The SAF Podcast
Welcome to The SAF Podcast, the only podcast on the internet that exclusively covers sustainable aviation fuel (SAF). So if you want to find out the real issues and challenges are for commercialising and scaling SAF production, look no further.
Every week we will be hearing from senior industry leaders who are actively shaping the future of SAF and aviation.
Hosted by Oscar Henderson and brought to you by the team at SAF Investor. Connect with us at www.safinvestor.com
The SAF Podcast
The SAF Podcast: OXCCU - Catalyzing change and simplifying the e-fuels equation
In this episode of the SAF Podcast, Andrew Symes, Founder & CEO, OXCCU joins Oscar to dive into the cutting-edge world of e-fuels. A chemistry graduate turned venture capitalist who transitioned to leading a pioneering carbon capture utilization company, Symes discusses OXCCU's groundbreaking catalyst technology that simplifies the conversion of CO2 and hydrogen directly into hydrocarbons.
The conversation explores OXCCU's recent milestone: their OX1 demonstration plant, which marks a crucial step in de-risking their innovative single-step conversion process. Symes details how their technology could significantly reduce the CAPEX and OPEX of e-fuel production, potentially solving the cost barrier that currently limits power-to-liquids scaling.
Industry experts will appreciate the technical discussion on reactor specifications, catalyst performance at scale, and the strategic approach to future developments, including the planned OX2 facility. The episode also addresses critical sector challenges, including grid electricity demands, the importance of first-of-a-kind facilities in climate tech, and the role of university research in breakthrough innovations.
Symes offers valuable insights on the business model evolution from technology development to licensing, and provides a nuanced perspective on UK and EU SAF mandates. The conversation concludes with a pragmatic discussion on offtake agreements and the critical timeline challenges facing the industry as it approaches the 2030 mandate deadlines.
If you enjoyed this episode check out our previous episode with Berta Cabello and Carlos Suarez, Repsol to find out about why Spain is such an important market for SAF production: https://www.buzzsprout.com/2202964/episodes/15861484
Hello and welcome to another episode of the SAF podcast. This week I'm delighted to be joined by Andrew Symes from Ox CCU, and we're going to be talking all things e-fuels, energy, grid investment and really getting into the weeds and some of the big issues around e-fuels, energy, grid investment and really getting into the weeds and some of the big issues around e-fuels. Andrew, I had a first question, but I'm going to change it. I'm going to call an audible Ox CCU. I know I've made this mistake in the past. Why not Oxu? Why Ox CCU?
Speaker 2:this mistake in the past? Why not oxu? Why ox, ccu? What's oxycu?
Speaker 1:ox is for oxford ccu carbon capture utilization. I feel like we we needed to do that so other people don't make the same mistake I've done in the past. So, um, now we've got that out there. Hopefully you'll get that a lot less now, yep, so um. So what's your background and can you give us a sort of how OXCCU came into being as well?
Speaker 2:Yeah, great. Well, firstly, thanks for having me. My background is chemistry. I studied chemistry in Oxford and then I left and joined BP. I actually started working in commodity trading, so moving oil and gas around the world. I left that to join bp ventures, so investing in startups on behalf of bp, and moved into kind of climate tech investment. I then worked for a company called ip group, which is particularly focused on university spinouts, so investing in university spin out, so investing in innovation coming out of UK universities and I came across Tiankun and his Nature paper in 2020. And I actually led the seed round into the company Ox CCU in 2021.
Speaker 2:And really, really got conviction around the breakthrough and its potential and actually left the investment world to actually be CEO of the company. So it was myself, jane Jin, as COO and Tianqian Zhao as CTO, with a fantastic postdoc, ben Zaniao, and under the guidance of Peter Edwards, who was head of inorganic chemistry at the time. So that was it. I mean, that was the founding team and we were off and running and we were focused on the catalysis part. So we'll come on to talk a bit more about that in a second, but really we're focused at a high level on the lowest cost pathway to convert co2 and hydrogen into fuel, so the lowest cost pathway to make e-fuels or powder liquids it's a fairly unusual.
Speaker 1:I mean, there is the story in sort of venture capital generally that you found a company and then you move into investment. But it's not so common to go from sort of investing in rounds to then joining a company that you've invested in. That's not such a common story.
