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: Jim Stonecipher - Fulcrum BioEnergy and a cautionary tale for SAF Production
In this episode of The SAF Podcast, we are joined by Jim Stonecipher, Managing Director at EdyMac and former executive at Fulcrum BioEnergy.
With over 30 years of chemical engineering experience, Jim offers a candid, behind-the-scenes look at Fulcrum's high-profile journey—from promise to Chapter 11 bankruptcy. The company's ambitious vision to convert municipal solid waste into sustainable aviation fuel represented a promising technological pathway, but faced numerous obstacles—from COVID-related supply chain disruptions to fundamental issues with technology scale-up and integration.
The conversation explores the delicate balance between technological development and financial reality, revealing how the notorious "valley of death" between pilot demonstration and commercial deployment claims so many promising innovations. Stonecipher advocates for more thorough engineering work early in the development process, describing it as "intelligence gathering" that identifies risks before they become expensive problems.
At the heart of Stonecipher's message is some crucial advice for technology developers: pilot testing must be comprehensive, integrated, and representative of what will be deployed at commercial scale. "The more you can mimic at the pilot scale," he explains, "the higher your chances of success." This lesson, while seemingly straightforward, runs counter to the pressure many startups face to move quickly toward commercialization to satisfy investor timelines.
The conversation also delves into investor relations, capital stack composition, and how early-stage decisions can make or break long-term success. Jim explains that he sees promise in more modular, incremental approaches to scaling SAF production—starting smaller, proving performance, and then replicating successful units rather than attempting massive facilities from the outset. This "Lego-style" approach could help bridge the gap between technological promise and commercial reality.
If you enjoyed this episode check out our previous episode with Smitha Hariharan, Gulfstream here: https://www.buzzsprout.com/2202964/episodes/17362935
Hello and welcome to another episode of the SAF podcast. This week I'm delighted to be joined by Jim Stonecipher, who's the Managing Director at Edimac, who was also previously with Fulcrum Bioenergy, and today what we're going to do is we're going to have a look through what happened at Fulcrum Bioenergy, see what the lessons that the industry can take from it and see how the understanding of what's required to get projects online has adapted and evolved over the last few years. But before we get into that, jim, thanks for being here. How are you?
Speaker 2:Very good, very good. Thanks for having me, oscar. I'm really appreciative of the opportunity to talk.
Speaker 1:Absolute pleasure. Thanks so much for giving us your time. So do you just want to give us a bit of your background, maybe sort of before Fulcrum and then sort of what you did at Fulcrum and then sort of what you're doing sort of more recently and now, just to give sort of a sense of your career trajectory?
Speaker 2:Yeah, so you know my background is in chemical engineering. I've got over 30 years of experience in the business. Background is in chemical engineering. I've got over 30 years of experience in the business. Over the years, you know, my career tended to focus a bit more on newer projects, bringing things to market, starting up facilities. I ended up working my very first first of a kind type of an operation when I'd only been out of college about three years.
Speaker 2:So it was an interesting aspect. I didn't realize, you know, there was such a thing as folk at that point. But you know, looking back in hindsight, you know it was very similar to a lot of the things that I'm doing today, which is around, you know, turning waste into something more valuable, and so that's the premise of what a lot of my career has revolved around. And over the time, you know, building up different facilities, building up new teams as you start to create those facilities, has been a real center point of my whole career. When I came into Fulcrum in 2019, my premise was to build the plant with the construction team and get it operation more, being a startup company and doing it in the middle of COVID and all the other aspects that we were working with. That's kind of my background and took an MBA along the way, so I've also got some business sense about me too, in addition to the engineering.
Speaker 1:I heard you can basically get an MBA by reading books like what they don't teach you at Harvard Business School and the second edition of that. So did you go the proper route or did you just read those books?
Speaker 2:No, I actually did the proper route and got my degree and the whole whole shooting match, so that was fun part of being able to build an additional network and do things.
