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: Nexen Biosystems - How celebrity tequila brands are helping develop next gen SAF
In this episode of The SAF Podcast, host Oscar Henderson sits down with Hamid, Francis and Sergio from Nexen Biosystems to explore one of the most unconventional and interesting sustainable aviation fuel (SAF) feedstocks emerging today: tequila bagasse.
With what seems like every celebrity wanting to start a tequila brand. The market over recent years has boomed, creating an abundant amount of year round feedstock. Tequila production is tightly concentrated by denomination rules, so residues are steady, local, and available at favorable terms because they’re a disposal headache for distillers. Agave bagasse is pre-cooked and pressed during tequila making, which can reduce pre-treatment intensity compared to raw crop waste.
We dig into Nexen's strategy: 18 months of R&D at a Canadian lab to tune pre-treatment and conversion steps, followed by a Mexico-based pilot to validate logistics, contracts, and costs at scale. Along the way we talk policy reality—strong Canadian support for clean-tech research, Mexico’s push to manage tequila waste and align with global SAF goals.
We also discuss the challenge of raising capital in the R&D stage before building a demonstration and pilot plants. Finding investors that are comfortable with the risk profile all aspects of developing a SAF facility is crucial for Nexen as investors bring much more to the table than just capital.
Sit back, grab a tequila (think of the feedstock) and listen to this episode and find out about the potential of tequila bagasse as a feedstock and how Nexen are planning on utilizing it for SAF production.
And welcome to another episode of the TAF podcast. This week I'm delighted to be joined by three guests. I'm joined by Hamid, Francis, and Sergio. And we're going to be talking about Next and Biosystems and tequila. We're going to talk a lot about tequila today, but most importantly, tequila, bagass as a feedstock for staff production. So we're going to play a game throughout this episode. I haven't told any of the guests yet. Every time someone mentions tequila, bagass or staff, they have to do a shot of tequila. So I hope they've got their tequila bottles ready. So this could be quite an interesting one. It's quite an interesting new different form of staff feed stock that I'm sure many people haven't considered totally. So before we get into all that stuff, do you guys just want to go around, introduce yourselves, and then we'll get into next end? So Hamid, do you want to introduce yourself to everyone first? Yeah, sure. Thank you so much.
SPEAKER_01:My name is Hamid, and I've been working um more than a decade in bioenergy, uh circular economy systems, working with uh ag food uh companies, food manufacturing companies, and was trying to help them in RD technology development commercialization. And uh and in this panel, I just uh you know Sergio contacted me and uh now we're here. So I'm going to tell more definitely about that, but I'm going to let Sergio and Francis also uh tell more about themselves and then we go there.
SPEAKER_00:Successfully you've answered the first question without mentioning any of the buzzwords for a shot, so that's very made. Um should we come to you next?
SPEAKER_02:Okay, um my name is Francis. I'm I'm from the UK, but I'm based in Guadalajara in Jalisco, Mexico, which is the the home of Tequilin. Um messing up now. I've got a lot of good missions. Um I just recently joined the team um mainly to assist kind of with admin um at this crucial time while we're currently trying to get our seed funding. So that's my my main role.
SPEAKER_00:Excellent. And and Sergio, do you want to give everyone the brief one, two, threes about how you ended up involved in Nexen?
SPEAKER_04:Yeah, uh well, my name is Sergio. Uh I have been working in bioeconomy project since like 10 years ago. And I work as a sometimes I work as a consultant in bioeconomy here in Mexico. So that's where uh we we see this project and and I contact Hamid uh to to see the opportunity and we are here.
SPEAKER_00:Excellent. Well, it's great to have you all on the podcast. So did one of you want to explain to everyone what the origins of Nexon is, what the idea is, and what the sort of broad overview before we get into sort of the nuts and bolts of it all.
