The SAF Podcast

The SAF Podcast: Refuels - Aviation staying on the road to decarbonisation

• SAF Investor • Season 3 • Episode 1

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After a potentially too long break to end 2024. The SAF Podcast is back in 2025, a year set to have significant importance for the burgeoning SAF industry.

For our first episode Oscar sits down with Philip Fjeld from Refuels. As the UK and EU SAF mandates take effect in 2025, Fjeld shares valuable perspectives from his decade of experience in the biomethane industry and his role at the Renewable Transport Fuel Association (RTFA).

 The discussion delves into crucial market dynamics, examining how feedstock competition between SAF and biodiesel production could impact both sectors. Fjeld provides expert analysis on the challenges facing the industry in 2025, including the recovery from recent market disruptions caused by allegedly fraudulent feedstocks from Asia. He offers compelling insights into the differences between biomethane and waste oil feedstock availability.

The episode also explores critical policy mechanisms, comparing the established Renewable Transport Fuel Obligation (RTFO) with the new SAF mandate. Fjeld discusses potential challenges with the HEFA cap implementation from 2027 onwards and draws important lessons from the development fuel mandate experience in road transport. This episode is essential listening for SAF industry professionals seeking to understand the broader implications of transport decarbonization policies and their impact on feedstock markets.

A considerable amount of thinking in decarbonisation is siloed and this episode finishes highlighting the importance of  inter-sector collaboration to decarbonize transport. We discuss the intricate balance required between road transport policies and SAF mandates, highlighting the potential competition for vital feedstocks. Fjeld shares his vision for a diversified approach, advocating for aggressive blending mandates in the UK and a holistic view of alternative fuels' roles in maritime transport.

You can check out this full discussion on all the usual platforms and on our website: https://www.safinvestor.com/the-saf-podcast/

Speaker 1:

Hello and welcome to the SAF podcast. Welcome to 2025. It's a big year for the SAF industry, we hope, with UK EU mandates coming into play, lots of projects scheduled to come online and, hopefully a lot more investment and strong demand signals from across the aviation sector. We're going to start 2025 on a slightly different note than our normal episodes of the SAF podcast. We're going to be looking at the road transport scene and biomethane and what aviation can learn from those more established sectors, as well as potentially some of the unintended consequences of large scale SAF industry growth, and looking at this global decarbonisation problem and how it affects and how it can be resolved across multiple sectors, not just in aviation. So this week I'm delighted to be joined by philip fjeld from refuels and philip great to have you with us thank you, oscar.

Speaker 2:

Happy new year. I think we can still say that yeah yeah, I'm delighted sorry, go ahead.

Speaker 1:

We are recording this on the 14th, I have to say, and Philip, before we went live, said that we're allowed to say that until the end of the 15th. So if it comes out after that date, that just explains why we're still saying happy new year to each other. Um, philip, before we get into the sort of nitty-gritty of it all, do you just want to explain your background and a bit about what refuels does, because especially a lot of our listeners might not necessarily be aware about what you guys do absolutely, and thank you so much for inviting me and having me on the show.

Speaker 2:

As you say, 2025 is a is a is a special year for everyone who's following SAF. So I'm the CEO and founder of Refuelz and basically it's companies below. Refuelz is a holding company. What is it we do? We build very large public access truck refueling stations in the UK for now, but we'll end up expanding internationally, where we typically refuel articulated trucks these are the big ones you see going up and down the motorway with something called bio CNG, which is essentially compressed by a methane.

Speaker 2:

Bio cng, which is essentially compressed by a methane and by methane um, is 100 renewable and sustainable gas that is produced from typically a waste feedstock. It could be food waste, sewage sludge, um other agricultural waste and residues, etc. Etc. Um. So we've been doing that for 10 years. Prior to that, I was also working in in the gas industry, so in the LNG, international LNG industry. So I've got a background in business and as a founder for the last 15 plus years in the gas industry.

