Fifteen Million Pounds Wasn't Enough
Arq's activated carbon plant in Louisiana was commissioned a year ago and made on-spec product. Its 10-Q on Monday says it will produce nothing in fiscal 2026 or 2027, because the thermal oxidizer tops out at 15 million pounds and 15 million pounds doesn't pay. Plus Trinseo spending 24 cents on the dollar from inside Chapter 11, a lost month at Batesville, and Kaub at 14 centimetres.
A plant that has never made a tonne is easy to discount. A plant that was commissioned, ran, and made on-specification product is supposed to be past that risk.
Arq's granular activated carbon facility at Coushatta, Louisiana is the second kind, and on Monday it told the market it will make nothing for two more fiscal years.
Five items this run, all from filings and gauges that moved since Sunday.
A commissioned plant that skips two years
Arq announced on August 6, 2025 that it had commissioned the GAC facility at its Red River plant and produced first commercial volumes of on-spec product. By December the company knew that ramp to nameplate "could not be accomplished without further modifications," because of design flaws. Independent testing in January put a number on it: the thermal oxidizer as installed supports approximately 15 million pounds a year against an original design capacity of 25 million pounds or higher.
And 15 million pounds, Arq says, "on a stand-alone basis does not provide sufficient returns to make it economically attractive."
So the line in Monday's 10-Q is the one to take away: "we do not expect GAC production in fiscal year 2026 or 2027." Design capacity, equipment limit, and output are three different numbers on the same asset here, and the third is zero for two years running (chart below).
Where it gets interesting for anyone buying carbon: the same day's release pitched PAC for PFAS, an engineered powdered product Arq says "can help utilities address PFAS contamination while potentially eliminating the capital cost of new GAC equipment," with material contribution possible from 2027. Read those two disclosures together and the company whose granular line is down is selling utilities a reason not to buy granular equipment at all.
The Corbin, Kentucky facility stays idled indefinitely, and Arq is switching GAC feedstock away from Corbin Wetcake to bituminous coal. Litigation with the engineering firm that designed the unit is ongoing.
Q2 revenue was $29.9m with adjusted EBITDA of $5.8m, helped, in the company's own words, by "no drag from previous period" GAC expense.
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