SPEAKER_01:Yeah, sure. Um, so it's interesting because Nexen started this work uh with a little bit different, you know, mission and pivoted a little bit recently. So the idea of Nexen initially really was to helping uh small to medium companies, SMEs, really. You know, small companies they usually don't have the internal RD or even engineering capacity. And it's also one of the most expensive tasks for them. So the idea of the Nexen really was to fill that gap and help them design technology, optimize feeder stock uh in uh bioenergy industry. And then uh something very interesting, I think, happened for Mickey and Nexen, and Samshu just contacted me and said, I have a project working on municipal waste, and it seems like nobody is doing that. And I said, Yeah, I know, I know. Uh nobody's uh interested working on garbage. Uh they call it garbage and they try to not do that, so let's do it. And we have been working on a project on that, and after that, a couple of more projects, and then now the next thing is turning to more technology developments. Uh and the idea of SAF again uh just came up with the collaboration of uh uh Sergio, me, and conversation with some uh companies in Mexico, and also the background that both of us had actually in the agricultural feed stock, the challenges that we have in those feed stocks. And then here we are that you know, we are all of us were working with Francis on the idea of okay, let's use that technology, let's use that feedstock that we have, let's make a use of it and make it uh uh scale it, uh not just in uh not just in the scale of Mexico or Canada international. Uh really the long-term region is international.
SPEAKER_00:So you mentioned that you've got you've got a big, uh strong background across the bioeconomy, not in sort of aviation and staff specifically. So, what drew you guys to thinking that staff making a product for staff and finding enhancing feedstock for staff as being a really exciting opportunity versus other areas of of the bioeconomy that are currently sort of under development?
SPEAKER_04:Yeah, well, uh I I I think in in talking about bioeconomy, you are talking about every kind of products uh that that you consume uh in in the older days today. So you can see if you want to succeed in the adoption of a new process of a bioeconomy, in the adoption of uh a new uh uh and more sustainable way to to use the biomass, uh you can see the products that that it's having more demanding on uh right now. And SAF is one of that. Uh if you see the aviation industry has the goal to consume uh a lot of SAF on the next years. Uh for example, that this year uh the goal was two million tons, if I'm not in a mistake, but in the next six days, six years, the in 2030, the the goal is to consume 10 times more than that. And if you see uh the main technology for that it's it's it's JEFA technology. And if you see the the data, only the four percent of the of the consum of the needs of the markets you could cover with with jefa technology. So we we see an opportunity with SAF, and that's why we decided to focus on on this project to focus on the production of SAF.
SPEAKER_02:And the the initial idea came from a Mexican company, a Mexican company that was looking into producing SAF from tequila waste.
SPEAKER_04:Yeah, the the some oil company in Mexico contact us uh with the idea because they were looking because the aviation flags, uh the Mexican aviation flags companies, sorry, the Mexican uh aviation companies in in in they want they they they are looking to consume SAF too. Um so this company contact me as a consult to see some studies and see if and evaluate the possibility to produce SAF with some biomass or with some feedstock available here in Mexico. And it's funny because uh at the end of the day they they couldn't continue the project, but thanks for that, we realized that that there is a uh there was a big opportunity on the vagas agave. So so that's that's why we start the project.
SPEAKER_00:So it's been much more market-led as opposed to you know technology driven or policy driven, where some people are sort of driven via by those governments. You've very much seen this as the market growth is what's really attracting you in terms of the application for this this feedstock and the technology you're developing.
SPEAKER_02:Exactly.
SPEAKER_00:Yeah, exactly. So there's a dynamic between sort of Amy, you mentioned it, Canada and Mexico within the company. So do you just want to explain sort of what that split is, what's happening in Canada, what the plan is for Mexico, and give everyone sort of a bit more of an understanding about that, how that dynamic works? Yeah, sure.