Speaker 2:

And what you might wonder is well, hang on, you know you're in the gas industry. Why is this relevant to SAF? And hopefully we'll be highlighting some of those crossover points later on. I'd also like to add I am a director of the RTFA in the UK, the Renewable Transport Fuel Association, which is the main biofuel association in the UK, not only for biomethane but for biodiesel, bioethanol, and the RTFA has been a very important factor and a very important organization in getting the SAF mandate through and advising the Department of Transport on, I think, how we can have a successful SAF mandate. So I'd also like to give a bit of background that I do look at things much more broadly than just through my day job, which is, of course, managing and and running a company that does biomethane. I also have a director hat through on, a director's hat on, which also means that I have insights into what goes on in the biodiesel industry, saf industry and so on and so forth so I think that's a great place to start.

Speaker 1:

So we people will probably think initially, why does you know a holding company that does biomethane truck refueling actually care what goes on in aviation? And on the flip side of that, why should aviation and SAF people actually think about what's happening in the road transport scene? So what is your interest in the SAF market, sort of broadly from your sort of business's point of view?

Speaker 2:

So with one of my hats on the director's hat on for the RFA, you know I'd like to see as much of transport decarbonized as possible, whether that's road, whether that's aviation and, at some point in time, maritime. Maritime is the one that's kind of left and probably one of the really really hard, hard nuts to crack. So I of course want to see as much decarbonization going on as possible, with as many fuel vectors, if you want, as possible. If I then look at what we do, so we source biomethane across Europe because it's not just in the UK. We are one of the largest buyers of so-called unsupported meaning unsubsidized biomethane across Europe and we put it into transport here in the UK. In the UK we operate under a policy framework called the RTFO Renewable Transport Fuel Obligation, which is the main policy to decarbonize road transport in the UK. When it was established, that was established mainly as a liquid fuel obligation, which is looking at petrol and diesel Since then. But in the last five to 10 years biomethane has been added. You know hydrogen in there as well. There are other fuel vectors coming into the mix, but biodiesel still dominates the amount of fuel that is supplied under the RTFO.

Speaker 2:

For some of your listeners maybe not all of them they will know that up until 1st of January this year, you could generate so-called RTFCs certificates under the RTFO by putting SAF into aircraft at Heathrow, as an example, both in 2023 and 24, and maybe earlier as well, but I know at least there was a substantial volume that went into 23 and 24. So some of your listeners might already know how the RTFO works. Okay, because we also generate certificates and supply this under the RTFO. But the majority of certificates under the RTFO are generally produced by the obligated parties, such as the large liquid fuel suppliers, the BPs and the shells of the world and the others. We, as biomethane suppliers, we essentially end up being a price taker of RTFCs. So what does that mean? That means that the value of an RTFC is essentially determined by the spread, the price spread between fossil diesel and biodiesel. Okay, and that brings us sort of on to how we interplay with SAF and I think later on we can maybe discuss, maybe provide a bit of clarity around and a bit of input as to what has been successful under the RTFO and maybe other things that haven't been quite as successful now that the SAF mandate has come into play.

Speaker 2:

But of course, as we know, the vast majority of SAF will come from heifer All right, and heifer, again, is going to essentially be using used cooking oil and tallow, most likely.

Speaker 2:

Used cooking oil and tallow is also used for biodiesel for road transport All right, and we do know that there's not an unlimited quantity of sustainably sourced yuko around and we also know there's not an unlimited quantity of sustainably sourced tallow around, which is why everyone is is looking for other other waste fats they can use through the heifer process and, of course, different production methodologies and different production technologies for SAF.

Speaker 2:

So, whether we like it or not, the interactions between the SAF mandate and the road transport mandate will be there and it will affect my business, our business, and also, I think it's going to go the other way, where SAF will have an impact on the availability of feedstock for road transport. But of course, what happens in the road transport sector will also have an impact on how much feedstock that sector needs. So that's really why and that's why I'm fascinated by you know, I attended a bit of a workshop think tank yesterday which was mainly road transport based, but even amongst I don't know 30, 40 people there, very diverse background, the SAF topic came up again and again and again, because there's no hiding that the two will impact one another.

Speaker 1:

Focusing sort of short term initially, just sort of on this first year of the mandate. What pressures, market pressures do you see? Are you sort of keeping an eye on this year, with the mandate coming into place, that potentially could have an impact on your business or sort of on the road transport sector more broadly?

