Carbonxt Group Limited (ASX: CG1) (“Carbonxt” or the “Company”), the United States-focused cleantech manufacturer of activated carbon products, has released its March 2026 Quarterly Activities Report. This filing reveals a Company navigating short-term operational friction while simultaneously building the foundations for what management expects will be a period of material growth.
A Quarter of Headwinds and Hard-Won Progress
The quarter brought a dip in customer receipts, with the Company recording $3.3 million, down 13% on the prior quarter, driven largely by a February sales slowdown from its largest Powdered Activated Carbon (PAC) customer. Volumes from that customer have since recovered.
Operating cash came in at $(368)k, a decline from the $204k positive position recorded in Q2 FY26, primarily reflecting the lower PAC production volumes and the residual effects of a maintenance outage at the Black Birch plant in the prior quarter.
Despite these near-term pressures, the Company delivered a gross margin of 46.7% for Q3 FY26, and management accounts confirm that EBITDA and operating cash flows remain positive on a year-to-date basis.
Figure 1: Carbonxt Group Limited March 2026 Quarterly Revenue Trend
New Purchase Order Opens Fresh Market Segment
Activated Carbon Pellet (ACP) sales held broadly flat in dollar terms during the quarter, though volumes were approximately 8% higher than the prior quarter. The shortfall against expectations stemmed from constrained inventory following the Black Birch outage, a bottleneck the Company has since addressed by shifting ACP production to a 24-hour shift pattern in April 2026.
Then, in a development the Company flagged as particularly significant, Carbonxt received a new Purchase Order (PO) in April 2026 for a new ACP product entering an entirely new market segment. The order is equivalent to roughly one month of deliveries for the new customer, and a longer-term supply arrangement is currently being documented, with a formal announcement expected in the near term.
Figure 2: Activated Carbon Pellets [Source: Carbonxt Group Limited]
Managing Director Warren Murphy did not understate the importance of the development:
“The new pellet Purchase Order is a significant step for the Company. It reflects the manufacturing and commercialisation expertise we have built in the ACP sector, particularly through our employees. We expect to finalise the long-term supply arrangement in the near term.”
Key ACP growth drivers in the pipeline include:
- New customer onboarding via the new PO and pending long-term supply agreement
- Increased volumes from the Company’s primary manufacturing customer
- Deferred sales recovery for its largest ACP customer, WPS
Kentucky Facility: Closer Than Ever, Kiln Parts Awaited
The Kentucky activated carbon facility remains the centrepiece of Carbonxt’s North American growth strategy, and while commissioning has progressed more slowly than anticipated, management maintains confidence in the asset’s transformational potential.
Construction of the kiln was reported as complete in the prior quarterly update, but early commissioning identified remediation requirements that required the kiln manufacturer to agree to replace affected equipment at cost and facilitate necessary repairs. The plant is currently awaiting delivery of replacement parts, after which kiln installation will be completed and commissioning will restart. KCP, the plant’s constructor, expects this to be the final step before kiln start-up commences.
Work on back-end infrastructure continued during the quarter, including the construction of a new building to house the bagging station and an additional storage silo.
Figure 3: Carbonxt’s Kentucky activated carbon facility [Source: Carbonxt Group Limited]
Mr Murphy acknowledged the slower-than-expected pace while remaining optimistic:
“Kentucky has progressed more slowly than expected this quarter, but the manufacturer remains supportive, and we expect the kiln issue to be resolved in the coming weeks.”
Once fully operational, the Kentucky facility is forecast to increase group sales by approximately 200% and unlock entry into the liquid-phase activated carbon market — a sector several times larger than the Company’s existing air-phase segment. The plant is designed to manufacture premium-grade activated carbon for PFAS filtration, wastewater treatment, and industrial emission control.
Funding Secured to Sustain Growth
The Company secured $1.25 million in additional funding during and after the quarter through convertible note facilities with major shareholder Phelbe Pty Ltd.