Speaker 2:It's probably more common the other way around, you're right. But that said, you know it is fairly natural, I believe, and I think hopefully, in time it will become more common, because it is good for investors to have experience having been on the operational side, and it is good from the operational side to have had experience on investment when it comes to, you know, fundraising. So there is a very, very good reason why you know there should be at least some crossover between the two um, certainly in the us, I believe it is, you know, more common and I think in europe it's becoming more common. Um US, I believe it is, you know, more common and I think in Europe it's becoming more common. But yeah, it is a very different role, it's a very different experience, but there are some similarities and some great things you can take from one to the other.
Speaker 1:So your most recent achievement is your first of a kind demo plant that you've you've recently opened. So take us through sort of the work that's gone into that and how important that is as sort of a stepping stone for CCU going forward.
Speaker 2:Yeah, I mean, if I take you back to 2021, I mean we were based on over a decade's worth of research on this catalyst and this pathway, you know, in the University of Oxford and you know, ultimately, tiankin has spent his entire life working in this field and is one of the most patented people in the field. But, you know, going back to 2021, we really just had the lab work and it was done within Oxford University. So the first step was really to obviously create our own lab, our own team, and demonstrate and replicate the results and actually prove that we've got the stability, so that we showed that we can get, demonstrate this performance not only for tens of hours but thousands of hours. And that's exactly what we did and, you know, with that data, we were then able to go and raise our series a round, and that was, you know, a a big round. It was. It was in a fairly difficult funding time as well, in 2023, but we raised 80 million pounds, or 23 million us, and we were supported by clean energy ventures but also aramco, eni, trafigura, united Airlines, bravos, tech Energy Ventures and Doral, and obviously IP Group were already there, having led the seed round, and the purpose of that was to build this plant, this demonstration plant, which we call OX1.
Speaker 2:And OX1 is a thousand times bigger than the lab. So it's a huge, huge scale up, thousand times bigger than the lab. So it's a huge, huge scale up and it is all about essentially demonstrating the same results, but now at this much larger scale, outside of the lab, and it's now operating. It's now working. It produces 1.2 liters of liquid fuel a day, or one kilogram of fuel a day. So you know, you think, okay, that's still fairly small. But the good thing is is this technology really does scale, and we are, you know. We know that we've got to scale it and we know that we, how we can scale it. And we're already now focused on on OX2, which will be bigger again. You know 50 tons a year, or 160 kilos per day.
Speaker 1:You played a very dangerous game in listing all the investors, because then you've got the problem. You've got to remember them all. You can't forget one of them.
Speaker 2:Exactly that's actually.
Speaker 1:If yeah, exactly that but I think I think you've done well there. So, um, I think I've got a university of oxford I forgot them.
Speaker 2:They're already there as well.
Speaker 1:Yeah, I think they kind of go without saying they get probably the most shout outs of everyone seeing this. Yeah, um, so you've mentioned your catalyst a couple of times and, for the non-chemical engineering of our listeners, do you want to explain what that is and you know how it helps and what benefit it has for the process?
Speaker 2:yeah, so I mean just at a very high level. You know lots of reactions thermodynamically can happen, but they're what's called kinetically limited, so there is no pathway for the reaction to happen, and you know that's what people call. You know, having a high activation energy and catalysts essentially lower the activation energy for the pathway that you want to occur. So cats, catheter is a key amongst you know all of chemical engineering as being the way in which you enable reactions to happen that you want to happen, and sometimes you know, enabling specific reactions and not enabling other reactions.
Speaker 2:Now, co2 and hydrogen actually and it's a misconception this they actually thermodynamically can form hydrocarbons in water and release heat. It's an exothermic reaction, but CO2 is very stable so it doesn't want to form it. But you know it's kinetically limited, it's not necessarily thermodynamics. So what our catalyst does is it enables us to essentially facilitate this CO2 plus hydrogen reaction and take you straight through to hydrocarbons and water. And why that's distinctive is because everyone else is focusing on catalysts that mainly already exist today and they work with CO, so carbon monoxide, but not CO2. And this is simply just because people haven't spent a huge amount of time working with co2. 100 years ago it wasn't a priority, but now it is, and rather than taking existing catalysts and having complex processes, we are changing the game by having a new catalyst that gets you from co2 and hydrogen straight through to hydrocarbons and water. So it is a significant breakthrough. It's all about cost. It's all about bringing down the capex and the opex of these processes by eliminating steps and by making the energy efficiency better.
