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: AIRCO - The art of revenue generation during development
This week on The SAF Podcast we are joined by Greg Constantine, Co-Founder & CEO, AIRCO (Formerly Air Company).
Originally from Australia, Greg explains the strategy behind building out technology development from revenue generating consumer products like carbon negative Vodka, hand sanitizer and perfume building towards production of Sustainable Aviation Fuel. This allows for ongoing revenue generation and less reliance on raising outside investment.
Constantine explains their technology-licensing business model, contrasting it with the capital-intensive mega-project approaches favored by many competitors in the power-to-liquid (PTL) space. This strategy allows them to avoid massive FID funding rounds while still scaling sustainable aviation fuel production globally.
Their strong partnerships with the US military have provided rigorous testing opportunities across air, land, and marine vehicles, validating their technology beyond what's possible in purely commercial settings. After closing a $70 million Series B funding round with strategic investors including JetBlue, Alaska Airlines, and Toyota Ventures, AIRCO is positioning itself as a technology provider rather than a large-scale fuel producer—focusing on licensing their technology to established operators who can scale production globally.
Constantine also discusses the challenges of balancing emissions reduction with cost competitiveness in the eSAF market, where fuels can cost seven times more than conventional jet fuel. The conversation then moves to feedstock flexibility, policy implications for e-fuels development and which policy structures he finds most practical.
Check out the full conversation to find out more.
Want to learn more about sustainable aviation fuel investment opportunities? Join us at the SAF Investor New York conference on September 23rd during New York Climate Week. Find out more information here: https://www.safinvestor.com/event/148108/saf-investor-new-york-2025-new/
Before we get into this episode of the SAF podcast, I just wanted to let everyone know that SAF Investor is going to be running our first ever SAF Investor New York conference on the 23rd of September as part of New York Climate Week. The conference is very much like the podcast, except there will be more people, more panel discussions, more networking opportunities and it will be very much face-to-face. So if you are thinking about attending New York Climate Week or would like to meet some of the people we have speaking on the podcast and network with people really driving change and accelerating investment in sustainable aviation fuel production, do join us in New York on the 23rd of September. You'll be able to find a link in this podcast description where you can register, book tickets and hope to see as many of you there as possible, but for now, do enjoy this episode with Greg Constantine from Airco. Hello and welcome to another episode of the SAF podcast.
Speaker 1:This week I'm delighted to be joined by Greg Const constantine, who is from airco or some people might know them previously as air company. Um, we're going to go into greg's background. What airco is all about. I'm sure many people are familiar with some of the other products they've produced other than saf, most notably the vodka, the perfume and hand sanitizer. So we're going to get into to that as well, as well as Funding rounds, how funding funding has been going, and then thoughts about developing in the US as well. But before we get into all of that, greg, thanks so much for joining us. How are you? Very well, mate. Thanks for having me. I appreciate it Absolute pleasure. So before we get into Aircode, do you just want to give everyone a sense of your background and what you were involved in before getting into this space specifically, yeah, absolutely so, from Australia, originally moved to the States gosh over 10 years now over 10 years ago now and have been in the US that entire time.
Speaker 2:You know we started the business in late 2017, early 18, and prior to that really just was, you know, was a student, finished my degrees, moved to the US.
Speaker 2:You know, took a student, finished my degrees, moved to the US.
Speaker 2:You know, took a corporate job for a couple of years and ended up starting ended up starting Airco, you know, with the belief that you know that carbon dioxide levels are the highest they've been that have been in the history of our planet and that the future of technology was moving at a rapid rate and that jumping into a world where taking carbon dioxide and potentially turning it into products that could be useful for our future was something that we wanted to spend our time working on.
Speaker 2:And so we embarked on a journey to commercialize a number of CO2 to technologies and have been on that pathway since and yeah, you kind of alluded to some of maybe the early products that we had created off the back of our CO2 to ethanol technology, which we can definitely talk about the goal and mission of the company has really been centered around taking carbon dioxide and trying to create useful products for our future, and we're we're big believers in technology and we're big believers in the future so you're not necessarily a purely SAF aviation company, you're sort of a decarbonization company, and wherever the technology you've got can be applied, you're sort of a decarbonization company, and wherever the technology you've got can be applied, you're willing to be flexible and nimble to create those other products.
Speaker 1:Is that sort of the ongoing strategy or was it sort of a stepping stone that you sort of went through on the journey you're on?