Speaker 2:

Well, it's going to be an interesting year for many reasons. Clearly, the mandates just come in, but also because the biodiesel sector, and to some extent, the SAF production sector, is likely now emerging from what has been a very tough 18 to 24 month period where Europe, in particular, has been flooded by allegedly fraudulent or mislabeled feedstocks and biodiesel coming out of Asia that, I think, hasn't fully washed through the system yet. You know, we are one step removed from this, clearly because we aren't biodiesel producers, we're not biodiesel traders, we don't source feedstock, but you know, through what we do day to day, we, of course, speak to a lot of these people and to me it's clear that the biodiesel sector and the heifer, you know, the SAF production sector is coming out of a very challenging period where margins have been absolutely crushed. Plants have been shut down, crushed plants have been shut down and I think there's also been. It hasn't been good for the sector overall that there has been so much allegedly mislabeled, slash, fraudulent stuff floating around, because it actually, you know it really eats into the credibility of what we'll do. So 2025, I think, will be a very interesting year where hopefully we'll have a more rebalanced market, margins will return. So it'll be a bit more healthy from both a biodeasel but also a SAF production perspective. But probably and once again you know we're not experts in this market but probably it's going to take a bit of time for the market to find its equilibrium, for the market to find its footing.

Speaker 2:

We all know that there's a lot of staff that needs to be put into, uh, air transport, you know, air transport in and aircraft in the eu and the uk.

Speaker 2:

Um, the market seems to say that's going to be fine for this year, but what does it mean for 2026? So I think 2025 would probably have been an even more interesting year with regards to as a gauge for what the future would give, had we not had two really tough years previously. So I'm more looking, I think, to 2026 to see what is the genuine impact on availability of feedstock, feedstock pricing, because, as I previously mentioned, Yuko and Tallow can be used to produce both. Right can produce HVO that goes into road transport, or Yukome that goes into road transport, or it can be used to produce SAF, and I think we all expect SAF, probably over time, to have a higher willingness to pay than road transport, initially at least. So what I'm looking at is really. Are we going to start to see pressures already on feed stocks this year? And I probably thought of convincing myself that it might not be this year, it might be 2026.

Speaker 1:

Is that because the mandates aren't at a sufficiently high enough requirement? Because although we say the mandate started, it's not a high level of SAF requirement, it's still quite a small portion. So is that the leader for that?

Speaker 2:

Yeah, it's two there. The SAF mandates they ramp up quite quickly. But you know, 2025 it's two percent. I think heathrow did one and a half percent on a voluntary basis last year. We're not that far away from two percent. Um, clearly, from 26 onwards it really starts to ramp up and of course other countries and there'll be voluntary demand elsewhere as well to start using SAF feedstock markets. The waste oil feedstock markets, I think, are probably more favorable currently towards supporting both SAF and HVO production this year than they might be next year, because we've come out of this really tough period where there has actually been subdued demand for those feedstocks. So therefore there's a bit of extra buffer in it if you want to get us through 2025, but 2026 might become a much tighter year potentially.

Speaker 1:

Looking specifically at biomethane, do you see more of an impact on the balance price of biomethane as a result of SAF or do you see it more leaning towards sort of the volumetric availability? Where do you see the major sort of challenges being for biomethane?

Speaker 2:

I wouldn't say the volumetric availability we have. So that's also where I think this becomes a really interesting discussion, at least for me, because people can't really see biomethane being used as an aviation fuel. Yes, you could theoretically run it through a GTL process, but it becomes very expensive and there's probably not going to be a lot of demand for it. And there's probably not going to be a lot of demand for it. But where? From our perspective, if you look at the feedstock availability for biomethane, that is fundamentally different than what it potentially is for the waste oil sector. Why do I say that? Because the biomethane production process typically consumes a lot of feedstocks that can't be used for anything else. Now, if you can imagine, or if your listeners can imagine, a you know, for those who have a sizable garden, they might have a compost heap at the bottom of a garden, right, you can put anything organic on there and eventually it rots right. Now that's essentially what you can do with an AD plant. You can put all kinds of wastes and residues in there which you can't really use for any other production process. So feedstock availability for biomethane is not going to be a problem for many, many, many years to come across Europe.