SPEAKER_01:Um, you know, Canada has been very, very supportive in the last, I can say five to ten years ago, uh, on supporting projects and developing technologies, developing ideas and concepts to turn uh low-value abandoned kind of feed stock to high-value products. And this has I've been involved in that in that journey, worked with lots of universities, and there was a lot of progress in there. And on the other hand, under Mexico, we have a lot of feedstock, the feedstock that uh I believe the companies and farmers they had another use of those, but recently new the modern days, and they want to do something something else, they don't want to just just burn them or just uh landfill them. So the combination of these two helps the dynamic here. The dynamic really is simple. Right now, uh Canada is going to be the source of uh doing the engineering work, design, technology development, and and also it's not just because of Canada, it's also because of the collaboration of Sergio, myself, and Francis, and I've been on this part and really understanding that the feed stock is the part that we need to work on, it's not not just the technology, feedstock engineering is important, and there is a good knowledge on this side right now. On the other hand, under Mexico, Sergio has a very good network of uh companies that have a lot of feed stock. The feed stock is much more affordable and cheaper than the one uh in Canada, um, easier to have uh customized contracts. So this is going to be our model for next uh for the next five years at least. So we get the support from Canada, we get the technology uh in Canada, we have resource, we have access to resources like lab, you know, lab testing research centers in Canada and in Mexico, we have we are looking for lands, feed the stock, and the operation, and most probably the first uh the first uh site of operation there. So this is the way that we look at this problem.
SPEAKER_04:Yeah, yeah. If you see uh if you analyze the the this technology this kind of technologies to to produce half or any other biobasic products, uh you will see the main challenge uh in the way to develop the technology is the cost of the investment and the cost of the production. So uh I think we have the the best of both worlds because in Canada we have the all the facilities and the infrastructure to build new technology, to develop new technology, and here in Mexico we have all the uh all the infrastructure to to take advantage of ultra-low cost uh agro residues, uh to make the operative costs uh cheaper than other places and to build plants uh cheaper than other places. So that's the mix that we we believe that is the the key to succeeds on on these kind of technologies.
SPEAKER_00:Can we just take a step back about the the agave bag asset? And a lot of people some people will be familiar with it and sort of be looking at it, other people it'll be a totally new concept. So you know, how much of it is there? What are sort of the cost benefits of using it, the availability, the sort of the benefits in terms of you know, um you know, processing it before it actually goes through the the whole sort of production process, and you know, what are what are those sort of benefits and attributes of that feedstock look like?
SPEAKER_04:Yeah, well, uh talking about the operation cost in in this kind of technologies, the the challenge, the main the main cost is is the cost of biomass. Actually, HEFA projects are are having problems with the with the increasing because the the cost of this kind of biomass is increasing right now, so so it's it's getting more difficult to make success, to have success on this on these plants. So we we realize the the way the the reason that that that the cost of biomass it is because mainly because it tends to be heterogeneous and tends to be seasonal. You have to produce only in the ways, in the in the time that that that you can have this kind of feedstock. Uh you have to produce uh you have to do a lot of pretriatment uh on the biomass in order to to convert it to to be more homogeneous. So we realize that bagassagab, bagassagav is a kind of fiber that you in the way that you when you are producing tequila, it's you you cook uh the a kind of big pineapple of you can find in the in the agave. And then you can squeeze it. And when you squeeze it, you only you obtain the the waste of of that process, you obtain uh a fever. Uh and so tequila industry is it's it's really big right now. Everybody in the world uh when when one to go party and and etc. At least take one shot of tequila, etc.
SPEAKER_00:And they are trying to make it themselves, so that's another another trend that's going in your favor. Every single person who wants a tequila brand now.
SPEAKER_02:It's yeah, yeah, exactly.
SPEAKER_04:Even tequila Elon Musk has tequila. Sorry.
SPEAKER_02:Tequila production has increased by 150% in the past 10 years. And 600 million uh-huh. Mainly, I think, thanks to the rock.
SPEAKER_00:So yeah, he was gonna be my prime example of selling tequila in the States.
SPEAKER_02:So 600 million litres of tequila is produced a year, and that has to be produced in a small geographical area in Mexico because you cannot call something tequila if it's not made in this region.
SPEAKER_00:A bit like champagne and go and those protecting those protected sort of status, and there's a cheese, rockfall cheese as well, has got the same thing.
SPEAKER_02:Um so there's just tons and tons and tons of waste products from tequila accumulating in this one small region of Mexico.