Speaker 2:So very much a technology company. You know, the early stage of our business was very much a technology company. The early stage of our business was very much focused on a strategic direction where we wanted to create products that we knew were going to be really high cost. And so when we thought about all of the companies that had tried to get towards these large fuel markets or these large industrial markets in the past, the majority of them had failed, and a lot of the reasons why they failed was that the cost of the end product was far too expensive. The cost to produce the product was far too expensive, and most of these businesses ran out of money because it is quite capital intensive getting your pilots off the ground, your demonstration plants off the ground and, hopefully, your first commercial plants off the ground. So we took those learnings from those businesses and said, okay, if we know that it's going to be really costly to produce these products and the volumes that we're going to be producing in the early days are really low, what industries can we go into in order to generate revenue for our business? And so, yeah, that's where you see things like ethanol coming into those consumer-based products.
Speaker 2:When we looked at a chart of getting towards these really large industrial fuel markets where the volumes required is so massive and the price on a per gallon or per litre basis is so low. It's going to take a long time to get there, it's going to take a lot of work to get there. So let's flip that on its head and let's actually focus on the areas where the price per litre is really high and the volume or the output of the product is relatively low, and so very much a stepping stone in terms of technical development, revenue generation as well. And it's actually it's afforded us the ability to be where we are today. We've commercialised multiple technologies, generated revenue for our business along the way, and we're at these, you know, larger tan industrial markets like aviation fuel, much sooner than we anticipated.
Speaker 1:Because of it in it from the decarbonization aspect or from the? You know, this is a slightly new way of making vodka, perfume, hand sanitizer. Just from the novelty side of things. Where do you think the levels of interest were and where did they come from?
Speaker 2:There was a few buckets of interest. I would say One from just like a pure innovation. When you think about, you know, the beverage industry or the fragrance industry, sanitizer as an example, those industries have literally not been innovated in since their inception, and so there was a level of curiosity from innovation. There was definitely a level of curiosity from the angle of the carbon impact, for sure, and then at the end of the day, the product ended up speaking for itself. We were creating a very, very pure end product essentially, and so when you're selling into a market like the beverage market, taste profile is everything. So it had kind of a triple effect in some respect, and the fact that it was, you know, design orientated, look good, really drew people in. So, um, yeah, I would say the you know, the innovative aspect to it really garnered a lot of folks's curiosity what was the abv of the vodka?
Speaker 1:do you know that? Do you know that off the top of your?
Speaker 2:head. Yeah, yeah it was. It was 40 abv, so it was it was strong stuff. Yeah, definitely strong stuff. Not as strong as jet fuel, but it might have a similar effect.
Speaker 1:And how did developing those products help with attracting investment and engaging with investors? Because obviously you've mentioned how capital intensive going into you know the fuel side of things are Were they sort of interested and sort of understood where you were coming from in terms of the revenue and think, thought it was a great idea?
Speaker 2:because obviously there's lots of people, companies out there just pursuing the end goal of the fuel and not doing the sort of the stepping stones with other projects that that you guys have done definitely a different subset of investors, absolutely, um, you know you're you're seeking out a yeah, just like a different investor profile, and so, you know, as with any fundraising endeavor, you try to leave no stone unturned in that respect, and fortunately, today we have such a strategic group of investors across the board because of the multiple technologies or products that we have produced.
Speaker 2:Don't get me wrong. There's definitely a group of strategic partners investors or what have you that may prefer a business like ours to just be focused on a singular goal, that goal just being either SAF or what have you. But from a business perspective, we really believed in generating early stage revenue for our business to help support the growth of the R&D and creating awareness through those consumer-based products, because no one had ever done it before. You know, the landscape when we started this business, you know, seven or eight years ago now, was very, very different to what it was today, and so education was was really critical as well, and having the ability to produce real products that you could, you know, literally put in front of people that they could wear or drink, really aided in?
Speaker 1:that Is this are you talking about awareness in terms of the capability of the technology, or sort of getting people involved in sort of looking at you know further down the line, pretend looking at sort of SAF and other decarbonization products that you sort of have got going on later?
Speaker 2:both capability of technology, the ability you know, the belief that the technology is real and that it exists, that you can take carbon dioxide and turn it into a chemical or fuel or product at the end, that the technology is real and that it exists, that you can take carbon dioxide and turn it into a chemical or fuel or product at the end of the day. So both and that's what we mean by awareness it's really just showing people proof, you know, and if you think about today, saf as an example, proof is in the pudding, literally Like if you have gone out and you know produced volumes, produced liquid, put them in vehicles. That is the same proof of producing a product and putting it in a you know, in, you know getting it to its customers as as what is a, a consumer-based product as well. So that when you're, when you're working on newer early stage technologies, those proof points and results are really really, really important.
