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
Vinesh Sinha, Fathopes Energy: Revolutionising glorified rubbish collection
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This week's episode sees Vinesh Sinha, CEO, FatHopes Energy, joins Oscar Henderson for a conversation on the SAF Podcast.
Vinesh Sinha dropped out of university in 2007, inspired by a Top Gear episode, and built FatHopes Energy into one of Southeast Asia's most sophisticated sustainable fuel feedstock operations — with a digital traceability platform years ahead of the competition.
In this episode, Vinesh talks feedstock aggregation, the realities of scaling a waste-oil supply chain across Southeast Asia, and why FatHopes Energy is now moving into SAF refining with a 300,000-tonne greenfield plant targeting operations by 2030.
Plus: the truth about POME and palm oil, why AI is the only way to solve traceability at scale, and why Vinesh thinks the SAF industry is dangerously underestimating three things — feedstock, infrastructure, and integrity.
This is a wide ranging conversation and one that digs into the critical components that is helping build Malaysia as a SAF global hub.
Check out the full episode on your favourite platforms or use the link in the comments.
Welcome And What’s At Stake
SPEAKER_00Hello and welcome back for another episode of the Staff Podcast. And this week I'm very excited to be joined by Vinesh Linha from Fat Hopes Energy. And today we are going to be talking about feedstock, supply chain, aggregating feedstock, getting a project up and running. Because Vinesh's and Fat Hopes Energy have embarked on the journey of getting a refinery established in Malaysia. We're going to talk about the Malaysian staff market and things and overall thoughts around staff industry trajectory, development, and the challenges that Vinesh has been facing over the past few years. So Vinesh, thanks so much for joining us. It's great to have you on the podcast.
SPEAKER_01Not at all.
A Founder Story From Top Gear
SPEAKER_00Thanks for inviting me in. It's a real pleasure. So before we get into Fat Hopes Energy, do you just want to take everyone through your background and everything before Fat Hopes came about?
SPEAKER_01Sure. There's not much because I dropped out of university to start this business.
SPEAKER_00Like all good founders.
SPEAKER_01It's cliche, but uh it's a reality, right? So that takes us back all the way to 2007. Um and before that, I was a I was extremely inquisitive. I enjoyed automotive. Um, come from a family of uh mother and dad who um frequently enroll themselves into rallies, so very explose to cars and the mechanics of the automotive sector. Um and one unique thing was that I grew up uh in and among uh diesel engines, which is not very conventional where we come from. Uh consumer vehicles here in in Southeast Asia predominantly are petrol, uh and specifically in Malaysia because um uh fuel is heavily subsidized till recently. Um so there was never a need to want to look for more efficient vehicles. But for us, because of the practicality of jungle expeditions, um diesel uh was something that we opted for. And I think that's one big um difference uh between me and my peers growing up. We thought more about the energy that we use because of the circumstances that we found ourselves in or put ourselves into. Um and yeah, so I went off to university, I realized I was um sorry, I I I started um uh with a diesel car as my first vehicle given the history. Um I was an avid follower of Top Gear. Um and there was an episode of uh one episode where they put uh used cooking oil into a red Mercedes and drove it from London to Brighton, and that was the inspiration for me to do the same in my car. Um and that was really the first step towards um understanding or opening my uh horizon towards biofuels. At that time, I didn't know it was called biodiesel or biofuels, even um, it was just a way for me to subsidize my own energy consumption, and um that's where it all got started.
SPEAKER_00I'm not sure Top Gear is famed for its sustainability messaging, but I'm glad someone picked it up after that one episode.
SPEAKER_01It's ridiculous, Oscar, you say that, because the main motivation for me was in that episode the that the Mercedes drove from London to Brighton but never returned. Um and the motivation for me was to kill my car uh in hopes of getting a new car because my dad gave me a 22-year-old Pajero that was not very fancy. Um, so it was exactly that uh that got me into it, right?
SPEAKER_00Yeah. So, and then tell us about Fat Hope's Energy. So that came out, you dropped out of university, founded Fat Hopes Energy, I'm assuming, and what made you want to make that leap and start doing what you were doing at the time that it happened?