SPEAKER_04:Yeah, exactly. And in some in some times, for some companies, that waste tends to be a problem because it's tends they are producing all the year, all the all the months, um every year. Yeah, and they have seasonal. Yeah, it's not seasonal. So so to do you are covering one of the main problems with the or one of the main challenges talking about feedstocks of bio biomass. You can have uh the feedstock all the year, and and and you can get it uh in a very small area because the logistic is another important point talking about operation cost. So and and you have tons of you have an abundant uh feedstock, and and and you can design uh a specific pre-treatment for that. So so that that's the main reason that we decided to go with the tequila because we have an abundant feedstock, uh all the girl, cheap, uh in a very small area, so that that makes us uh a huge uh advantage uh to produce cheap uh stuff.
SPEAKER_00:Are there any sort of competing use cases where this where the the bag ass is is being used for sort of other other means at the moment, or is it sort of you know something that's very much untapped and this is a new sort of feedstock for any sort of renewable fuel or any sort of sort of upcycling of it?
SPEAKER_04:Yeah, well, some companies are realizing that that the bagas you can use it even because in the in the way to produce tequila you need heat. Uh so normally here the the boilers uh they use uh or gas, uh natural gas, or they use oil for that. So right now some companies are realizing that they can use their their baggage to produce their heat, and some companies use it. But that's the but it's only some some very few companies, and that's uh I mean there is a lot of uh a lot of tries to to to make uh useful uh the bag gas, but uh but right now uh that's the only alternative, uh the the good alternative to to use the bagas.
SPEAKER_02:The waste did become quite problematic, didn't it? So the government had actually started had to um create some new regulations so that farmers, I think farmers were like burning the bagas for a while, and they'd have to have quite a lot of land to be able to sort of leave it to to like compost. So really there's a big benefit because most producers um see this waste product as an issue rather than something that they can use as um to get any benefit from.
SPEAKER_01:Yeah. Um, I want to add here something. I know Sergio and Francis explained this very, very well. I just want to make it a little bit more expanded in a sense that whatever they mention right now is valid for every ag residue. Right now we are starting to get agave because of the network that we have and because of the all the connections and everything. But generally, we have millions and millions of tons of ag residue across Canada, US, and Mexico. And that's why um you know recently bioenergy is looking into that people stuck more seriously. But there are a lot of issues, as Sergio said, you know, very fluffy, low, low bulk density, the ash content, heterogeneity, and everything. But this is exactly why we want to do this project. Uh and agave right now is number one, but the reason is that we have fiddle stock, and this is the only way we can meet the international targets. Otherwise, with the current technologies, with the current fiddle stocks, there is no way we can do that. So, agricultural residues, because of continuous production and say generation of that, we have that option and we can meet those targets. And Agaba right now is number one because of the all the logistics and um everything that is happening for this project that we are connected to people who are producing foods. Yeah.
SPEAKER_02:So for the pilot project, it's a good idea because it's the lowest risk financially.
SPEAKER_00:And then but presumably when you branch out, you're going to stick with alcohol waste products. So you're going to go like hops and you're going to do potatoes from Volcker, and presumably you have to stick to the alcohol theme just because that's on trend.
SPEAKER_01:Uh not necessarily.
SPEAKER_03:Uh but I mean it depends what they're offering us, these companies.
SPEAKER_00:Oh, is that what it is then? There's some deals with the tequila companies in place.
SPEAKER_03:Exactly.
SPEAKER_00:Yeah, one of the biggest benefits of this project is really lifetime uh tequila subscription. But uh let's see who's going to give us that. That's very wise. Keep your options open.
SPEAKER_03:Um I hope the rock is listening to this. He could invest.
SPEAKER_00:I wish the rock is listening to this.
SPEAKER_03:I'm gonna find him a link to him and send it to him.
SPEAKER_00:Um on tequila companies, are they very sort of easy and open-minded to work with on this? Are they sort of very sort of open to sort of finding alternative use cases to their to their um the use of the waste products they've got? Are they sort of do they require some convincing? How's that sort of relationship?