Speaker 1:Aren't they proving things to slightly different demographics, though, in terms of the products you make and proving it to the end consumer, the people that might, you know, go on an airline app and potentially opt to buy SAF? That people are starting to see, whereas producing those small amounts of fuels are more sort of industry people, so that's not necessarily the same proof in terms of the demographics you're proving to.
Speaker 2:Demographics can definitely change, but the ability to actually showcase the stepping stones in which you need to do to get to those large scales, it needs to be there right. Like you know, there are a ton of companies not just in our industry, in any kind of hard tech industry that can say that they can do a lot of things, but unless you really show that you can do those things, there's a massive, massive difference, and so we've really taken a belief that making those steps along the way, proving things out along the way way, and proving that with real product is really important.
Speaker 1:How much sort of time and energy is spent devoted to these other products versus SAF and sort of the longer term goals. How are you balancing working on those in terms of short-term revenue and the long-term strategy of the company?
Speaker 2:Yeah, so our consumer business was the early stages of our business. We've got long-standing partners that we work with now in that business and almost all of the time resource of the business has been for a number of years now and will continue to be, has been focused on fuel technology and we think about our fuel technology in both the public and the private sector. So you know, you know working with commercial airlines and then going out and working with government and defense, which is the, you know, the largest customer base for our fuel and for our technology today.
Speaker 1:so that's the core of what the, the company, works on, is these industrial fuel technologies and what is the the differentiator in your technology versus you know, others in the market, because there are so many companies sort of in the early stage trying to develop e-fuels and e-saf. What is the technology differentiator for you guys?
Speaker 2:yeah. So I'll talk first of, just like the, you know, the fuel for the commercial applications non-defense and the reason why I'll talk about that first is for a lot of the defense related stuff. We have announcements that are going to be coming out and some of it is also confidential as well. From a pure fuel perspective, you know the SAF product that we produce is obviously made directly from carbon dioxide. So when you think about, you know, SAF, you know there are a number of different feedstocks that can be the appropriate feedstock for SAF. We obviously feed in the e-fuels or PTL bucket within there as well.
Speaker 2:So you know we have the highest GHG emissions reduction of any of the fuels on the market. We also have the ability to produce in a single step a fully formulated fuel, and so what that means is that the fuel can be completely dropped into an engine, so there's no blending required for that fuel. So it produces all the components of the fuel. You know we're taking a phased approach to that, by producing the paraffinic fuel first, selling that into market and then, you know, as you work through the regulatory approvals to get to the fully formulated fuel, we'll also be selling that. You know we've tested those fuels in a number of vehicles through the programs that we work with the US military a number of marine vehicles, land vehicles, air vehicles as well Again, proof points of technology, proof points that the fuel can be produced in situations that can be put into a number of vehicles as well.
Speaker 1:So, yeah, I would say that they're kind of some of the key differentiators that separate us from the e-fuel sector, but then obviously from the broader south and obviously fossil-based fuel sector as well you mentioned the, the slight differentiation with your defense sort of contracts and partnerships, and I mean it's sort of it's out in the public that you've received defense funding and how sort of closely related you are with them. Is that important because you know, the use requirements are slightly sort of there's a lower barrier to entry in terms of the testing and you can sort of get a bit more testing and the military is willing to sort of be a bit more sort of flexible in terms of what fuel they can use and and is that sort of a big motivator on that side, sort of, as you said, develop the proof in sort of an area that's slightly different than the, the commercial sector?
Speaker 2:there is.
Speaker 2:There is flexibility, but the testing is actually more strict, and so you go through a trickier and tougher testing protocol than you normally would.
Speaker 2:So it's a great validator that your fuel can meet the standards and specs that are required for other commercial aviation or non-aviation sectors. One of the really amazing things about working with not just defence but government groups in general is that you know they're really focused on innovation. They're really focused on allowing you to innovate, and so you know the earlier contracts that we received with groups like the Defence Innovation Unit are really focused on other types of parameters, not just cost, and so what that allows you to do is really focus on other areas of fuel properties. You know cost as well, but also the way in which you can produce the fuel, and if you think about you know defence as a vector for technology in general. A majority, if not a lot, of all the technologies or harder technologies that exist today all started with government applications first, and so it's really a great kind of test bed, I would say, for developing and spurring new technologies and innovations that end up translating to real-world commercial applications. So it's been a lot of work, but it's been.