SPEAKER_01Yeah, so um I started with uh uh using used cooking oil in my own vehicle. Uh that's before I went off to university in my final year in tertiary, sorry, in secondary education. Um, and that slowly led uh to a small little cottage industry kind business where I was doing it for myself and a few others. Um, as I said, there were not many people using diesel at that time, so it was not as pervasive as I wanted it to be. But I was really uh someone looking and seeing and understanding what I was doing, and then um the motivation came from the fact that my vehicle being so old uh didn't have any visible emissions. Um, and there was a crackdown on commercial vehicles that had a lot of visible emissions. Um and that was my first customer, right? Someone who said, Hey, why don't you do the same thing for me so that I could avoid the fines of emissions? Um so I did that, and then time came for me to leave and to enroll in tertiary education. Being the eldest of three siblings, that was extremely important from the parent standpoint. Um, I was not very motivated or I didn't have any interest to continue education, um, given the fact that I was already doing something that was relatively lucrative at that point. I was being paid to take waste away, I was being paid when the finished product, which was essentially heated used cooking oil, heated and filtered used cooking oil blended with diesel. Um but I did. Um I did then embark on my tertiary education. Um I went off to London to continue business and finance. Um, and the reason for that course is it was the most generic course I could find. Um and um when I landed in London, uh there was biodiesel at the pump. And that really piqued my interest. You know, trying to figure out what's this, right? Um three months later, um, there was the introduction of the 30 pence homebrew fuel tanks. Um, and on the front page of the newspaper was a picture that looked almost identical to what I was doing back home uh here in Malaysia in my backyard, right? A guy with an apron with a bunch of buckets um doing some blending. Um and that was the trigger for me, to be very honest. That showed me that it was being done widely enough for the government to want to take notice and want to tax it. Um that then um uh enabled me to ask more questions and to discover what's going on there in the UK. Um and very quickly thereafter, um someone reached out to me and said, Hey, if you're so interested in this, why don't you come back to Malaysia and do it for us? It was a logistics business that was tendering for uh for a green document, uh sorry, green logistics uh contract. Um, and there was nothing green uh in Malaysia in 2007, right? Um so I took that plunge um and um decided to drop out uh against um parents' will. Um but looking back today, I I don't regret it. But that was really the the cusp or the inception um of how I got into it.
SPEAKER_00Have your parents forgiven you for dropping out yet?
SPEAKER_01Yes, they have. Um thank God for that, 20 years later. I mean, it didn't take them so long uh to give them the benefit of the doubt. It was two years of high friction, and then it was all good, right?
From Backyard Biodiesel To Feedstock Pivot
SPEAKER_00That's pretty good. That's that's not too bad at all. So you came back to Malaysia and then it's I hope's energy started out being in the feedstock, collection, aggregation portion of the SAF industry. So you were getting trucks and collecting all this feedstock and aggregating it so it could go to other refineries. Is that right?
SPEAKER_01So I'll take you back. Um the business actually started as uh as a UCO blended with diesel, um, which we called biodiesel uh back at that time, and then it evolved to a biodiesel manufacturer, a really small outfit producing five tons a day. Um and we did that from 2007 to 2013, essentially domestic feedstock. I would drive the truck in the morning, I'll do the aggregation, I'll come back in the evening, I'll process that material overnight on a first-in, first-out basis. Um, and I would supply construction sites, retail users, uh retail users in the industrial sector, um, because that's the sector that was not subsidized. Um we did that for six years, right? 2007 to 2013. Um, and then in 2013, um, oil prices crashed and we needed to make a critical decision. Um we realized at that point that um export was the only option. Um, and for us to scale the biodiesel production and feedstock in tandem to meet the export requirements uh was really taxing. Um and that was the busy, that's where um the pivot was, where we decided, okay, we would divest from the biodiesel manufacturing outfit that we had and focus slash double down um on feedstock. And we were already pretty um uh uh uh I mean the market already knew us in the feedstock business uh uh locally. Um so we decided that that would be um the path forward for us instead of investing in two tracks um of the same business. Um, we decided to cut one and focus on um the feedstock, um coupled with the fact that one of the world's biggest HVO um uh refineries is just down south in Singapore. Um that was really egging us on for good, maybe two years from 2011 to 2013, um, for us to be sub for us to to supply them the feedstock. So combination of these few uh brought us into the biodiesel industry and then out of um biodiesel. And and not for a moment will I say that we are a refiner because it was a really small outfit that we were, or refining capacity that we have. We started at about five tons a day, ending up at something like uh 30 tons a day, which is still small relatively. Um but that was the was the journey, and then in 2013, um we decided, like I said, to double down on on feedstock um uh for about 10 years till we then reconsidered coming back into um the refining realm.