Speaker 2:

Various sources of information expect that biomethane production will probably, as a minimum, be 5x across Europe by 2030. So I wouldn't say there's necessarily going to be a volumetric impact on biomethane. But clearly pricing here is important because at the end of the day, we rely on certificates. Those certificates are priced according to a different fuel and that again feeds through to what biomethane producers will want for their product. So I think that's where there's a there's an interesting dynamic, which is why I wouldn't call it unintended consequences.

Speaker 2:

But maybe consequences that people haven't really thought much about is that when SAF comes in and parallel to the RTFO, there are going to be opportunities but also risks and challenges as to how those two policies interact and how they push and pull on one another. So from our perspective it's more of a pricing question probably here than rather the volumetric one, because we don't. Whilst I think the industry, the global industry, essentially agrees that biodiesel and heifer, you know, saf production has some pretty serious challenges with regards to the availability of feedstocks, that's not the case with biomethane, because there's just so much feedstock that's still available from the waste and residue sector out there that we've still got a long way to go before. We're even getting close to seeing a shortage of feedstocks.

Speaker 1:

You're mentioning the certificates and the effects or sort of the resulting effect that SAF may have on them and the prices of those. There are sort of certificates and the certificates you can get from SAF is very nascent comparatively to the certificates you get under the RTFO and the road transport space. Just have you sort of looked at those and sort of do you see any sort of the comparisons between those and if sort of SAF can take a lot from the road transport certificates and the sort of those certificates under the RTFO and implement them into creating a stronger market for a carbon market for aviation?

Speaker 2:

Yeah, it's a good question. Well, first of all, I mean, you can't use one certificate to fulfill the other obligation, vice versa, right? So they're in two, two separate silos, if you want, although the feedstocks that you can use here, of course, can can be, can can be used in both. Um, what we've seen with the rtfo so, which is the road transport policy that's been in place since basically 2008, all right. So 16, 16, 17 years now, um, whilst you'll always find, you know someone who can criticize it and say it's been a, you know, it could have been better at this than compared to that, I think there is an overall consensus amongst pretty much anyone in the, both in government and in industry, that the Rtfo has actually been very successful. Um, it's been extremely well managed by the Department of Transport. It's a market-based mechanism, um. So, as such, we see and I'm a firm believer that the market knows better than necessarily what, um you know a directive or someone within a government or a committee can decide. So, as a market-based mechanism, it's been hugely successful and it has brought in and has been successful in filling the mandate. Now we can maybe chat a bit in a bit whether that mandate could be even more forward leaning. So I think that the way the SAF mandate has been crafted is not that too dissimilar to how the road transport fuel obligation works, and that's been a success.

Speaker 2:

The one challenge I do see, though and this is not an easy nut to crack is From 27 onwards there is a heifer cap, and because we want to encourage and UK government wants to encourage that we get more novel production pathways, novel feedstocks, into the SAF mandate, we've got something similar in the road transport sector, which is the development fuel mandate or development fuel certificates. What we've seen there is that that has not been as successful as one would have wanted. Now, why do I say that? Because, essentially, the vast majority of the obligation has been bought out, meaning it hasn't been successful in bringing in enough so-called development fuels, which are I won't get too technical here but which are certain advanced novel production pathways from different feedstocks which are then brought into road transport as fuels. So the majority has been bought out, which of course, isn't really good for anyone, because what you end up then doing is you don't really have carbon savings and you just end up with let's call it a tax on the use of that fuel use of that fuel.

Speaker 2:

So that, I think, is one of the key challenges for the SAF mandate is how can it ensure that the heifer cap and then the volume of the SAF mandate that's above the heifer cap but that doesn't end up being bought out? Because clearly no one wants it to be bought out, because then we're not seeing industry being built, we're not seeing novel pathways being successfully commercialized, and so on and so forth. Now I don't have enough of an answer there whether the buyout prices have been set correctly. I don't think anyone knows, to be honest. I mean, yeah, there's lots of opinions whether they are or not.