Speaker 1:it's been a lot of work, but it's been an incredible part of our business and it's growing quite rapidly as well and is, and presumably that goes across the, the air lad, the diff, the road, the, the different applications that your your fuel can be used for, and on that, how are you sort of balancing? You know what is your in terms of process, in terms of how you differentiate the fuel? Are they purely identical and a drop-in in all of them? Do you have to adjust and tweak um sort of the different levels of aromatics and things like that in the fuel for the different um applications? And how easy is that sort of jump between those, those different use cases?
Speaker 2:all the above, yeah, so really just dependent on the end customer within those sectors and what they're looking to to fuel. So there are definitely niches, uh, kind of within that as well. Right, you know, you know some folks are really focused on, you know, very niche cuts of fuel.
Speaker 2:Others are focused on a more broader cut of fuel like a, like a diesel based fuel as well. Um, obviously there are things not just in land and sea, but drones as well. You know, jets are a part of it, so it's it's variable, dependent on the customer within there and and fortunately we've been able to to produce, you know, a variety of cuts for them as well, that that work in a number of different situations and sort of moving into the sort of commercial aspect what, what's your estimated timeline for astm approval and that sort of certification and the ongoing sort of development of productions, eventual commercial production levels.
Speaker 2:Yeah, so our paraffinic fuel is ASTM approved. It's the same annex that a lot of our peers are in. But, in terms of the fully formulated fuel, that is what we're working actively with ASTM for and working through the process of going through the sampling and the rest, and working through the process of going through the sampling and the rest. We are going to be working closely with our defense partners for that as well, in order to get through the process and use some of the testing that we're going to be doing with them for that as well. But, yeah, it's definitely a process that you have to get through. Now what I would say is fortunately, because we've gone through a number of regulatory processes before here in the US. You know, certifying a vodka product, you know, through the TTV and the FDA, was absolutely no easy feat, and so we've got a bit of background in terms of, you know, regulatory process approvals.
Speaker 1:We've got an incredible team internally that's working on all those pieces as well and in because of the, the blending limits that are currently in place for SAF. Do you see, you know, getting certification for your fuel? Obviously there's there's no blending requirement, it's a purely 100% drop in. Do you think you can sort of get that certified before you see movement on the blending limits, or do you think you'd have to wait for blending limits to go up for existing SAF? Is that sort of a challenge that you're trying to sort of work with the you know the guys at ASTM sort of to get through?
Speaker 2:It's a stepping stone process, absolutely a stepping stone process. Yeah, and you know we're very focused on doing what's right, not only for the process but in terms of the actual fuel scale up and the rest. So, yeah, there's a process that's involved within there and we're taking a measured approach to it, similar to everything else in our business, which is really focused on taking steps to get towards that end goal first.
Speaker 1:so, yeah, I want to sort of look at your strategy for production facilities, because there's a bit of a. So there's two camps in the e-fuels or ptl space. There's the, there's the massive projects with, with huge capacities, and you know they've got. The rationale behind behind them is quite well known in terms of, you know, lowering costs and economies of scale and so much. But you're not looking at that, you're you're in the other camp. You're looking at the sort of the smaller scale, numerous smaller scale facilities rather than one big one. What was the sort of thinking behind that strategy? Why does that sort of work best for you guys and do you think there's it's sort of the lower risk play in terms of attracting investment and actually getting to commercial level productions?
Speaker 2:so we really think of ourselves as a technology business, I would would say through and through.
Speaker 2:And so you know, rather than thinking of ourselves as a large-scale owner and operator of these facilities long-term, there are folks out there that have been doing that for, you know, decades, and maybe even centuries at this point, that we want to leave that to.
Speaker 2:And you know our goal from the start was to see our technology applied in many verticals and as quickly as possible, and so by rapidly developing technology and working with partners on that front achieves those goals for us. And so, um, yeah, look, are we going to have to go out and continue to produce, you know, fuels in order to scale up our technology production? Sure, but in terms of, you know, the long term, we really view ourselves as a provider of technology and not necessarily long term. You know, being an owner and operator and a large producer of fuel owner and operator and a large producer of fuel and so that just comes down to. You know, everyone's business model is different. It comes down to capabilities and strength and, as you can see from having developed multiple technologies through this process, we will continue to do so and we will continue to develop more technologies that we are as well.
Speaker 1:So the licensing model is more the long term, once you've got the proof of concept of producing fuel at a large enough scale to satisfy potential customers and people that would actually want to license this technology and produce it globally For our SAF and jet fuel business.