Speaker 1:I'm just going to make it clear. I'm not suggesting reading those books isn't any way a substitute for getting an MBA.
Speaker 2:I've had people say something like that before, though, is this short segment in classes is really, you know, like an mba, that's, you know, just sort of a primer so, um, and what are you doing now?
Speaker 1:um, with eddie mack, and can you tell everyone what? Why it's called eddie max? That's a.
Speaker 2:That's a really nice story so you know, from my perspective, uh, when I decided to leave fulcrum at the end of 23, my wife and I talked about setting up a consultancy how can we help others be successful in new businesses and new startups?
Speaker 2:A new facility startup where I had some employees that were, you know, a little bit upset about the duration of the startup, how it was so uncertain and things weren't going as you know. We'd like to on the schedule and I sat everybody down. This was like at 6 am in the morning, at shift change, and you know you hear everybody grumbling and grousing about and I says look, every one of you made a choice to come to work today. You got up, you got ready, you walked in the door. So you need to give this day 100% of your effort, because you may make a different choice tomorrow, but this is the choice you made today and every day you make a choice. So that's how we came up with the name, which is Eddie Mack, which is the first letter out of every day you make a choice love that.
Speaker 1:I think it's it's words to live by and I think lots of people can agree that that is a a positive outlook on on things. But going back to fulcrum and your time there for the I'm sure most people are very aware of the proposition behind Fulcrum. Do you just want to give everyone a brief explainer about? You know the technology, what facilities they were looking at and you know the company sort of timeline as well.
Speaker 2:Sure, sure. So you know, the premise of Fulcrum itself was take municipal solid waste and turn that into jet fuel, primarily using a gasification technology. So you know, taking taking a page out of how do I speak to the investors when we would have a pitch, you know what does that really mean it's like? Well, first of all, when, when I say municipal solid waste, go look in your carpet, your your garbage bin in the kitchen. What's in there is what is being processed by fulcrum and primarily you're taking out carbon-type materials. You're not interested in the food waste as much as you're interested in the scrap paper and packaging materials that everyone has in their household.
Speaker 2:And when you think about, when you think about, you know what do you do with it from there. You know, with it being paper, you know what is paper? Paper is basically a very complex carbohydrate. Think of it as a very complex sugar that has carbon, oxygen and hydrogen. Well, what if you could break that down into the different molecules, primarily carbon and oxygen? Is carbon monoxide and hydrogen. Well, once you break it down to that level, as someone with chemistry backgrounds, you can rebuild that molecule in many different forms.
Speaker 2:You could turn that into a methanol, you could turn that into jet fuel, you could turn that into lots of other valuable streams. But you have to break it down into those, those basic molecules. Gasification is how you achieve that. You break it down using the gasification process and then you get to rebuild it in whatever way that you you want to to create the value and I know the the flagship project that Fulcrum had was in Nevada.
Speaker 1:It was in the Reno Nevada area. That's correct.
Speaker 2:The home office was in California and they partially and the permitting processes of especially a chemically oriented type of a business, being able to go through that red tape much faster than you could in a California environment around a year on from fulcrum, sort of pausing operations, and then it's sadly the end of last year, filed towards the end of last year, filed for chapter 11 bankruptcy.
Speaker 1:So I suppose this is quite a large question. But what can you break down sort of the key issues that fulcrum?
Speaker 2:key issues that Fulcrum ran into along the way that sort of led to ending up at that point. Well, like many startups, you have a very long valley of death that you have to make it through, where your funding is very thin but your spending is also very high towards the end of a project. For Fulcrum there were several challenges. One challenge that was before we ever started up the facility was just working through COVID. How do you work through a pandemic environment when you're in a construction site and try to continue making progress around that? So that was one challenge in and of itself, of itself.
Speaker 2:Secondary to that, you know, as a first of a kind especially, you're going to encounter many things that you never could have anticipated and those always take more time to resolve and to work through.