SPEAKER_04:Yeah, they they are uh they they look this project with with good eyes, as we say here in Mexico. Uh they look very positive because they right now that that feedstock, that biomass represents for for them a cost because they have to pay for someone to to send it to the landfill or or make a compost or do it something because it's it's it's a waste for the companies. Uh they they they see the the this biome as as a waste. So so they are really open to to help in this project, open to participate on the projects. Actually, we we are looking to we we expect to have at least three tons uh of magasagai per day all the year to use it to produce that. So that's a good beginning. Uh and and the government it's it's the federal government uh actually it's just launching uh a way to promote the biofuels and the production of biofuels here in Mexico, and the local government uh they want to support the tequila industry, uh especially in this in these parts, because it's it's one of the challenges that have the tequila industry, the the current waste that they produce uh on the production of tequila.
SPEAKER_00:On that, on the sort of support of governments, a lot of the conversation around staff revolves around policy, and by the sounds of it, Sergio, a lot of the the governmental policy drivers coming from sort of the tequila side of the policy as opposed to the aviation side of Mexican government. But is that sort of the existing the totality of the policies? Are there sort of other things you're working with the government or talking to the government about in terms of you know setting up a policy structure that helps producers like yourselves? And and is this also sort of something that's being worked on in Canada as well, with the the support that can come from the Canadian government and the sort of the technology development sort of aspect of this uh of this project project?
SPEAKER_01:Uh this is a good question, that's great. Uh no, in Canada there is a very high uh high level of support for doing R and DN technology development in clean tech. Uh honestly, I don't know it's going to continue with the next uh the next uh you know office, but right now there is a good support, and um I believe we so right now we're kind of considering that source of financial support for our MPs, which I believe that it's going to attract also investors too, because we're going to get a good portion of our IP cost from the government. And the good thing is that it is the government doesn't have any claim on the ownership of the technology or anything, so that's a good thing. On the other side, under Mexico, uh maybe Surgery can make it you know a better comment, but it's what is obvious is that there is a very strong pressure to manage the waste and uh reduce that waste and growing the interest in the renewable feedback. And the last item, I believe, was you know the things that happened recently in the US and all the relationship with US-Canada. I believe in Canada and uh Mexico the there's the interest of collaborating with each other is getting more and more researchers, the businesses, the governments, and I believe it's going to be even bigger. So that's why we see even for um from the federal level, a bit in the country level, national level, we have support of this collaboration.
SPEAKER_00:So you got anything you want to sort of add on the policy side, or do you think Hamid's covered it there?
SPEAKER_04:Yeah, I think uh Hamid covered it uh mostly. I mean I think Canada has the opportunity to to support more research and development. Unfortunately, here in Mexico is not a country that that promotes a lot of uh research and and and development. So but at the same time they they are uh forced to to make policies in order to promote these kind of uh projects, these kind of products. So it's it's very welcome uh for the government that these kind of projects, because at the same time we are working uh with Canada that we are getting uh stronger relationships with with all these uh world international policies. And Canada has support for the research and development projects. Uh so that's that's uh that's a good and and Mexico wants uh to in a certain way without support uh with funds, uh they want some projects about that, so so it's very welcome for the for the federal government.
SPEAKER_02:Mexico does have the the federal civil aviation agency has a policy that's kind of similar to global policies that we need to be moving towards adopting more SAF and producing more SAF in the country by 2030. But the issue is that the government doesn't go as far as to actually say, here we go, we're gonna provide this financial support or we're gonna put some regulations in place. That people are kind of forced to have to do it. So these kinds of changes, when they happen in Mexico, are usually driven through industry. In it, it kind of happens in the opposite direction. So that's kind of what we're aiming to more sort of guidelines. Guideline, loose guidelines.
SPEAKER_00:Yeah, yeah. Well, do you think on that, do you think it actually, you know, is needed? There are there is a train of thought that goes, you know, policy isn't the way, creating the market with regardless of government policy, is actually the way to to growing staff and the whole argument through sort of book and claim and creating a really dynamic market is a better way of scaling the industry at a faster rate than waiting for these individual policies to come. Or do you guys sit there and go, no, we actually do want more government involvement? So, what where do you guys sit on sort of that argument in terms of policy versus market dynamic market growth?