Scaling UCO With Digital Traceability
SPEAKER_00And so let's fast forward a bit to today. So, what's the agriculture, the the um the aggregation feedstock collection looking like now? How's it more sophisticated and established and scaled than it was in sort of 2013, sort of those those earlier days? What's changed?
SPEAKER_01Yeah, so I think um that at the point of pivot, um we realized that we had a major differentiator. And and I think the major differentiator that we had was the priority to traceability uh was something that we found very important from DEVA. Given the fact that we are originating the cargo, um, we are going from door to door, picking it up um from FMB restaurants, etc. Uh, we saw a big value in making that more known to the stakeholders of the supply chain. Um we were one of the we're sorry, we were the first um ICC certified company out of uh Asia, um I think we were certificate number eight or ten or something like that. Um a big priority to uh traceability, um, which at that point was good to have, it was not a necessity as it was today. Um having said that, um, we built on that uh basis, right? And what we realized was for us to scale, um we needed to have a digital platform, right? Um so we started to build out the digital platform from 2013 to 2016 um internally, and we launched that system in 2016. Well ahead of the game. Um I think the next the next uh alternative only came like two years ago, um which is a good six, eight year head start. Um so that was the progress from 2013 onwards. So one of it, one major differentiator or uh initiative that we had to prioritize internally was digitizing um the entire supply chain so that we have visibility and we could ensure robust traceability. Um the second thing that we did was we built our own fleet, um, which is not very normal in this part of the world. A lot of people subcontract different regions. Uh, we decided again uh to do that differently. We will own the supply chain. We want to be the custodian of the molecule from the point of origin all the way till the refinery. Um, and that's the second, I think, big factor. Uh we grew our footprint in terms of depots or collection centers, we grew our footprint in terms of logistics and the trucks. Um and I think that the final uh um uh component that really encapsulated it all was for us to be able to provide an end-to-end solution to people who needed these materials that um we realized eventually were enabling them to achieve FID. Um, and that's where we come to, right? 2019-2020, um, when we were a critical component to several uh refineries achieving FID, which really triggered the thought for us of, hey, if we're doing this for others, um, can't we do this on our own? And that brings us to the latest chapter of the business.
SPEAKER_00And how so how many trucks and collection depots are you at now?
SPEAKER_01So across the region, uh we operate uh wholly owned uh about 300 vehicles, um, 60 locations uh across the region, um, almost roughly, roughly almost one per state in each country. There's some states that are that we have more than one, but generally on average it's about one. Um so um that's where that's where we are uh today, and all of that material is aggregated back in Malaysia in Port Klang, uh, which gives us a hub and spoke-like uh process or or aggregation methodology uh which has leaned into um the economies of scale for the development of a refinery in the same port that we've been using as a consolidation site.
SPEAKER_00Yeah. And was any part of that scale-up process more challenging than you than you thought it was going to be? Was it building up a traceability ecosystem that was slightly more problematic than you potentially thought it was at the beginning, or was it actually setting up the logistics supply chain infrastructure so you can control that molecule all the way to the refinery, or was it all just way more challenging than you thought it was going to be when you when you started the scale up?
SPEAKER_01Yeah, I always say this, right? If I was not as naive as I was when I started, I probably would have never started, right? Everything was way more complex than than I than I thought it out to be, right? Um I mean, coming from uh, like I said, a cottage industry that didn't understand compliance and regulation and being a late teenager, um, there were many questions of why this and why that. And instead of trying to uh circumvent them or negate them, uh we preferred to ask why not, right? Um so every aspect was a lot more complex than we thought. Um the subjects I didn't like the most was the subjects I needed or was the areas that I needed to be strongest in, um chemistry and people management and math. Um, but yeah, um the way we looked at it is um how can we contribute in the small way that we think uh we have got value um bringing to the table. And that sort of forced us to look at the things that have not been looked at, or turned over um beliefs that no one else has. Um, and we've we've created that niche for ourselves over the years where what was complex for us and what was difficult has become an area of expertise because we just had no choice, right? Um but having said that, I think um the one key challenge was understanding and harmonizing all of the policies, laws, and regulations across Southeast Asia, given that we're operating in multiple countries, when we were um new to the game or early to the game, because many countries didn't have uh a regulation in and around waste oil, right? Um the waste material itself was not looked at as a resource. Um it we it was not even known that was that there was this material available um as an energy uh alternative. So I think first was the education and awareness that it could be used and it was available at scale, and there's a viable system that is economically uh rewarding for us to be able to uh achieve the aggregation. And then the second was um once that when once that base was established, was how do you build an ecosystem and an industry around it? So, more than building a business, we always say that we've built this industry, um, given the fact that no one knew um that this material was actually uh a resource. We converted it from a waste to a resource for many nations in this region.