Speaker 2:That's really how we're thinking about it for our, for our south and jet fuel business.
Speaker 1:That's really how we're thinking about it and and that has the benefit of you not having to raise massive fid funding for for projects. So, going on current strategy, you might you might slightly have dodged a bullet on on that one if you, if you don't have to go through huge fid funding yeah, look there's nothing.
Speaker 2:There's nothing wrong with going through, you know, huge amounts of funding and deploying these pieces of technology, if that's the strength and capability of those businesses. I think, unfortunately, you're seeing some of the challenges that are being faced by some of the companies that are trying to do so and hopefully they continue to actually succeed at that because it makes the industry even more successful. But yeah, our core competency and capability is really around technology development.
Speaker 1:You're right, there's no bad thing, but doesn't make it not very, very challenging. The challenges around getting financing for FID, the funding gap, the convincing investors of risk profiles of projects is a whole minefield. So if you don't have to do that and it's, you know it's not for everyone it's really challenging. Not everyone gets through it and you get stuck there for years. So if you can stay nimble and go a different route and get to the end production of fuels another way, there's absolutely no reason to do to do both. There's room for as much fuel as possible globally, absolutely, absolutely.
Speaker 1:I want to talk about your, your funding rounds. We touched on some funding you received from the um defense innovation, um fund and you. The last sort of big raise you did was september 2024. You did your series b, which had some very big, well-known strategic investors included in it and you haven't raised since. Is that? Are you looking at additional raises now? Is that something that you're you are sort of considering in the future or are you still sort of very happy with the fully leveraged in terms of the investors you've got on board and the funds you've got access to?
Speaker 2:We're not in market raising funds. Currently. The business is in really great shape. As you mentioned, we closed the $70 million Series B at the back end of last year and brought on some incredible partners. Now we are definitely opportunistic and as we get through this year and continue to hit all of the milestones that we've hit this year and plans to hit going into the end of the year, it's something that we will absolutely consider as well. What types of capital could benefit the business in speeding up our routes to commercialisation? And so if there are ways to get to those large commercial revenues sooner than anticipated, then we'll absolutely consider it as well. But in terms of currently, we're not currently in market raising funds would you consider, you know, equity debt, different, different sorts of funding?
Speaker 1:are you sort of an open book in terms of where you'd find the funding from? Are you very sort of fixed and strict in sort of the avenues that you're going to accept accept capital from?
Speaker 2:I I don't think that fixed and strict for a business like ours serves you, serves you well. I think that you have to absolutely be flexible, but it all comes down to the plan in which you're trying to execute right. So, for a lot of the folks that are going out and building projects, they're going out and raising a portion of equity and a portion of project level level capital as well, because that's what fits their business model and their needs. Similarly, for us, like you know, if there is a, you know if there's capital that is required in order to achieve a goal, we'll be very opportunistic at that, but also flexible as well. You know you can try to go out and you know be strict with what you want, but at the end of the day, you know cash is king and in order to be successful, there are decisions that you have to make to get there as well. So, yeah, I would say we're an open book, but it's really dependent on the strategy in which you're trying to execute for that capital.
Speaker 1:Sure, and in terms of some of the names we mentioned earlier, you mentioned earlier that you've got lots of strategic partners and investors. Some are sort of massive entities like toyota and jet blue and alaska and um, lower carbon capital I'm not going to read them all out because there were so many involved in your last round and the round before but what's the importance of for you guys in terms of that strategic presence in the business, as opposed to sort of the more sort of pure VC?
Speaker 2:VC players. That's actually a really great question and I think for any of the earlier stage or even later stage companies, being no pun intended strategic about the folks that you try to work with can really really help or hurt your business as well. And so in the early days of our business, when we were really focused on just trying to make technology work and focus on these consumer-based products, a lot of the investors that we brought in were really focused around that. Then, when you think about our Series A and then our Series B, there's been quite a progression in terms of the types of investors that we're looking for so that they can aid in the goals that we're trying to achieve.
Speaker 2:At that point in time, you know a lot of the strategies we brought on, as you mentioned, like the GEs of the world, the Toyotas of the world, some of the airlines as well, are really helpful in getting towards our commercialisation goals. And now, as we think about potentially or potential new rounds of funding in the future, it's really going to be focused on what are we trying to achieve with the capital, who are the right groups to be involved with? So, as you'll see, with some of these latter stage companies that are raising large project capital. They're really looking towards those financial institutions, those infrastructure funds as well, because they can help support not just the first projects but hopefully multiple projects thereafter as well. So long-winded way of saying we've tried to be very, very specific with the groups that we work with to try to aid in our business, and it's been really, really helpful in doing so.