SPEAKER_01:Those are good questions. They're kind of very kind of Harold. Uh, I believe for the projects at these level. Um the way that I see really is that you can you can choose one way, you have to push them options and at the same time. The investor still is a kind of a level of risk for the investors to enter this market, still is a very young uh industry and technology-wise, and the investors, even the ones that they know the environment and the industry, it's risk for them. And also, there is no government that can support the whole thing 100%. So it should be a combination of these two. That's why um for us, really being connected to the investors, the appropriate, the right investor for this project is very important. The investor who knows the environment, who knows the government programs, who knows the technology, the challenges, and everything. I do this thing for yeah, yeah.
SPEAKER_00:So you mentioned the investor, the investor piece, and what investors need. Do you wanna what investment have you guys had so far? Where's it come from, and what sort of the the longer, sort of short-term, slightly medium-term investment targets and and goals that that you guys have set?
SPEAKER_04:Yeah, right now I think we have uh uh in the best uh time because we have opportunity to get funds for the Canada government from the 50% of the total of the of the first phase. This phase the idea is to develop the engineeries to to make the Fierce uh Pylon Plan, Fierce Pilot Plan scale in here in Mexico. And we are looking for$500,000. That represents the 50% of the total of this project. Um and that that's the the way that that we see that we will be able to in the next phase build the the a demonstrative plant and and start to produce stuff in the in the next five years.
SPEAKER_00:So so the you're looking at a demonstration plant. When are you looking at having the demonstration plant sort of operational? What's the target for that? And then with the sort of pilot plant afterwards, what's the sort of the scale up timeline?
SPEAKER_02:So it'd be 18 months for the research and development project, right? And then at that point, we'd be ready to start building the pilot plant for which we would need to get kind of second stage funding. Interestingly, we've had a lot more interest in from investors who would be really interested in in funding the second stage of this of this project. What we're finding kind of more difficult is is finding um the initial seed funding to be able to carry out the research and development phase of the project. Which I don't know if we'd mentioned that that's that's going to be done at the University of British Columbia. Did we did you mention that already, Hamid? That yeah, because there's some like excellent facilities. I think it's important to understand that it's a world-class um research laboratory where we can carry out this research. So it's it's a pretty low risk. Um in comparison with some other options, you know.
SPEAKER_00:That that's interesting when you say the the the first sort of the speed funding is is a lot harder than the than the pilot plan. Is that because you think lots more investors are just are not looking at sort of investing that that small amount of money for that for those returns, or are you sort of people actually more sort of waiting for the the RD to sort of be developed before that they they actually pull the trigger on on doing investment? Is it sort of a bit of both? What do you think the the reasons behind this sort of gap in this RD funding stage?
SPEAKER_01:I just wanted to mention that uh when you look at the technology that are out there, majority of them came from a research center or a university in an organic way. Organic way means that the university as an independent entity has authority to go and apply for funding and the professors, and but it's a long process. I have five years, ten years of process, slowly students are involved, and that makes sense. And that's why you instead of just pushing the project, pushing the investors on the early stage RD phase, you go and slowly take the money from government with the more affordable research uh personnel, which are students, right? But when you go to industrial scale RD, it means it's an expensive process. Expensive not just by the absolute dollar value, by the conditional risk and dollar value. So that that's the same story here. So when now we are having kind of ambitious uh timeline for RD, ambitious not in a sense that it's not doable, in a sense that we don't we don't want to go to five or ten year timeline. Uh it means that the risk for some investors are high because they want to see something, they wanna see a result. So this is the part that's answering your question, which makes it a little bit difficult for the early stages because people don't see anything. So that's why we need the investors who understand this process 100%, they understand the value of the fiddle stock engineering, they understand the value of the RD, and they know that what are the challenges. Um so those for those investors, the risk is low because they know the process. Um, but right now, and as Francis mentioned, most of the investors we talk right now, they were interested in the round food, which again makes sense. Uh, so this is the challenge we have right now.