Palm POME And Feedstock Eligibility
SPEAKER_00Yeah. And talk to me about Pome or Palm Oil Mill Effluent, because there's so much of that in Malaysia, and palm oil probably doesn't have the best sustainability reputation globally, if we're sort of, I think we're putting that kindly. Um, there's a lot of skepticism about it. Palm oil is a undermining the the traceability angle, and in areas where there is a lot of palm oil mill effluent available, it's a val it's a valid feedstock um for staff. So do you want to talk to us about the challenges around that? And also, on the one hand, being trait fully traceable and understanding what's eligible, what's not for staff, but equally making sure you're utilizing all possible feedstocks because one thing I think everyone agrees on in the world as working in this industry, all pathways, all feedstocks that are eligible will be needed in order to scale the industry to the level it needs to to have the impact that it wants to.
SPEAKER_01Yeah, so I think uh a few things, right? First and foremost, um I come from an era where there was no prescription of feedstock for biofuel. I mean, 2007 till till RED, till the Renewable Energy Directive, um, anything and everything could be used, right? Um, and at that point, the evaluation was economics. And that that's about it, right? Um, if biofuels was cheaper, we use it. And I think that that's a massive um uh undertapped uh incentive today that has gone off the table because um there's prescription, right? So I think that's fact number one. Number two is it needs to be said that we're totally feedstock agnostic. We're very well known for use cooking oil because it's very visible and the whole load of vehicles out there and a whole load of publicity. Uh but for us, the view is that there needs to be a standardized measure of success. And for us, that's carbon emission reduction. Uh, some give us more than others, and and and vice versa. Uh, but saving emissions in a particular place in the world um is the same as as moving that emission savings somewhere else. The third element is that um it we should really prioritize utilizing what we have uh um regionally or domestically to minimize the need to move these materials because again, then the measure of of success with vis-a-vis emissions um get derailed, right? Um now coming specifically to palm, um I've got no uh particular personal opinion on what's good and what's bad, but what I know is that many materials um today should not be going into the food stream, right? And that's way beyond palm oil meal effluent, to be very honest. Um that's point number one. Point number two is that um should there be an emission savings that is uh that is formidable, it should be it should be uh uh a stream that's taken relatively seriously. Um and I think the final thing on this is that prescription of what can and cannot be used has drastically curbed innovation. Uh, because today everyone only looks to the direction of what has been outlined to be used. And then you bring, then you come on to the question of who decided what can and cannot be used and what was that measure um of or what was the criteria uh for it to be for it to be included. So I think it brings up a lot more uh questions than they than than than answers. And I'm a big proponent to um uh abolishing any incentive for particular material because I believe that the moment you do that, everyone just looks in one direction.
SPEAKER_00I suppose one of the challenges is that a lot of this conversation has been taken out of Europe with its mandates and it's very and what's eligible under um the Renewable Energy Directive, and that is setting a lot of the conversation around eligibility because of mandates and Europe being such a strong demand center, and often the demand centers are setting the standards as opposed to where the supply comes from. And so it kind of there's a little tension there between, particularly in Asia, where there's an abundance of different. feed stocks that is available versus where it's at the once refined where staff's eventually going to be end end up being consumed. So that's that's a challenge in the sense that lots of the fuel that is made in Asia is exported to Europe currently and in that sense it has to be compliant. But there's so much other feedstock there. So would you would you rather see Asian demand increase so that a lot more of the feedstock can be used locally or would you actually go, okay, we need a global understanding rather than a more regional understanding of what is eligible to be used as SAF and where we can get the most carbon emissions reductions from?