Speaker 1:And particularly with the airlines. You've got you know they're providing a tool for you guys and helping you develop. But equally, you've got you know a partner that's also a potential customer that's going to buy the fuel. So that partnership in terms of what the customer wants, how you can understand the customer demands from your, your fuel, in terms of you know what, what airlines need, that's, you know, a trend that's sort of gone across a lot of, a lot of the SAF industry and it's a really important, it's almost a symbiotic relationship between the two, because you can't, you know, have one without the other.
Speaker 2:Yeah, yeah, yeah, you know, look those, you know those folks in the aviation industry are looking to achieve their own goals within their own businesses as well, right, whether strategics or funders, and that comes in the form of offtake agreements so they can then go out and actually, you know, use the fuel that they're procuring from you as well.
Speaker 2:So it's a very symbiotic relationship in that respect. You know they understand, in order to achieve their goals, more companies like us need to be successful. Those companies need capital and in return for that capital, they're going to hopefully achieve their goals of, you know, trying to meet their, you know the demands on what they need to from a fuel perspective. So, absolutely, you know we've got, as you mentioned, groups like JetBlue and others, but also AvFuel, who are one of the larger jet fuel distributors in the country and globally, who led our series B and have been, you know, tremendous help in navigating some of the space with us as well, because they also, they obviously handle the blending logistics portion as well, which is which is just complementary to a lot of those airlines.
Speaker 1:Are the? Are you sort of interested in the offtake side from the airlines, because obviously your long term strategy is is the licensing sort of portion of it. Is that something that you're sort of interested in, concerned about, willing sort of interested in working with them about, or is that not such a priority for you with the sort of ongoing licensing model that you're going to pursue long term?
Speaker 2:No, we are working with customers on the off-tech side of things, because we also understand that in order to get to those large industrial multi-project deployments, you need to prove out your technology by doing it first as well, and so, in order to prove it out, we need customers as well. So, absolutely yeah, we are absolutely working with customers in signing up fuel agreements.
Speaker 1:We are absolutely working with customers in signing up fuel agreements On the sort of customer side of things. We've mentioned cost at the beginning and it's very, you know, ptl SAF, esaf is the highest cost SAF that can be produced. It's, I mean the number, seven times the cost of conventional jet fuel. Is sort of thrown around quite a lot. How are you sort of approaching the you know the cost problem, the green premium, as it's sort of as it's colloquially known as, and ensuring you can get a fuel that says cost competitive for you know the off-takers and the customers that you're willing to wanting to provide to?
Speaker 2:Yeah, we think about and sorry, I think my internet just died then as well. But give me a sec, you can hear me all right now. Yeah, I can hear you Okay.
Speaker 2:We think about we think about cost in a few ways. One is optimizing your technology to be as cost efficient as possible, obviously, obviously. But then also thinking about you know strategic ways that you can optimize cost for the end customer as well. And what I mean by that is is that the majority of costs, depending on your technology, come from things that don't necessarily have to do with your technology, ie the cost power, the cost of hydrogen, the cost of CO2, the cost of your feedstocks, essentially. So if the customer is willing to, or, depending on the goals of the customer, if the customer is more willing to maybe even take a fuel that is, say, less green and less carbon friendly, then the cost of that will come down as well.
Speaker 2:So there are business strategies that you can work on, but what we really focus on internally is how can we continually optimize our technology within what we can control to be as cost competitive as possible. You know the goal, and the goal that everyone is working towards and should be working towards, is how can you get your cost down, to try to get as close to parity with traditional jet fuel? Right, and you know that is a goal that everyone works towards, but it's a stepping stone and these things will absolutely take time, and I think that the folks in the e-fuel space are looking at other saff technologies, like heifer, you know, looking to try to tether their prices to be competitive with heifer as a stepping stone before trying to get, uh, even further how are you managing your, your feedstocks?
Speaker 1:you know where your co2 comes from, where you get your your hydrogen, where you get the electricity from. How, how does that look like, you guys, you sort of direct air capture and then sort of green hydrogen, and looking at it that way and how are you managing the fluctuation and the instability of feedstock costs within that so that you can find this stepping stone, traceability down sort of as close to cost parity as you can possibly get to?