SPEAKER_04:It's yeah, and I think it's it's uh a little bit of both because for the I mean, you know, uh talking about investment uh in any kind of investment, the value of that uh the seed capital tends to be the more risk uh part uh face of the of the project, but at the same time it's a phase of the big opportunities where the people get super rich, the investors get a super good deal uh because it's cheap. And right now we have uh we talk with with some venture capitals that they understand the the advantage that we have here in this project and and they are really interested, but at the same time they they told us uh they told us about the hey the our minimum ticket that we invest is 10 million or 1 million dollars, so I mean five million dollars, so so you need to find an angel investor or something like that to to do that. Um and I think it's yeah, it's it's uh the the value of that is the is the most difficult uh maybe is the most difficult time to get uh an investor, but at the same time, you can find all the you can cover all the risk uh in that in that in this in this phase and have a good opportunity. For example, in this in this time, we are looking okay, we are looking for seed capital, we are conscious that that maybe it's a little risk that another phase that the next phases, but we have the top facilities in we are we have the support of the Canada government, we have the support of the University British Columbia. That it's uh we are working with with a lot of kind of experts that that have experience in some such projects, and and we have uh uh a good biomass, uh a good feedstock, and we have a uh a golden team, no? Right? So so we see like uh this is the kind of opportunity to to get a really good deal, uh cheap and and and very, very good deal for the uh very encouraged investors that that they see the the the future and and and they see the opportunity that we have here in the seed capital face.
SPEAKER_00:So I might be being mildly facetious, and I think some people might think, why don't you just roll the pilot plant investment and the seed RD together and you know do RD and seed, make it a bigger ticket and and bring those sort of investors interested in the second round and see if you know you can use their interest to cover the the RD costs you're struggling to find that. Why is that not a good idea or not possible?
SPEAKER_01:Or is it uh it definitely is, uh, but you know, the level of uncertainty are completely different in RD and pilot pilot development and engineering. Always engineering has a way higher level of certainty. You know what exactly you want, you just build it and run it, just drop the ship. But RD has a level of uncertainty, uncertainty not in the sense that it doesn't work at all. It means that the timeline is variable, the resources are valuable. So it the the people who are involved at these two different phases, there are two different types of people, the way that I see that because the people who like to be involved in a risky process but get more, they have completely different personality, different people, different um resources, and that's why we try to separate them really to see that we can get the people, attract people for that specific thing. But maybe at one day uh we think about uh displaying those.
SPEAKER_00:Uh, if the right investor shows up and we'll do that technically, there's no problem for us to the um because you mentioned the strategic nature of the investors you're looking at who are your sort of your courting in terms of they need to have this market understanding, they need to be comfortable with the risks and whatnot. They apply equally at the RD level and equally at the pilot level. They understand the risks, they will have likely invested in other projects, albeit not the same technology, they'll be familiar with staff. Um, so you can see how you know blending those two together might potentially bring bring more people together because there's they will be the nature of those investors, are naturally more comfortable and are comfortable with the level of risk across the whole production, the whole cycle are not familiar with the challenges in terms of longevity, how long these things take, the potential for delays, the challenges in RD, they're willing to sort of work and help contribute to bring to bring projects to reality. It is completely true.
SPEAKER_01:Yeah. I mean, you know, for again, if you're 100% open to that, and this is the way that we just present to investors, otherwise, from an uh organic way of doing the work, I mean, for us, is there's no difference, it's like continuous work to do. Um, but you're right, you know, uh, this is completely doable. And just I believe that if we uh if we get introduced to an investor who's really interested in this, we are going to present out with because uh this is something that will happen. Um together.
SPEAKER_02:We were just kind of presenting them separately initially to take advantage of the opportunity that we were offered by the Canadian government as well, which is that that grant is just for the research and development phase. But in order to be able to take advantage of that grant, that we need to obtain some private funding as well to demonstrate industry interest. So if that doesn't work out, then then we'll that will probably be our next strategy.
SPEAKER_00:On the sort of the challenges of of finding investment, there are so many people around the world in a similar boat to what you guys are. What's the sort of the biggest the challenge and the most challenging thing that you sort of you find or are finding around this the quest for for finding funding?
SPEAKER_02:I think this is something everyone's talking about constantly, kind of when talking about SAF in general, is that everyone has a consensus that more investment needs to be made in research and development, but no one has actually taken the step to say, okay, we're gonna invest in research and development. So that's sorry, Hamid.