Speaker 2:You know we knew early on in Fulcrum's time that the feed system itself was going to be a challenge and we started actually working through issues on the feed system early on and as soon as we could have some of that system installed, we were beginning the operation of that with the technology supplier that brought that to the table and we were gosh, you know, almost two years into construction and we were starting the feed system and had constructed a complete recycled boot so that we could find the issues, work through it, test it, resolve it, keep moving things forward.
Speaker 2:It's just that takes a tremendous amount of time while you're doing that and in the middle of COVID to go with that.
Speaker 2:Secondary to that, you know, the other challenge that really came into Fulcrum and the operating window that we were in was that was the first time that many of the technology kit had been assembled as a full piece, as opposed to what was tested in a pilot plant, what people had more experience with from other installations. So the full-on integration itself, you know, created another nuance in terms of how do you try to work through this rapidly during a heavy spending period and get to the point where you can run and you can operate. So, you know, ultimately it was the integration issues and working through those that just exhausted all of the money that was in the bank, as well as just the investor patience, you know, because that takes a lot of time and they're wanting to see progress, especially late investors that are looking towards something more immediate as opposed to early investors, who know that it's a very long road before they're going to get to see some success.
Speaker 1:On the integration piece, do you think there's that sort of symptomatic of a wider industry sort of proclivity to test at pilot scale individual aspects of the full refining process and then just implement them at a larger scale and not necessarily gradually scale up, build up the how each piece is going to be working together? Is that, is that something that you think is sort of pushed on by, as you, the later investors, to speed up production? Do you think there's sort of a tension there between scaling the technology and the investor patients?
Speaker 2:I truly do. I truly do Because you know, I think you know, having had the opportunity to work with multiple startups in my consulting role here you know, time and time and time again, I see these early stage companies just not do the basic fundamentals that you would need to do to both prove out your process aspects, which you know really are the we start with the highest risk kit in the entire equipment kit in the entire equipment learn it, test it out, improve it, get it to the performance levels that we're looking for and then continue to expand on with more and more of what's going to be deployed in the field. Ultimately, they tend to look at it in a bit more isolated state. They don't connect as many of the components together, which you know that's where you find the problems, because you don't understand how the different pieces interact with each other until you actually connect them together and and I've seen that on numerous occasions where you know the developers, the owners are, are just not spending the time to do that and in the end you know they're having to work through their problems at the very tail end of the entire project.
Speaker 2:Now then you've got you know a full staff that you're paying heavily. You've got materials that you're bringing in at a premium cost. You're trying to do everything as fast as you can, so you're also paying premium for faster turnarounds, getting things there expedited, basis all of those. And again, you know your investors are sitting over on the sideline at that point as well, going well, when's this going to happen? You know, you told me it was very close to success, and here we are. We're not not at the finish line yet. So it creates a lot of tension at the investor level, but it also is is something where you're not doing the foundational work early on, and that's that's where I think, culturally, we have to break out of that, that mentality it's a tough sort of problem to solve, though, because the backdrop of this sustainable aviation fuel scale-up is that there's a timeline, there are targets being set we're trying to do a lot by 2050, and then, you're looking at sort of 2030 targets as well.
Speaker 1:So in the background there's this sort of urgency 2030 targets as well. So in the background there's this sort of urgency which doesn't necessarily map onto the progress that technology can have and then also doesn't map onto the investor thing, so it's not necessarily an easy thing to fix. Is it sort of going at this early? Stage getting everything sorted and then arranging sort of investment when you need it it's. It's really challenging for all startups and all technologies no, no, it is, it's, it's.
Speaker 2:You know, as you say, you know it creates a tremendous amount of tension between all the parties that are working through this. But I think you have to understand technology development doesn't have a necessary deadline in terms of a meeting, a policy need or you know you, you may be driving towards that, but you also have to create a technology roadmap that you know has a level of achievement to it. Now you know you can't, you can't be too slow with it. You have to drive, you have to push, because if you're too slow with it, then no investor is going to come up and fund you because they're going to say well, this is, this is a science project, this is a hobby.