Speaker 1:So, if I'm Brian thinking that the catalyst predominantly this new catalyst has got the ability to simplify and make the process more efficient and therefore, further down the line, make production more economically viable and you can produce more for less. Is that essentially the economic crux of it?
Speaker 2:That's it so currently. At the moment, you know we still need hydrocarbons in a net zero world. I think everyone's realizing that. Clearly, where you can electrify or you can use electricity directly, you should is more efficient. But you're left with these chunky sectors that have to have a solution as well aviation fuel, especially long distance. There are also chemicals and plastics. It has to be carbon and hydrogen.
Speaker 2:Hydrocarbons and biofuels are not enough. I think everyoneises that biofuels can get you some way, but they can't get you all the way. So that's why people are excited by power to liquids, because we've now got much more abundant feedstocks and the potential for huge scale CO2 and hydrogen green hydrogen coming from electricity and water. The challenge, though the drawback with it, is cost. Power to liquids is expensive because it requires a lot of energy, essentially to make the hydrogen. But what we can do is bring the cost down of power to liquids by enabling, essentially, a simplified pathway with more selectivity, so more of the products that you want and better energy efficiency, and that means that ultimately, lower cost power to liquid, saf. So we're eliminating the key barrier for power to liquids, which is currently cost and not. It's not feedstocks, biofuels, it's feedstocks. Essentially we need both, but ultimately power to liquids. It's all about getting that cost down, getting as close to fossil as we can.
Speaker 1:One of the other major challenges you hear a lot revolving around power to liquid e-fuel, e-saf production is the requirement of energy and electricity, as in it's very high and there's already a high demand on the existing energy grid and there's only going to be more pressure put on it through terrestrial electric cars. There are these new EV tolls and battery powered aircraft being developed which are further going to strain it. So that's quite a big challenge for you guys, isn't it?
Speaker 2:It is and it isn't. I mean e-fuels are not for everywhere right now. It is and it isn't. I mean e-fuels are not for everywhere right now. If you have a huge amount of coal generation on your grid, this isn't the technology for you. You need to focus on getting that coal off the grid first. But there are some places where that isn't the case.
Speaker 2:We're already getting to very, very high green energy penetration in that grid and in those locations e-fuels can make sense. And especially if they're using electricity, that is, in locations where there is an abundance or a surplus or use it at times when no one else wants it it can actually be hugely beneficial to the system. So, yes, it needs to be done carefully, but it's not the case to say, oh, you know, it's not needed, let's only do 100 green grid first before we do anything involving uh powder liquids. We need to get this industry started. We need to focus on those locations first that have those kind of right conditions for it. So, yeah, it needs to be done carefully, but it doesn't mean that it can't happen and it's not suitable for certain locations now.
Speaker 1:How are you guys going about? You know, for your demonstration plant sort of the grid aspect. Is it a case of you know calling up whoever runs the grid, sitting in the grid box and saying we'd like this much electricity at you know this consistency, or how does that conversation go? Because I think there's a lot of sort that could potentially be a misconception about how you sort of get all your electricity basically for your process.
Speaker 2:So I mean, let's take OX2, for example we are working with hydrogen project developers who are already working on solving this question and working within the UK green hydrogen framework, which has, you know, additionality constraints and all of the right sustainability credentials to ensure that you are not having a negative effect.
Speaker 2:You're having a big positive effect and those hydrogen project developers are very keen to work with us because we are a huge potential secure offtaker of green hydrogen. So it's already sort of emerging in in all these key areas where you're already getting hydrogen project developers developing these projects. And yes, there are some use cases where you can use hydrogen directly. But there are many use cases and SAF's now a big one where essentially the hydrogen is going to be converted to a hydrocarbon, and that is another part of the puzzle. So already there are many hydrogen project developers who are solving the problem that you're kind of talking about and who are very keen to work with us, provide us that green hydrogen that we need. We also need CO2, ideally biogenic. So that's the other piece of the puzzle. But there are a number of places now where CO2 is being captured and we can use that and combine it and then ultimately it's all about having the lowest cost conversion pathway to get you to fuel with the lowest capex, lowest opex.
Speaker 1:So you've mentioned Ox2. What's your sort of ongoing business model timeline? Are you looking to sort of own operate? Are you looking to sort of develop technology with a view to licensing as well, sort of what's that sort of ongoing business model looking like for you?