Speaker 2:So we're completely agnostic in terms of the types of feedstocks that we have the ability to use, and so it ultimately again comes down to what it is that the customer is looking for for their fuel, and the reason why I say that is that the military and defense have a different profile of what they're looking for than what JetBlue does or some of the other airlines out there as well. So it really just depends on the customer at the end of the day, and so that's the kind of like the guardrails that we think through first before then thinking through, okay, the actual kind of nitty gritty on the feedstock piece, on the siding piece, on the location, how that plays a role in end in end costs. But yeah, it really is just customer dependent you mentioned something before as well about the.
Speaker 1:Basically, you can make fuels cheaper if you reduce the. You know the, the, the amount of emissions reduction that the fuel has. And look at the um different. You know the flexibility and feedstocks and like that. How are you balancing that? How do you walk that tightrope between being emissions reduction and prioritizing that as sort of a company that wants to decarbonize you know, not just aviation but industries versus reducing costs and being cost competitive as a business? Because although they seem to be aligned in terms of overall philosophy, they're kind of at odds at each other slightly in that sense yeah, that's a it's.
Speaker 2:It's honestly a really good pick up and question. And we take the belief that it's not just black and white, and and what I mean by that is is that, like, you're not just going to overnight, you know, change the entire infrastructure and the world is not just black and white. And what I mean by that is that you're not just going to overnight, change the entire infrastructure and the world is not just going to move itself to these new forms of energy. It's just not going to happen. We are very pragmatic in how we think, and that's how you have the ability to be successful. And so then that dovetails into kind of what you're explaining here, which is, in order for technologies like this to be successful, you have to have these stepping stone pathways to get towards your end goal.
Speaker 2:It literally is just not going to happen overnight. We're not just going to think that you know the world is going to move to. You know a complete, 100% renewable. You know regeneration and generation of fuel and other products. So what that means is that, philosophically, that's how we think about it. It doesn't change that we're not trying to get towards that end goal, but we just understand that, in order to get there, you have to make choices along the way that can help get you to that point as well. And in order to do so, yeah, part of that comes with thinking strategically, having other technological inputs, but also thinking about things like your feedstocks as well, and the roles that they play in being successful short term to get to that long term goal.
Speaker 1:It is sort of an interesting sort of thought experiment, because if you, you know, you start reducing the cost and then you go, oh wait, we can, you know, increase the emissions reduction, the amount of emissions we can reduce, but that will increase the cost. Whenever someone sees an increased cost, it's sort of no matter how much you just you can justify it. It's you always sort of you know there's hesitation and question marks there. So it's really it must be really tricky to be able to sort of walk. That tightrope gets sort of narrow and narrower the further along it you get, because the potential to sort of, you know, put yourself in a position where you've got sort of balance, those two together is is not easy.
Speaker 2:Yeah, you also just have to think that again, a lot of the cost in creating a really green fuel comes from your feedstocks, comes from your hydrogen, comes from the cost of power, and so as the learning curve and the cost curve comes, the learning curve goes up and the cost curve comes down. On things like electrolysis, right, the cost of hydrogen comes down, which then enables you to be more cost effective in a more greener way right, and so you have to have it's very much a push-pull, and there are a lot of tertiary factors that play into those decision-making as well. But when you're working on things like this, they take time, and so time can be your friend in that sense where it affords you the ability to wait for other technologies to catch up. So if and when they're ready and they've come down that cost curve, you can then produce a really green fuel at a really cheap price.
Speaker 1:What sort of size sort of facilities when you sort of eventually go out to license are you sort of looking to license for? Because obviously there's the economies of scale sort of argument, the sort of the bigger it is, the less expensive it will be, because you know these things work better at a scale in terms of the feedstock and the acquisition of feedstock and the cost of power etc. So do you have a strategy in terms of how that can also sort of lean into this ability to reduce costs as well?
Speaker 2:Yeah, absolutely, and so the sizing of the potential facilities is dependent on, obviously, a number of factors. But if one of the key factors is clearly feedstocks and so, again, if you're trying to produce a 95% plus you know GHG emissions reduction fuel, you're going to need a lot of power, and so then that limits the ability of how much fuel you can actually produce given any one location. As you decrease those emissions reductions, you know, the need for power decreases, and then your feedstocks become more abundant and you have the ability to then increase the output of what those facilities are, just based on your deployment strategy as well. So for sure, yeah, we have a pretty clear strategy on that, not just for our business, but a pretty wide kind of understanding of the landscape as well, and that obviously plays a role in how you think about your long-term business modelling as well, and, obviously, your licensing and how you think about your future forecasts term business modeling as well and obviously your licensing and how you think about your future forecasts.