Speaker 2:You know I, I can't get a return off of a hobby. I need something that is going to seriously move towards an objective. But you have to create that objective and then you have to have good, clear conversations with your stakeholder base and make sure that they're understanding where things are. You know from both the wins and the successes of achieving different milestones, as well as what are the setbacks that you're having. Where are the issues that you're trying to work through. But you know, deep down in my heart. I also say the best dollars spent will be spent in the early stage development aspects of whether it's testing and bringing that process into an operating condition or performing the early engineering work. Those are the cheapest dollars that you can invest in to be able to have the most significant outcomes.
Speaker 1:They might be the cheapest dollars, but it's also the time when you have the fewest dollars.
Speaker 2:Some of the hardest dollars. That is true.
Speaker 1:Some of the hardest dollars to get to. You mentioned the extended timelines and the strain that can put on relationships between investors, because a lot of investors have five, ten year contracts, investment periods when they need to see returns, and how do you manage delays and building them into existing timelines? What's the strategy to allow that to not necessarily fray relationships too much?
Speaker 2:Yeah, I mean and that's the challenge right, it's difficult to try to build that into a timeline automatically because you don't know where some of your stumbling blocks are going to be. You may be able to identify some, and then you develop mitigation plans, either because you're going to have additional testing periods during that time, or you're just going to say you know, we think we can do this in in one month, but because there's some uncertainty on how it's going to perform, we're going to add some extra time into the schedule around that. But those have to be very focused and individually based, um, and then you know. Then it comes back to you know the communication and making sure that you have created a level of trust with your investors. You've shown that you have credibility with them during good times and bad.
Speaker 2:And then the investor also has to understand somewhat that when they came to the table, they were creating a marriage between the development company and themselves, and so there's got to be a certain level of commitment back on their side for some level of support. Now, it can't be you're at the gambling table and you're losing, and so you go and you dig deeper into your pocket and lose more. You know there's got to be some threshold that you can go with. But I think you need to have some of that conversation early on when you're beginning to frame up conditions and term sheets and things along those lines, so that people can also understand okay, my boundary with this person is up to this level and then after that I either have to have a different, different person step in or you know that becomes.
Speaker 1:I have to achieve a level of success by that time frame this is where the sort of building of the, the capital, stacks quite important where you look at what partnerships you're building, as you say that, their marriages and sort of who you've got on board, the makeup of all the investors, because different investors obviously have different return expectations. There are going to be some more hands-on, more hands-off, so actually building that investor base and what those individual, those investors, are going to sort of bring to the table, also in terms of expertise, in terms of you know businesses, because you know they're not just providing money there's, there's more that they have an offer.
Speaker 2:But that's an important thing for developers to consider not just take all the money that's available to them, no matter who's giving it I've seen that go go very poorly as well, where the the cap table is so diluted with so many different folks that have come into the room that that's a serious challenge. But you're exactly right. Also, being strategic with who you're looking to partner with is very important. You know, fulcrum had the benefit of looking to BP as someone to be a partner with, and BP was an incredible partner, both in terms of what they could bring from a depth of experience around problems that they had seen within their refining industry. Now they're not going to come solve the problems, but they had a deep subject matter expert bench that we could tap into. For certain things.
Speaker 2:Sk provided some of the similar type of experience base for us, so those became very good partners, both financially as well as technically. But then as the developer, you also have to sit there and understand that you can't carry the weight on your own shoulders. You have to help or get help from those that can provide some level of help, which means now then you may have to talk about some embarrassing things that you didn't necessarily want others to know about, but they're also your investors. So you have to think of it as that marriage that at some point.