Speaker 2:as well, sort of what's that sort of ongoing business model looking like for you? Yeah, I mean great question. So so ox2 is is our kind of first of a kind, if you like, our the, the plant which de-risks our technology. The key thing about it is that we will be using um reactor tube lengths and diameters that will be the same in the commercial plant and the same pellets go in that as go in the commercial plant. So we're fullyets go in that as go in the commercial plant. So we're fully de-risking the technology. At that stage, clearly, there's more engineering around, having more tubes and maybe more reactors, but ultimately it's about de-risking our part, which is the catalyst and the performance of that catalyst. Essentially, at that point we then will look to license and ultimately our plan is to be a licensor of technology. We will basically be selling a technology package as well as selling the catalyst. This is the same.
Speaker 2:As you know, a number of different businesses you'll know today. You know, such as you know, uop, honeywell Johnson, matthey day. You know, such as you know, uop, honeywell Johnson, matthey Topso and even some more engineering focused companies like Technip and Slumberjay. So there's a number of companies already following this business model. Now we can look to get slightly more into the build and operate as well, and we may participate in some of our early projects as well. So it could be a bit of a hybrid. But ultimately our focus is really around having the best catalyst and the best pathway, and that essentially will mean that we will be more focused on the technology side and less on the project development. We may even work with others who project develop our projects for us, our project developers being our customers rather than kind of, you know, being the um, being one ourselves.
Speaker 1:It's interesting the way you talk about the demonstration plan and ox2, because you talk about it very much like an investor you're talking about, you know the de-risking, the, you know the proof at scale. You you're very conscious to talk about how this is, how a commercial refinery has got the same pipe diameters and all this stuff. But it's a really important part of the process that you get these first of a kind facilities and then, in sort of investor lingo, you get to the sort of nth of a kind, the NOC ones, where you can just churn out these facilities and then you see the rapid scale up in production levels. So this is a really important time now, not just for you but for sort of the e-fuel sector in general, as these first of a kind facilities start to come online it.
Speaker 2:I mean it's critical for climate tech in general that we get first of all the kind of plants built. Ultimately, when you look at climate change, you know it's caused by, you know, the infrastructure that we have today emitting CO2 and other greenhouse gases into the atmosphere. That infrastructure, that physical infrastructure, has to change or the inputs to it have to change to reduce the CO2. And that means we need physical stuff built, and if we don't have new technologies, it's going to be extremely expensive. So the key is to basically enable new technologies to come through so that they can then, you know, replace the entirety of, or large parts of, the infrastructure that we have today. But before they can, they're ready to do that. They have to be demonstrated at larger and larger scales. So we have to get used to building first of a kind plants and get used to building things, you know, in order to de-risk them, so that we can then get new technologies scaled and, you know, ultimately making a big impact.
Speaker 2:If you don't build first of a kind, you're stuck with all the existing technologies, only there is no kind of, you know, cost down, and that's not going to be. That's not going to work, is net zero, will just end up being far, far too expensive, and the first of a kind projects actually can save you a huge amount of money in the longer term, because you don't have these huge high profile failures, because you're not essentially going for things that haven't been proven and spending billions of dollars and then finding out things that you didn't know beforehand you guys are also a really sort of interesting example, I think, the sort of pure old school sort of 1970s early venture capital stories, because early semiconductor stories come out of stanford university and then venture capitalists got involved with these new ideas.
Speaker 1:You guys, oxford university, spin out this idea, get venture capital in and there's this. You're going back to sort of this pathway of sort of using universities to develop ideas that come through. Do you think this is sort of a pathway that can be perfect for climate technologies and things like that that potentially needs to go back to sort of being more integral, to sort of help, as you say, develop all these new technologies that can help bring about this rapid change that everyone's looking for?
Speaker 2:bring about this rapid change that everyone's looking for? It's a good question I mean not always but it's critical in some places. There are some innovations that don't need to be based on. You know well over a decade's worth of pure science in a lab, but there are some breakthroughs that have to have that, and you know catalysis is one of those. You know lithium ion batteries was one of those. The you know catalysis is one of those. You know lithium-ion batteries was one of those.
Speaker 2:The inventor of the lithium-ion battery, or one of them, John Goodenough, was based in Oxford and doing some incredibly pure science, solid-state physics, essentially before the kind of innovation happened to invent the lithium-ion battery, and you know similar story in solar cells. There's a huge amount of pure science that needed to go on to physically understand them before you're able to then think about something that's commercial. So in those examples, yes, but there are also many other business models and many other things that we need that don't require big breakthroughs. So it's not all about this, but it is a critical part of getting step change breakthroughs, as I say. Otherwise you are stuck with, you know, existing technologies with software laid on over the top to make it more efficient. There isn't necessarily a step change going to happen.