SPEAKER_01:Yeah, no, I just want to say I believe the challenge is that we need believers and people to believe in this not just as an as a business opportunity, believing in the South as a very young but very, very high potential sector. Uh, so that would make make everything easier for us and also for for them. It's always uh you should be very lucky to work with you know investors who believe in your mission and your project.
SPEAKER_00:Yeah. I think this is one of the conversations I have a lot is around justifying the investment case for staff versus other invest in sort of infrastructure projects, bioecono economic projects in other places. The there is a big drive to invest in you know renewables and things that can help an environmentally led sort of investment mission, but it's it's it's highly competitive, not just in staff, but with other other industries, and potentially the staff industry could be better at justifying its investment case and the reason why it's critical to invest in staff as opposed to other things that are seeking investment as well.
SPEAKER_04:Yeah, and and I think you can see as as investors, you can if you analyze the reports for Yata, for example, or another global uh aviation organization, uh, you see that they they have goals to to consume a lot of uh stuff. And actually the the truth is that nobody knows uh actually how we could uh produce all that demand that we need to produce. So if you when you are investor and you see okay, what's the opportunity here, uh one of the fierce points that you see on your checklist is the market, and you say okay, it it if you have a uh good opportunity on the market, that's a a good uh that's a good point. So right now here we have uh over demand uh for 2030 the they expect that that we can cover only the 16% of the demand on SAP in the world. So so that's even if you have uh if you lose a client, you have you have the opportunity to get another 10 more. So so that's a really really good opportunity. Maybe it's not a fancy uh industry like uh intelligent artificial now or something like that that everybody wants to invest in that. Sergio, I'm gonna stop doing that.
SPEAKER_00:It's a very it's a very sexy industry.
SPEAKER_04:Yeah, of course it's a very yeah, yeah, yeah, but but but maybe some some it's not as popular as as intelligent artificial. So so not many investors can see the opportunity that we have here in this sexy industry, of course.
SPEAKER_00:Yeah. So, final question. I want to ask each of you what's one bit of advice from your experience that you've had so far that you would give to other people thinking about embarking on developing technology and production and stuff who are in the same boat, or just to generally people who are sort of in the industry, what's sort of one either big takeaway bit of advice that you you think that other people should know? So, Hamid, I'm gonna I'm gonna start with you. So, Francis and Sergio have a bit more thinking time than you do, unfortunately.
SPEAKER_01:Uh my suggestion is not just about the SAF projects, it's generally about everything, but for SAF is even generally for engineering projects, it's even more important. Be in a good team, be in a multidisciplinary, diverse skill team. Uh, no matter how good I am in my field, I'm just going to see my field of expertise. Uh Sergio, you can see completely different version of the story of everything, and then we can talk about it for the sample. Francis, I believe this is the most important thing for the engineering projects in the South is one of the one of the big ones, definitely. Francis?
SPEAKER_02:Oh, mine would be if you really believe in what you're doing, then nothing ever really feels like work. That's what I think would be my best advice.
SPEAKER_00:Excellent. And and finally, Sergio, what's what's your big takeaway or a bit of advice?
SPEAKER_04:Yeah, well, I think it's uh I'm agree with Hamid. I think it have uh the team would be the key to to succeed, you can you can sell uh a cheap product, but if you can have a goal team, you can you can sell it. So the team and and I think to always try to be open and and very focused on the opportunities that that because if you plan something, especially talking about research and development, definitely maybe you your plan will not be uh as you as you think. So you have to improve all the time so be open and and just try to find the how how to how to fix it and how to make it, and um that's it.
SPEAKER_00:And you both I was gonna accuse you of just copying Hamid, but then you you came in with the alternative one as well. So um that they're all I think excellent takeaways, and I think um people can that abide by that will inevitably be successful in in whatever endeavors they're doing. So, Hamid, France and Sergio, thanks so much for joining us. You can go and have a tequila now. And um, yeah, thanks so much for your time to to share about Nexen and what you guys are working on.
SPEAKER_02:Thank you so much for having us.