Speaker 1:You have to have some honest conversation with your spouse about how things didn't go the way you wanted and how do we move things forward sk and bp were probably two examples of investors you could explain the technology proposition and they'd understand it, whereas some other ones where you know they're not necessarily so interested in the, the technology aspect, so much. They're more interested in the market potential and the makeup of the, the team that's sort of in the, the startup, or in fulcrum in this example. So sort of marrying the, the amount you can explain technology and the understanding investors want or need is kind of important as well, because obviously you're not going to be able to explain the full detail to every single investor because they just won't be interested necessarily no, that's exactly right, because they're more business oriented.
Speaker 2:They're going to spend their time and do diligence on. Do we trust the team that's doing the work? Do we feel like they have the competency to be able to execute it? And what does the business model look like? What's the financial model look like? Let's put it through our own internal sensitivities and Monte Carlo simulations to say, well, they're telling us X. Well, how much slippage do we think we can afford to have? And it still be a reasonable investment on our part. So that's their technical expertise. But then they look quite a bit into those business models and that's still very important too.
Speaker 1:How significant you mentioned earlier that you're building out a lot of Fulcrum. During COVID and over that sort of two-year period where everything was unknown, things became a lot harder and also lots of things became a lot more expensive. Particularly in the aftermath of covid, there was lots of um inflation and just the cost that capital had went up dramatically is. That was sort of was it more the, the availability of people managing teams over COVID and after COVID or just the effect that COVID had on the financials? That were really challenging.
Speaker 2:It delayed us quite a bit in many cases because it was not just the cost aspect of things being higher priced, it was also delivery availability. There were many things that we were looking for that normally would be either short delivery times or even sitting on a warehouse shelf ready to ship out that now were almost make to order order because the factories either didn't have the staff or they had not recovered on their inventories from having everybody idle for a period of time. So the timing was probably the long time between a request to an order field to being able to implement it in the field was probably the most impactful around. That. Just because you're again, you've already got, you know, most of your staff in place, so your cash burn rate is extremely high and you're not actually producing anything. So you know it's very sad to watch your financials go in that direction and you can't influence getting the material there any faster.
Speaker 1:I think that's probably the must have been. One of the hardest aspects of it was the fact that it was predominantly out of your control. It's not you know tweaking technology, or you know getting more investment or something that you know you could actively control. It's not you know tweaking technology, or you know getting more investment, or something that you know you could actively control. It was the supply chain issues that were outside of your reach that were fundamentally proving the most challenging thing to deal with.
Speaker 2:During COVID absolutely and somewhat post-COVID, and somewhat post-COVID you mentioned.
Speaker 1:We spoke about the sort of pilot projects and then finding issues on scale up further down the line. How do you balance the? You know this is the technological proposition, this is the technology we're going to use and balance that versus flexibility and adapting what you need to do in order to to make it sort of commercially viable, because oftentimes what works in the small scale doesn't necessarily scale up so well. There are lots of tweaks need to be made. Is there sort of investor understanding at the amount of sort of flexibility that's needed along the way and that it is an element of you know we need to just add this and trial that and test this more than just plug and play.
Speaker 2:Um, you know, build it small scale and add it up no, I I think that is an area that most financial investors really don't have a good sense of, so that's not an area that they wrap their heads around that very easily, because without them understanding some of the science behind it and some of the mechanics underneath it, it's harder for them to rationalize. Well, why is this taking so much longer? Well, didn't this work over here in the field? And really, you've got two things that are at play here, and one is that I spoke about is the integration of the different bits in a pilot plant. About was the integration of the different bits in a pilot plant, but the secondary aspect of that is what's in the pilot plant doesn't always look exactly like what gets deployed in the field, and I don't mean from the perspective of it's just a smaller version of it.
Speaker 2:You may be utilizing completely different equipment in the pilot scale than what gets deployed in the field. So when you think of it from that perspective, that's a whole new risk that you're introducing into the startup because you've got a completely different piece of equipment that you truly haven't test driven to see how is it going to perform in this service.