Speaker 1:I want to touch on policy and your thoughts around policy, specifically for ptl or or esaf. Um, do you think there's obviously you've had support from the military, but do you think there's enough sort of support out there to sort of help incubate these sort of these new technologies, particularly in the ESF space, to get them up to commercial production? Or do you think there's sort of other things that could be done in the policy sphere that would be really helpful to companies sort of at the sort of level, at the sort of stage where you are?
Speaker 2:So I think policy support and funding support are probably two different things. I think that, selfishly, you can always have more policy support. You can always have more funding support.
Speaker 1:So I would just absolutely I think every person that produces any fuel has said that. When I'm asked a question anything like that More is better, more is better please, yeah, yeah, yeah, completely selfish answer in that respect.
Speaker 2:Look, I think with the change in administration in the US, definitely the sentiment in the US specifically has shifted. But if you think about outside the US you know Middle East, asia, europe, asia Pacific area there are still obviously mandates in place in some of these locations as well that folks need to meet, and there is still a growing appetite for these fuels in those locations, as, as there still is, uh, in the us as well. Now we're fortunate, unlike some of our peers, to have a very strong military and defense business as well. That is there underpins a lot of, if not all, of the work that we do as well. So there's a lot of, and that is continuing to grow, definitely in the us, but the the interest globally is absolutely still there.
Speaker 2:I think that from a policy-specific perspective, yeah, like there needs to be more companies in the space going out and doing what we're doing, and so funding can definitely affect that. Policy changes and shifts can affect that. But ultimately and you know this, having spoken to so many folks, probably better than anyone else is that the demand is so much greater than supply and we need to continue to increase supply. There are a number of ways to do that. Policy definitely plays a role, but funding into the space and technologies, continually going and working on this and folks working on it as well, obviously just needs to increase. Otherwise we uh, otherwise we're going to struggle to meet the goals that we need to meet you mentioned sort of other policy, sort of structures outside of the us.
Speaker 1:If you could sort of take a bit of policy from anywhere in the world and sort of put it in the us, that you think would be really beneficial to you guys. Is there anything in particular that you think, oh yeah, that would be really nice, really good to have, not just maybe for yourself, but for sort of the US industry more generally, whether it's sort of funding or whether it's something like the, the e-fuel sub-mandate that's in Europe and the UK.
Speaker 2:I think the answer that every e-fuels producer would give and this is a complete assumption is that any time that there is a mandate that somebody has to purchase fuel is a great thing, being a potential producer or developer of technology for that fuel. So I think that things like that are just so beneficial to a business for like hours, from a commercial perspective, that you can't you know it's tough to say that something like that would do anything other than help your business, because then your customer profile just increases drastically because of the need for it I've got one final question.
Speaker 1:I saw on your website that you opened an airco store and I wanted to ask were you selling the, the very cool hats, the hat that you're currently wearing in said airco store? And if you weren't, what were you selling?
Speaker 2:we did. We opened an airco store where there's more to come on on on that front as well. It was really a way to bring people into our world. When you're producing fuels, it's taking the lens of our original kind of consumer lens and bringing people into the world and showing them again and educating them and bringing awareness to the things that we're doing. There were hats in there for sale. We'll have to get you one as well so you can wear it on the next podcast and represent the brand. Oh yeah.
Speaker 1:I'd wear a hat on a podcast. If you send it over, no problem, done, done.
Speaker 2:Is it still open the store? The store is not open any longer. We were running it in Soho in Manhattan. We're obviously a New York-based business, but we do have plans, potential plans, for a non-physical store, given how well it was received at some point soon.
Speaker 1:So watch this space for more Echo merch coming out.
Speaker 2:That's it, absolutely.
Speaker 1:What's next? Jumpers, hoodies, all the above.
Speaker 2:Yet to be determined. We're going to keep it under wraps for now. Interestingly enough, we actually a lot of the products that we had in the store. Some of them were one-offs and we actually ran an auction of them, which garnered a lot of attention as well and the funds from those auctions go to support R&D for carbon technologies and things like that.
Speaker 2:So, it ended up being a really good thing and, yeah, we're going to get you some merch so that you can maybe even have one of our peers on in the space and you can do the interview with with some air coverage on absolutely well.
Speaker 1:Well, we can talk about that off off air, absolutely, greg. Thanks so much for um for joining us. That was. That was fascinating to look at what your your guys strategy is, because it is. It is so different from pretty much everyone else in the space and I'm sure everyone will get so much value from hearing about how you guys are generating revenue and looking at your long-term strategy. So thanks so much for giving up your time Of course Appreciate it. Thank you.