Speaker 2:You know, if you look at our sector Fisher-T and crops catalysis it's been around for over 100 years but it's only really been used in quite obscure places where essentially countries have either coal or gas in abundance but no oil and specifically don't want to import oil, and they've then essentially built fish and crops plants.
Speaker 2:That's actually a fairly, you know, strange and different use case and it's very different to starting with co2 and hydrogen. So on one hand you could say, yeah, this is a very old, existing technology, let's just take what we have. But if you do that you end up with a complicated process. First you've got to make carbon monoxide, you've got to convert co2 to co, then you've essentially got this fischer-stratz process and then you've got further, further steps on from that. And actually that isn't, you know, in our view at least, the most sensible route to essentially get to hydrocarbons from co2 and hydrogen. And if you go back to the pure science and you understand the thermodynamics of co2 and hydrogen to make fuel and water, you quite quickly realize that this reaction releases heat. It can get there. You just need the right catalyst to get there and you can do it in a single step.
Speaker 1:I think there is a trend, certainly in the last sort of year in terms of SAF, of people trying to develop some simplistic solutions as opposed to, as you say, taking the fissure trough technology and then sort of almost bolting things on to try and make it work in a new scenario and how. This sort of simplicity is actually the key to getting an efficient and cost effective production solution. And it's not just an e-fuels thing, it's the same in biofuels and heifer people coming up with new ways to sort of make the process as efficient as possible. But that and that's a really important aspect as the industry gets to scaling, because you can't have all these rapidly complicated production plants, you need to make the refine, the process, so it's really um efficient, don't you?
Speaker 2:I think we're all about simplifying this process and reducing the complexity of it so that we're then able to scale it rapidly. So you know, we have less steps and that simplifies it and it makes it far lower. On capex, because essentially now we've only got kind of one main unit essentially and we're ready at liquid fuel unit essentially, and we're already at liquid fuel now. You know, yes, you need further steps to then make you know your specific jet a1 or whatever planning components that we need, but those technologies already exist today and so we don't actually need to kind of reinvent them. They are. That is what refineries do they take hydrocarbons and they turn them into other hydrocarbons.
Speaker 2:But the key step that we are kind of simplifying is this ability to make hydrocarbons and long chain ones from CO2 and hydrogen. And, yes, it is all about simplicity and showing people that this can be done and it doesn't need to be, you know, done by stitching together lots of different things that already exist in. You know the world of turning coal, oil and gas into other. In you know the world of turning coal, oil and gas into other hydrocarbons. There is a way of doing it with a new catalyst that can essentially make it far simpler, far cheaper what's your sort of ongoing?
Speaker 1:are you investment sort of strategy? Are you sort of pausing investments now? Are you sort of thinking about future rounds sort of where are you sitting in terms of where investments are at at the moment?
Speaker 2:yeah. So I mean, we've got um, we've got a very strong cash position um, but you know we have got a lot of demand and and people sort of um, you know, interested. So we're probably likely to announce something next year, um, and that will fully fund um ox2 as well as give us plenty of runway in order to move to ox3, which would be our commercial plant. So, yeah, stay tuned um, but should hopefully be able to announce something early next year or or mid next year.
Speaker 1:So any investors listening watch this space, um, and reach out to andrew. I'm sure he'd love to hear from people. What's your position on offtake agreements, because obviously offtake agreements are a crucial part of showing long term demand to investors, as I'm sure you're very aware of. What's sort of your position? Where are you at in terms of signing off takes? Are you sort of waiting for a bit? Have you got lots of off takes lined up? Is it something you're actively working on with airlines?
Speaker 2:Off take agreements are critical. Ultimately, they underpin well, particularly OX3, that will be based on off take agreements. But already we are in discussions with a number of partners. We have our first fuel samples now collected and we're sending them out to our first customers. So they will be, you know, versed in line when we, you know, open up discussions around offtake agreements.