Speaker 2:So we fulcrum saw a little bit of that. I've seen that with other startups as well, where what gets done at the laboratory level is something that's much more convenient, readily available. Oh, we have this, you know, right here on the shelf. We'll utilize it as opposed to well, what does that look like, just on a smaller scale?
Speaker 2:then you know the more you can put into a pilot plant that will look and run exactly like what you deploy into the field, the higher success rate is going to be. And then then you really are only dealing with. Well, we didn't understand the scale up around this much, this being this much bigger, where perhaps you don't get mixing in the way that you're looking for or perhaps you get too much mixing. You know the more fundamental mechanics that are underneath, inside the engineering aspects. So the more you can mimic at the pilot scale, the higher your chances of success the higher your chances of success.
Speaker 1:Fulcrum had announced two other facilities that they were going to develop, Another one in the US, I think in Indiana.
Speaker 2:In the Gary Indiana area and then also One in the UK, the one in the UK.
Speaker 2:So the North Point was in the UK, the Center Point was in Indiana. The Center Point project had progressed up to a certain level but you know, the focus of the company was really getting the plant in Nevada up and running so that we had some momentum to be able to bring others in to invest in that particular project. Plus, you know, all of the internal technical expertise was really focused on what's going on in Sierra, so there was not much extra work that was done in the Gary Indiana site. With regard to the UK project that, however, you know we had a UK team that was already over there working somewhat independently of the US counterparts. They were able to secure funding through the UK government for seeking new pathways to SAF, and so that's what really enabled that project to get moving, go through the early stage development, go through the FEL3 development work and to be able to bring on the extra resources that were separate from the US resources that could bring that project to a point where they were ready to start talking about FID.
Speaker 1:Was that the strategy then behind announcing extra projects before the Nevada projects online, because you're not the only sort of company to do this? I know LancerJet announced they had other projects before freedom pines was operational. So is it purely just a momentum thing? As you see one come online, you can build quick momentum off the back of that, as opposed to waiting until it's fully operational and then starting on it on a new project yeah, it's about, you know, trying to have some momentum and being able to have good PR.
Speaker 2:You want people to continue looking at what you're doing in a positive way.
Speaker 2:Many of the early stage project development doesn't take a tremendous amount of people, resources or cash resources. It's more about you looking for what's the right partnerships that you need to have for feedstocks and off takes and where's a good place to locate and and those can be very time consuming but low resource load type activities so you're able to get a lot of that framework built out early. But you know it's also a way for you to get your name in in the out there, so to speak, and keep drawing some attention to you as a company of future growth opportunities fulcrum in terms of other people looking at developing projects, trying to get to fid, looking at commercializing and then getting to that, pretty much to that commercialization point and then running into problems.
Speaker 1:What do you think people should take away as big lessons that they should look to well?
Speaker 2:I mean, I think, the big lessons that you know, I keep telling everybody. You know it really comes back to some of this you've already heard. You know you need to pilot as much as you can as a fully integrated type of a system. You need to pilot what you intend to deploy, even though it's at a smaller scale, as much as you possibly can. It's at a smaller scale, as much as you possibly can. Third, behind that is, do your engineering. I think about this as if it was a military exercise. Your engineering is your intelligence gathering. It's where you're understanding what you're trying to accomplish. Where are your risks? At that are out there, whether they're financial, whether they're equipment risk, whether they're operational risk. You're identifying all those risks so that you're able to then either mitigate them to.
Speaker 2:you know, just have the awareness about them so that you're not surprised when they occur. But you know you have to do that intelligence and I see in many other young startups that they want to rush through the engineering phases and that's where you're really getting your plans solidified and ultimately, you know how much is that going to cost type companies shifting their business models around where you no longer are going to go to somebody with a large infrastructure project and say I want to lump sum with a wrap. You're not going to get that anymore. So how do you try to make sure that you understand your cost going in up front and then can balance that with what's the cost to construct risks that you're going to have to encounter and work over with with your construction partners?