February 2026 – $500,000 convertible note:
- Face value: $1.00 per note; conversion price: $0.10 per share
- Converts into 5,000,000 fully paid ordinary shares
- Interest rate: 9.5%; three-year term
- Proceeds earmarked for working capital and a US$250,000 investment in New Carbon Processing, LLC
April 2026 (post-quarter) – $750,000 convertible note:
- Same terms: 9.5% interest, $0.10 conversion, three-year term
- Converts into 7,500,000 fully paid ordinary shares
- Proceeds directed toward Minnesota pellet plant expansion, a further US$250,000 investment in New Carbon Processing, LLC, and working capital
Following these transactions, Carbonxt’s ownership interest in New Carbon Processing, LLC increased from 47.4% to 48.1%, keeping the Company on track toward its stated objective of securing a 50% interest in the Kentucky facility.
At quarter end, the Company held $0.3 million in cash and cash equivalents, a position that has since improved following the April convertible note and working capital recovery.
A Booming Market at Carbonxt’s Back
The broader activated carbon market provides a compelling backdrop for the Company’s growth ambitions. The global activated carbon market was valued at approximately US$8.13 billion in 2025 and is expected to grow at a CAGR of 9.32% through 2026 to 2032, reaching nearly US$15.17 billion.
Powdered activated carbon, Carbonxt’s core product, holds a commanding position within this expansion. The powdered segment held the largest revenue share in 2025, driven by its high adsorption efficiency, cost-effectiveness, and widespread use in water treatment, food processing, and pharmaceutical purification.
The water treatment application segment is the largest and fastest-growing end-use category, underpinned by tightening global regulations and the rising necessity for clean and safe drinking water. For Carbonxt, operating as a US-based domestic manufacturer of both PAC and granular activated carbon (GAC), this structural growth backdrop aligns directly with its product range and its positioning.
Figure 4: Major uses of Powdered Activated Carbon (PAC)
EPA Momentum: A Regulatory Runway Through 2031
A major catalyst for Carbonxt is evolving United States regulation around PFAS contamination, often referred to as “forever chemicals”.
Key EPA regulatory highlights:
- PFOA and PFOS MCLs confirmed at 4 parts per trillion; compliance deadline extended to 2031
- PFAS OUT initiative launched — targeting ~3,000 affected water systems from mid-2026
- $945 million in federal funding released to reduce PFAS exposure in drinking water
- Draft Sixth Contaminant Candidate List (CCL 6) released, designating PFAS as a priority contaminant group
This creates a long procurement runway for treatment technologies such as PAC and granular activated carbon.
Carbonxt stated it is already seeing rising enquiries from utilities and distributors seeking a reliable domestic supply.
Tariff Environment Boosts Domestic Advantage
Carbonxt’s US-based manufacturing operations also position the Company advantageously amid evolving trade policy. It is estimated that 20–25% of annual US activated carbon demand, equivalent to approximately 70,000–80,000 tonnes, is met through imports from China, India, and Sri Lanka. A shift toward expanded tariffs or a strengthened “Buy American” agenda favours domestic producers. Carbonxt, as a domestic manufacturer, is well-placed to supply utilities and industrial clients seeking tariff-free, reliable supply chains.
Investors’ Outlook
Share Price Activity (ASX: CG1)
| Metric | Value |
| Last (Price) | $0.083 [As at 12 pm AEST, 30th April] |
| Market Capitalisation | $35,966,421 |
Performance Summary
| Period | Performance |
| 1 Month | +3.75% |
| 1 Year | +53.70% |
| vs Sector (1yr) | +11.56% |
| vs ASX 200 (1yr) | +46.97% |
Carbonxt’s share price performance paints a compelling picture for investors who have held the stock over the past year. The 53.70% gain over 12 months significantly outperforms the broader ASX 200 by 46.97 percentage points and beats its sector peers by 11.56 percentage points, a strong relative result for a company with a market capitalisation of just under $36 million.
Near-term catalysts that the market will be watching closely include:
- Formal announcement of the new ACP long-term supply agreement
- Kentucky facility kiln restart and commencement of commercial production
- ACP revenue uplift from the new customer and 24-hour shift ramp-up
- Further quarterly cash flow recovery as plants return to full operations
Disclaimer: This editorial is for informational purposes only and does not constitute financial advice, investment advice, or a recommendation to buy or sell any securities. Readers should conduct their own research and seek independent professional advice before making any investment decisions. Market data and Company information are based on publicly available sources believed to be reliable at the time of writing. All dollar amounts are in AUD unless otherwise stated. Forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from expectations.
Last modified: April 30, 2026