Speaker 2:There is an enormous demand for these hydrocarbons yes, saf, but also we make naphtha, which is obviously the precursor for gasoline but also goes to make chemicals and plastics. We're seeing strong demand for that product as well. So, yeah, we're pretty confident the demand is there. The one thing I would say about off-stake agreements is there is such an obsession around it that people do need to be maybe somewhat careful because, yes, it is a key part, but with demand so high, it can actually be in some ways the easier part. The harder part is actually technically delivering a project on budget, on time that produces, if you know, you know, consistently for long periods of time and people shouldn't sort of, you know, look away from from that. You know there aren't that many plants operating via powder liquids or even biofuels today. So, yeah, people do need to be careful that an off-take agreement doesn't necessarily mean there isn't risks elsewhere necessarily mean there isn't risks elsewhere.
Speaker 1:So another sort of lever of signaling or creating demand are mandates, and there's obviously in europe and in the uk the sub-mandate relating to e-fuels and there's been a little bit of discussion about you know. Is it big enough? Are they enough to signal a strong enough demand to help accelerate and get production online in time for 2030? What are your thoughts on that?
Speaker 2:Well, I mean, firstly, we're very grateful for the work, the hard work that you know a lot of people have done in the UK government over many years to get to the point that we're at today. It's not an easy job. You know we're talking about a very, very complicated field. Biofuels and power to liquids have such different pros and cons it's very difficult to find, you know, the right balance there. And also, you know, within biofuels, you know you've got the kind of vegetable oil or ethanol based versus the others again, a very complicated balance to get right there. So they're doing a good job and you know, the main thing that we wanted, and I think the rest of the industry wanted, was just like get this into law and at least it's a kind of a marker for us all now to to aim at. And that's really what we're focused on. You know, around 2028, 2029, around having OX3 up and running to meet that mandate and we're confident that we can help, you know, meet it and also make profit because ultimately, you know we think we've got the lowest cost pathway.
Speaker 2:You know, what would we like to see? Of course there's always things we'd like to see. We would like to see more ambition for power to liquids out in that in in the later years um, and we also believe that you know, we would like to have seen a um, a bigger differential between the uh, the general staff and and the power to liquids on the buyout price. Um, given the power to liquids, is is still very early. But look, we don't always get everything we want and we're overall very pleased about the work the UK has done and the EU as well. I should mention that I mean the EU has also got some very strong regulation and actually a lot of ambition around powder liquids.
Speaker 1:The challenge with mandates is that generally the timeline for getting a SAF refinery sort of from early stage to construction, is about five years. People are sort of roughly four to five years potentially. And you know we're coming up to that point now where, if we don't, if that process isn't begun early enough, there's going to be a problem come 2030. Process isn't begun early enough, there's going to be a problem come 2030. And then there is a relatively steep ramp up as you sort of look to the mid-30s onto 2040, particularly in terms of esaf. So there is an element of you know there needs to be movement now, soon, in order to not be far behind when you come to sort of the mid 2030s isn't there. So it's not sort of you can't think about it. Oh, it's only two percent in 2030. We've got loads of time. You've got to be pretty proactive in terms of getting all these facilities online yeah, absolutely yeah.
Speaker 2:I mean, we need to get started now and you know these numbers sound small, but they're huge volumes considering where we are today. Um, we've got a huge way to go, but you know, the numbers being so daunting should just be further motivation to get going and get started. It shouldn't be. Oh, you know, it's such small volumes, let's not bother. If we don't bother, then we've got no solution for a sector that needs a solution. More and more people want to fly.
Speaker 2:The data is is clear on that. Yes, you can get some demand destruction maybe with more trains and and you know, I think everyone would be in favor of that but people still want to get over the atlantic in a reasonable time frame. It requires hydrocarbons and they, you know we need a solution for that sector and we need to get started now, and you know there's no time to wait. We can't wait for anything else. So, yes, it is pretty urgent that we get on and start delivering and prove to people that it's possible. I think also, a large element is about, you know, giving people hope and a few generations hope that you know they can, you know, travel to America and not have huge guilt about it. And yeah, so hopefully we can do that and it is possible. We're showing it's possible. We just need you know. Yeah, some time, but ultimately it can move faster than people think.
Speaker 1:The government's not just set up mandates and it's not working on the, not just working on the um guaranteed staff price for later in 2026. It's also got the advanced fuel fund grants that it's handing out, which is a really sort of powerful indication of how proactive the government's being and you guys benefited from from those. So how do you view those? Obviously, you know grants are great things. I was speaking to um, to a multilateral banker a few weeks ago and he said everyone wants a grant. So, um, and not everyone can get grants, but how helpful are grants in allowing you to do what you do and for sort of short term cash flow?