Speaker 1:I'm not sure james bond would be as such a successful film franchise if he was an engineer, though he probably wouldn't the engineers usually don't get the girl either.
Speaker 2:The engineers usually don't get the girl either.
Speaker 1:On the chasing capital idea, the idea that you're just basically developing until you get to a point where you can get more investment, rather than instilling those fundamentals do you think that's something that's changing? Do you think people are actually understanding the importance of strong technological foundations on which to build on, because presumably the investment comes a lot quicker later if you've got these strong fundamentals, rather than chasing a lot at the early sort of seed, early venture rounds, and then struggling through this long valley of death later on?
Speaker 2:I think you know you're people a bit of a pause for is this a space that I want to invest in? Is the risk level where I want it to be versus my investment money? But you still have some very strong-oriented funds that are out there that are still trying to push things forward, not just because they want to make money, because they have to make money.
Speaker 2:We all have to have to make money, but also because they're trying to push forward in areas that they see a significant social impact that the world will benefit from, not just themselves as an investor.
Speaker 2:So you know that population, I think, is getting a little smaller than it used to be here lately.
Speaker 2:But you know the other aspect of it really comes into. You know the policy that's in place between the different governmental agencies. You know we're seeing gigantic shifts in the US in terms of policy impacts and policy pullbacks and you know I think you're going to see significantly less development in the US here in the near term for that reason because there's not the economic drivers that are being created through the policy in the UK and the EU and other areas that are, you know, pushing both the mandates, but also, you know, having policy structures that are supportive of development to get through some of that. You know low-cost engineering work that can also be the most elusive from an investor's perspective. So I think you're going to see the UK and the EU swing up, which means the investors that tend to be focused on projects in those regions are also going to be the ones that are being looked to to be able to try to carry from an FID all the way through full development.
Speaker 1:Is that the biggest challenge? Then, if you're from a US perspective, the policy support across the development cycle, right from sort of early stage through right the way to project finance and the uncertainty in that Is that the biggest challenge you see for?
Speaker 2:absolutely, absolutely. And in fact you know the previous policy elements that you know haven't completely gone away. You know they're in the form of tax credits, so it's not early funding, it's not helping you get to your starting line, so to speak. It you know backloaded types of economic incentives. So if you can't ever make it across the finish line, then you know there's no governmental risk in terms of budget impact. So that's, I think that has to fundamentally change. There's got to be some combination that you can work with in there. But early development funding, I think, is tremendous and that's where a lot of the research is being pulled back in the US across the board, not just SAF or clean tech type of industries. It's universal right now, and we can't do that because if we're not moving forward it's like we're moving backwards but there are department of energy grants, there's the faa fast grants as well.
Speaker 1:So there are sort of grants available that people are taking and is sort of filling the earlier stage gap, whilst people are in development, before they can take the tax credits.
Speaker 2:A little bit a little bit. But then a lot of the DOE grants and loan programs are still they kind of hit the pause button while they sort through what's in favor and what's not in favor. So they haven't necessarily sunset some of these programs but they're not necessarily progressing them right now either.
Speaker 1:Sure, sure and sort of in sort of summation fulcrum had you know the challenges and last year unfortunately went out of business, we'll probably see a lot more developers go out of business and sort of you know, not reach the critical stage and then run out of money before they actually get to commercial production. Do you think there's a you know, do you think we're going to get to a point where we're going to see a lot more soon or do you think it's sort of gonna keep being sort of individualized, big headline making incidents of sort of big projects and what? Do you think that'll have sort of an ongoing effect if we start to see more of these projects that were being developed, paused or shut down in sort of the next sort of five, five years as we're trying to develop?
