’s customers aren’t waiting for the hydrogen economy to arrive. They’re buying gas now, and they have a problem sourcing it reliably and locally.

The second misconception is about competitive barriers. Some investors assume the major industrial gas companies cover this market broadly. In practice, they’re optimized for very large customers and very large, centralized plants with deployments that take years and hundreds of millions to billions in capital. The mid-tier, regional segment Charbone is serving requires a fundamentally different model: local production, no gas to liquid conversion losses, minimal transportation cost, and deployment in months, not years. Again, we believe we have no known advanced-stage competition in that specific space. That’s not a function of the market being small, it’s a function of the majors not being built for it.

We’re not asking investors to bet on a future state of the world. We’re building a business in a market that exists, backed by a capital-disciplined model designed to scale with demand. The structural tailwinds from semiconductor growth, AI infrastructure build-out, and decarbonization mandates are real and additive, but we don’t need them to accelerate to make our near-term business case work.”