Speaker 2:We were very grateful for the grant. We got two point eight million from the AFF fund and, yeah, very grateful for that support from the Department of Transport. Grants can massively help, but they aren't the ultimate solution. Ultimately we need projects that stand on their own and that's what I hope that the SAF mandate, along with the revenue certainty mechanism, does. We don't want to just be reliant on grants indefinitely. We want to make and build projects that stand on their own two feet. So, yeah, we're very grateful for that and it's definitely been a big boost and we appreciate all the support from, you know, the Department of Transport, around SAF. We hope to see more with the new government as well. But ultimately the plan and you know everyone's goal is to essentially make projects that are commercially viable and not dependent on grants. Now, you know everyone's goal is to essentially make projects that are commercially viable and not dependent on grants. Now, you know commercially viable. I guess you would say, well, if they've got, you know, the SAF mandate in place, then you're still being subsidized. Yes, but it's different to a grant for those plants is that you know the amount of um, you know support that's required.
Speaker 2:You know decreases over time as the cost of power to liquids comes down through process innovation like ours. But also, as you know, more renewables gets rolled out. You know, the the more and more wind gets put in the north sea, electrolyzer manufacturers, you know, scale up and massively reduce the cost of electrolyzers. Co2 becomes abundant in all the uk clusters. So there's lots of good news, I think, to come around that. And so you know we do hope eventually we can get to a point where you know we're not too far off where biofuels are today. So two or three times you know the fossil fuel price, ideally getting even lower below that. But you know if you include CO2 prices and the oil price is going to vary. You know, as long as you're kind of two or three times, you can actually seriously look, you know, very, very competitive.
Speaker 1:I think it's all about creating that sort of ecosystem of solutions around decarbonization. It's not just a. As soon as you start thinking about it as a big decarbonization project in sort of across the whole economy, rather than just an aviation decarbonization project, there is a lot of interrelation between all the other sectors and how they decarbonize. So the the wider, the more ecosystem approach you get to it and building a sort of a wide policy structure around that, the more beneficial and more you can expedite the decarbonization process.
Speaker 2:Yeah, I mean totally. I mean we are a huge growth market for the renewable energy industry, for the hydrogen industry, for the CO2 capture industry, with firm offtake, with buyers who are keen to buy even today, even without mandates, voluntary markets for small amounts of people who want to physically buy SAF via a booking claim. So, yeah, there's huge synergies between these and it shouldn't be seen, as you know, um, the renewable industry versus you know, another industry. We are actually tying together a lot of the bits that you know currently are not kind of tied together, seen as distinct, um, by combining the huge growth in renewable energy with, you know, the inherent benefit of hydrocarbons be that the energy density in the benefit of hydrocarbons, be that their energy density in the case of aviation fuel, but just their inherent properties in the case of chemicals and plastics were enabling renewable energy to penetrate into those markets that otherwise they couldn't.
Speaker 1:So I'm going to end with one final question. It's not a very big question, so it's fine. What are the major challenges for esaf and powder liquid production in the uk that you're all facing, and what do you think are the major challenges for growing esaf production globally right now? What needs to be sort of overcome in order to expedite esaf production?
Speaker 2:lots of challenges, lots of people motivated, though, to solve them. Um, we need more renewable energy. We need to keep going with wind. We need to keep going with um, with solar, you know, maybe more nuclear hydro as well, um and storage. We need more electrolyzers and we need the electrolyzer industry to scale up. We need processes like ours to make the, the conversion, more efficient. We need more co2 captured rather than emitted, particularly from biogenic.
Speaker 2:Eventually we'll move to direct air capture, but you know that's not needed today. We need more skills, we need more engineers, more people motivated to solve these problems, not just software problems but hardware problems. We need sites, we need planning permission to be made more efficient. But ultimately, all these problems I've just mentioned, or, you know, there are people dedicated to solving them and you know, if we can solve them, there's huge, huge benefits, you know, for SAF, but also generally for growth, for the UK, but also employment, and ultimately it's about essentially creating the refinery of the future, so that, essentially, we can continue to use these hydrocarbons. But we've just now made them in a different way and we've got less emissions associated with them. But we've just now made them in a different way and we've got less emissions associated with them Amazing.
Speaker 1:Well, on that positive note, Andrew, thank you so much for giving us your time.
Speaker 2:That was. That was excellent. Thank you for having me.