Speaker 2:yeah, I, I think you know there's. There's a couple of projects that are, you know, working right now that are moving. You know they've. They've had to hit some pause for various reasons, but I think we've got several that have real, real promise out there in terms of being able to achieve their objectives. Um, but you know it's.
Speaker 2:I also say, you know the startup world is there's a lot of infant mortality in there. You know, not everyone's going to make it and so you know there's a lot of reasons why they don't make it. You know the technology can be an impediment. The length of time it takes can be an impediment. Sometimes you can lose, you know, key individuals within an organization and then that becomes its own challenge. So you know, I don't personally think that we've got you know impending doom of multiple other projects that are going to come crashing down, you know. But I think you're going to see and to me I think it's somewhat smart I think you see, some folks that are a little less ambitious than what fulcrum was.
Speaker 2:Fulcrum's ambition was to take a feedstock that was relatively free to be able to gather and turn that into into sap. Uh good, good thought process, because now then you've, you've essentially insulated yourself away from feedstock pricing risk and then you just have to worry about the downstream side of what the pricing risk is. But doing SAF is a huge infrastructure project. There's so many bits and pieces that have to come along to get to that final endpoint. There's so many bits and pieces that have to come along to get to that final end point. The plant in Nevada was going to do coprocessing with a refinery. That's a huge plus right there, because now that you're able to de-risk and unload some of that capex, but even one in particular more focus now is towards ag waste, wood waste, especially in the US.
Speaker 2:There's a tremendous amount of woody biomass that's readily available that's not being used because of the shifts in the pulp and paper industry and there's so much less that's being consumed in that pathway. But you still have to be able to take that out of the pine plantations and be able to use that. So that's a great feedstock opportunity. Very uniform, very straightforward. You've got SunGas doing a project to develop that into methanol Less ambitious than Follier to SAF.
Speaker 1:It really all comes down to.
Speaker 2:you know, can you demonstrate a gas fire process that is stable and operates? Once that's been demonstrated, then you know that's going to be the market leader.
Speaker 2:Now, different gas fires thrive in different environments, so there's a little bit of a pick between which ones you need to deploy and which ones you don't, in different applications. But those are going to be some areas where you know, get one gasifier up. That's really, I think, the big focus. Get one gasifier up, that's going to start creating the momentum and allow us to unlock the tremendous level of energy that's stored in all of these different waste streams.
Speaker 1:I know I said in summation indicating that was my final question, but I've just thought of another one, so I'm going to ask you another one.
Speaker 1:Do you see in America, compared to Europe, there's projects that are of a much larger scale than the ones that are trying to be developed over here. Do you think there's going to be a trend down to sort of more smaller modular size facilities going ahead? Just because you know the capex is so much lower, you can scale them a bit faster rather than you know going for these huge projects. And then you've got the issues of the integration. But you can mitigate that slightly by going for a slightly smaller scale project, maybe doing multiple. Do you think that's something?
Speaker 2:I think that's really the direction that that we need to go in the us and and you can still even look at it from the perspective of, you know, as you said, modularization modular, you know, to a lot of engineers and constructors. You know you think about building things in little blocks, off-site, so that it's a very controlled environment, but you're also thinking about you know how do I?
Speaker 2:modularize a component of the facility so that once I get that first piece up and running maybe it's too small to be completely economically viable, but if it's operating now, then can I begin to start adding additional pieces of kit that look exactly like what got deployed the first time, to start getting myself to a level of scale that does become economically viable. So then, my initial investment that I'm over investing in is probably the land more than anything else, and then the rest of it is incremental investment based on achieving performance milestones.
Speaker 1:So we just need more Lego style SAF kits Exactly, jim. Thanks so much. That was a fascinating conversation and so many takeaways from what was a sad story but hopefully can help so many others commercially produce and have a really positive impact on accelerating SAF production thank you, oscar.
Speaker 2:I appreciate it. It's been wonderful being here. No absolute pleasure.