Speaker 2:

But I think one of the lessons learned probably from the road transport sector is that that needs to be closely studied, and I know there is a revenue certainty mechanism that will likely be introduced. All right, I get that, but once again no one really knows how that's going to work. So I think that entire part of the SAF mandate, while it's well intended and of no fault of anyone and of no fault of anyone, has substantial risks to it, just purely because it takes time to develop projects. It's you know, you, you're reliant on funding, environment, you're reliant on permits coming through, you're in. You're reliant on feedstock supply chains and so on and so forth. So that, to me, is probably one of the key lessons learned from the road transport sector is you, so it might not turn out the way everyone intended it to, and if that happens, probably an intervention should happen sooner rather than later so you're not left with, let's say, five years, like we've had in the RTFO, the road transport fuel sector, where we've been seeing buyout, where we've been seeing buyout.

Speaker 1:

Is there not a potential of if you see, you know, copying this, the buyout price is set too low and you start to see these sort of novel technologies, these e-safs, powder liquid safs not coming online at all or at the speed that the mandate says they would, is not going back and sort of adjusting that sort of after the fact in response to what's going on in markets? Could that also have potentially negative effects? So is there, can you go back and change it, or is it sort of something you've you've got to look at, maybe extending the timeline now if you don't think it's reasonable, in order to just buy that more time? Is there a do-over button? Is basically what I'm saying.

Speaker 2:

Yeah, it's a very good question and I'm not sure this is right or wrong answer to that. Uh, I can give one example, though, because what we have to remember here is none of us can accurate, pretty accurately, predict the future. Okay, your crystal ball gazing is probably as good as mine, all right. And anyone who claims they've got an amazing crystal ball, they're not telling the truth anyway, because we don't know exactly what's going to happen. Marketing, market conditions change, um, market conditions change and policies around us change. All right, you could have policy implementation in the US. You could have policy implementation in some of the large you know aviation fuel consumers, as an example. When we're sticking with the SAF policy in Asia, as an example, all that could happen six weeks from now could happen three years from now. Who knows? Right, market conditions change. Just like we were talking about how SAF and you know SAF production and HVO production, biodiesel production are both using the same feedstocks. Right, you can have policy changes as to approving different feedstocks. So we live in a dynamic space, and I get your argument that, yeah, could that erode confidence? I think probably. What erodes more confidence is if the market changes, and the market here includes or if external factors change, both market and policy factors outside of our control change, then we need to react to that, and I'll give you one one example.

Speaker 2:

So when the, when the rtfo mechanism or rtfo policy was brought in in 2008, we basically had a had a buyout price of 30 pence, so that was a theoretical max price for a certificate, for a road transport certificate. That was sufficient for many, many, many years. Then, of course, lending mandates have continued to increase, not just here but in the EU, and so on and so forth. So then we got to a situation in 2019, 2020, where you could see that the cost of sourcing feedstock, typically for biodiesel and producing biodiesel, meant that it was, you know, bumping its head. If you want up against the 30p level now, then you would have gone into territory where the price of biodiesel isn't determined by uk demand alone. All right, we've got lots of other demand factors, supply and demand factors.

Speaker 2:

So what then happened was the department of transport said okay, the world has changed since we did this in 2008. I know we're here talking in a 12 year perspective, but external factors have changed. They did a fairly swift consultation and the buyout price was lifted to 50 pence, and that has proven to be sufficient. Today, the trading at 26 pence. Okay, they've come down, but what? What did happen was up until we had, you know, allegedly fraudulent Chinese stuff come in to really crash the European biodiesel market. The RTCs were trading in the 30 to 40 pence range. So that was done as a necessity, because external factors changed.

Speaker 2:

So I don't think it's necessarily a bad thing if the department of transport says, you know, in two years from now, to say do you know what we think? Maybe we need to revise this. The question is then how quickly can they do it? Because I know it's not an easy process. They need to discuss internally, then they need to consult, then they need to provide a response to the consultation, then they need to discuss internally, then they need to consult, then they need to provide a responsible consultation, then they need to get parliamentary time, and so on and so forth. So yeah, I'm probably a bit more of a pragmatic person, but if we, you know, if things change just because we couldn't have predicted them two or three years ago, then we just get on with changing them, because it's the right thing to do.

Speaker 1:

Three, years ago, then we should just get on with changing them because it's the right thing to do. You preempted my follow-up because my follow-up was going to be. The ability to change is reliant on the speed of those changes. If the changes take years to play out, particularly in the case of saff, we've got a massive ramp up over a five-year period working into that. You know the relaxing of the heifer cap and the sub-mandate related to e-fuels. There's a lot of working parts there very quickly. Compared to biofuel, as you said, it was 12 years before a change came in because that market was presumably more stable.

Speaker 2:

I'm not a road transport expert but that sort of length of time sort of foresee changes and see them coming and realize you can make an adjustment is drastically different between the two, those timelines I completely agree and I think you you really point out an important factor there and that is that the way, uh, you know I was saying the rtO has been incredibly successful and it's been a very, very well managed policy.

Speaker 2:

The team at the Department of Transport to do it are, you know, in my in, in our book, are stars, because they are, they, they, they really they really listen, they really accommodate and it's yeah so. But of course, the one drawback I do have with the RTFO is that it's under its current construct, it's hard to make fairly, fairly swift changes. Now, if you look at some of the going to road transport here again, you know, if you look at some of the road transport policies similar to the RTFO in Netherlands, germany, etc. They have much shorter decision-making timelines to make changes. So therefore they can react and they're much more reactive. And I think that's maybe one of the risks going forward is that this, in order to make changes that maybe everyone agrees to, make changes that maybe everyone agrees to and sees as as required, could take 12 to 18 months.

Speaker 1:

I mean that was one of the big issues that, from speaking to people I have with the um, with any sort of contract for difference sort of thing, with saff, mandate comes in this year, the timeline for that is end of 2026, yeah, and that that time those timelines don't necessarily match up to actually create a market condition whereby it's actually benefiting industry, just because there's too much time differential between the two. So I think that's one of the big worries, couldn't?

Speaker 2:

agree more and and I and I I don't have an answer to that because, at the end of the day, you know I'm not a civil servant, etc.

Speaker 2:

But but I, I, I hope that's something that they will uh, I know they're aware of it, um that that that could be addressed in the future, and also for road transport.

Speaker 2:

You know, if we, if we get into a scenario here I I'm thinking two years out where there is indeed fierce competition for feedstocks amongst the two sectors, saf does turn out to be having a higher willingness to pay for various reasons, the road transport sector does find itself fairly short then maybe the 50 pence per RTFC buyout price might be a problem for the road transport sector. And of course, none of the obligated parties, none of the large fuel suppliers in the UK, liquid fuel suppliers in the UK, liquid fuel suppliers in the uk want to buy out, because if they do so it's not great publicity for them, it's not great publicity for government, because you're essentially just collecting some money, handing it to to treasury and you're not greening anything, all right. So so it's a. It's a lose-lose, um. So yeah, the inertia maybe on making changes here is not only something that I'm concerned about for SAF. In a rapidly moving environment, it's also something that the road transport sector will need to deal with, probably in the future.

Speaker 1:

You touched on it there in terms of the competition for feedstock and, as part of the EU policy, the Red 2 policy structure. There's the label hard to abate sectors, aviation being sort of one of them, and how they get priority in terms of those sectors because they are, by definition, harder to obey. Do you see that label becoming problematic for accessing feedstock, for road transport going ahead, or is there enough? Or are you hoping technology develops and there's enough variety in pathways coming online? Could that label become problematic?

Speaker 2:

line. Could that label become problematic? Potentially um? Once again, I don't want to be. Yes, I see that risk for sure, absolutely um. But I also think it's too early in the game. If you want too early in the day to, you know, be uh, to to firmly sort of put my feet in the, in the, in the, in the concerned negative camp. On that one, there are. You know, if I sort of move that across slightly to to, one of the key concerns here in the UK is, of course, of certificates, which is the majority of volume of fuel that today is supplied under the road transport mandate in the UK today is biodiesel. Right, we have a crop cap which means that we can only provide so much first generation, basically bioethanol, into petrol. So therefore the majority is coming through road by diesel today. You know what you know I'm a strong advocate of is listen, I'm not, and this might sound a bit counterintuitive because you know we've already been talking that there might be, there will be competition between SAF and road transport for the same feedstocks particularly.

Speaker 1:

Yuko and Tallow as an example.

Speaker 2:

So then you might wonder well, why is he now going to advocate for even more aggressive blending mandates in the UK? Know, um, even more aggressive blending, blending mandates in the uk? Because if you look at the the uk um, how we decarbonize transport in the uk, right, there's a lot of focus on electrification. There's a lot of focus on on on passenger cars going, going, going, eating, all right, um, we've got a phase update for those, and so on and so forth. But there is so much more. As an example, there's so much more second generation ethanol could do waste derived ethanol. There's so much more biomethane could do in the sector. So, therefore, thereby freeing up valuable feedstocks that could go into SAF, all right, so a bit of a win-win.

Speaker 2:

So I think, both in the UK but also across the EU, we are missing a couple of tricks here. You know there's been so much focused on Heifer or SAF versus HVO. There's been so much focus on that they've sort of they're not really understanding or don't want to understand or don't want to listen to the fact that you know biomethane production will be at least 5x in the next five years, that you know biomethane production will be at least 5x in the next five years and that that alone could really come into the transport sector and can thereby free up valuable or feedstocks that are maybe better used, at least for the next five to 10 years, in the SAF vector. So I think that's one of the key messages here is just because there's fierce competition doesn't mean that we just need to stand back and say, oh, it's really hard to fix.

Speaker 1:

There are other alternatives that can play a very important role for the next 5, 10, 15 years as a bridging solution, if you want, that's fine, but as a very valuable bridging solution where we can basically turn two plus two into five or six, instead of just complaining that you, you're struggling to get two to two plus two to turn into more than four this is one of those sort of you're coming from a point of view that sort of transport should look to decarbonize, as opposed to aviation looks to decarbonize its emissions, and road transport and sort of those silos, looking at it more holistically, across the whole spectrum, because some biomethane might work better for road, as you said earlier, it's too expensive, probably to convert into SAF, so then you can pour more into that sector, freeing up more alternative, uh, uco to go into the heifer pathway and vice versa, and then you get marine into the the space as well.

Speaker 1:

Do you think there needs to be I mean, we've had a a really interesting discussion about the interrelations of policy between sectors um, do you think there needs to be more sort of collaboration on that front between sort of aviation and road and marine? Do you think there could sort of be more constructive conversations across across those different sectors?

Speaker 2:

for sure, guaranteed. And if you look at marine, all right, there's lots of talk about um, about ammonia in marine. I mean, I've got a background from the shipping sector in the past. I can tell you that, the way I look at the world, ammonia is not going to play a big role for a long, long time to come. Now, me predicting things beyond 2035 is completely meaningless, because I'm just going to go on.

Speaker 2:

Yeah, but speaking to people who I still know in my old world, if you want, with regards to the international ship-owning world, a lot of it is going to be LNG, a lot of it is going to be bio LNG, a lot of it is going to be biomethane going into shipping, all right. So I completely agree with you. I think we are there's too much blinkered, there's too much of a bit of a blinkered view here, to some extent sector specific view, too much of a bit of a blinkered view here, to some extent sector specific view. And I also pardon sorry for using the strong word but also detest when people are trying to to, you know, to determine winners. All right, it's a very it's a very dangerous thing to do, because none of us can accurately predict technological developments, market movements, policy movements outside of our control, and selecting winners is not a good thing to do. I think we should instead take one step back and say all right, let's try and save as much greenhouse gas emissions as we can across the sectors, let's get as many feedstocks, as many production pathways into this as we can, and not necessarily be so blinkered and siloed. And I get it, you've got different teams working on different policies, potentially, but there needs to be some joined up thinking here, because I do genuinely think we are missing a trick, whereas an example we could get more biomethane.

Speaker 2:

You know second generation ethanol, other types of fuels. You know even biodiesel. That's not your 100% blend, but maybe you know 10, 20% blend biodiesel. I wouldn't call it a lower grade biodiesel, but just because of how the engines work, you can't necessarily run them 100 okay, but there's a lot of volume there that could go into the road transport sector and free up some of the other feed stocks that can then go into south. So, yeah, there needs to be joined up thinking there. Whether we'll get it, that's a, that's a, that's a yeah, a question to be answered another day, I think.

Speaker 1:

Well we can absolutely be hopeful that that day becomes a reality. Hopefully that's sort of opened some of our listeners eyes and sort of the interrelations of how SAF extends beyond aviation and interacts with other transport sectors. Phil, thank you so much. That was a. I certainly learned a lot from that conversation. So, thank you, thank you so much, oscar.