SPEAKER_01Yeah so the way I looked at it like as I said we're feedstock agnostic we are we are guided by demand centers and customers requirements. The way we look at things is how do we build an infrastructure that can enable all of these whether acceptable or not acceptable materials to flow towards energy streams instead of it running the possibility of going back to the food streams, right? And then matching thoughts in each particular market center or demand center because I am fairly confident that we will see different requirements start to come to the fore as energy security and independence become more and more important. We've seen this over the past two decades already and each region will have their own reasons to their mandates or to their flexibility but the but I think the fundamental is that material available at scale with it with the traceability information so that the end consumer can make the decision of what they want to accept and what they don't want to accept. So that's really the way we look at it right we we need to bring to we need to bubble up what's available across this region and then we need to see which material fits the requirements of each country the best so that it can meet their shots as far as possible.
Trust Gaps And Pre-Lift Audits
SPEAKER_00Are the do you think there's enough robustness in the traceability traceability methodologies to convince people in other countries jurisdictions that where feedstock is coming from across different not just UCO but Pome and and other things that actually there is a strong case for it being extremely sustainable and actually having great benefit or do you think there's still a little bit of uneasiness over not I'm not necessarily talking about your traceability infrastructure but just the global staff traceability infrastructure do you think we're quite at the point yet where there's full trust there or is it still being established as it's still finding its feet?
How AI Optimizes Collection Logistics
B2C UCO Collection And Defending The Moat
Returning To Refining With Clear Criteria
Timelines, Risk, And What They Won’t Bet
SPEAKER_01Yeah so I think I mean two facts one is the systems today are voluntary and two to and two is enforcement is extremely low. So given those two realities um it's inevitable that you will have a trust deficit right however the way we look at things is if we can increase visibility in essentially showing what came from where before the material has been shipped, offering the optionality to whoever who's the end user to audit that supply chain, to garner comfort and confidence in that supply chain, even have physical verification of those particular points of origin, and then they lift the cargo once the due diligence has been complete instead of doing it retrospectively which has been what has been happening for the past decade and a half, you then can allay these concerns, right? Because for me adding more layers of complexity to try and solve a problem is not the way right it's really about stripping it down, making it simple and saying hey you know what this thousand tons came from these 350 locations or whatever that is and if you're comfortable with those locations go ahead. So really giving people the optionality because someone might say hey I'm comfortable with this big fast food brand because of their integrity but I'm not comfortable with this type of factories because of whatever given reason they have well then so I don't think it's a one size fit all uh but for each of the end users in particular countries especially um they have a different uh uncertainty or or discomfort uh some more than others which will be unique to them which we will need to solve um in a bespoke manner uh uh case by case by case but really the way that we can ensure that there is no issue is in ensure in is in delivering the the possibility of people being able to audit the supply chain before they lift the cargo instead of after um and immediately um all the problems go away because should someone be comfortable with it then there's no more there's none of these um concerns anymore right yeah are you using AI or considering using AI within your your infrastructure and what do you think the potential of AI can be to streamline and make the supply chain more efficient from a traceability standpoint or do you actually think it's another layer of complexity that doesn't necessarily help solve the problem yeah so in uh in one answer AI is the only way we're going to solve this problem is my opinion right um and the reason for that is um I think there are two again a few components here um number one is that we look um at we we look at traceability as a byproduct right um we need to have as much information as possible to be able to improve business processes and to optimize the business from a financial and from an emissions perspective right I think so that's and if and the more information we have the more efficient the business becomes the more efficient the business becomes the more traceability we have and the more nodes we have to be able to to audit and to sense check um the entire supply chain right um now further than that is today there's there's a big component of AI within our technology stack um and that's the way we manage hundreds of vehicles servicing thousands of locations every day right it's about we it's about being able to predict which point of origin would have how much when and then being able to map out um the logistics planning of which truck goes where what's the kilometers it's going to travel what's the emission factor of that um and how much it's going to yield us and then making those decisions of is that yield good enough for that mission or that trip to be commissioned and then creeping up on efficiency from there. Now given the fact that energy prices are continuing to escalate over the past 15 years we're extremely grateful that we started on this journey early because we've got an extremely high yield of waste oil aggregation per kilometer or per diesel burn um which has really resulted in us um growing organically because we are able to offer the most competitive rates buying these materials from the market because we are highly highly efficient um so yeah uh for us to can to move um I mean we used to grow at double digit percentage uh uh month on month for us to keep up that growth um without AI uh it's not gonna happen right I mean hundreds of thousands of points of origin managing it um manually it's just physically impossible yeah do you think because of the increase in energy costs it's so much harder to establish uh collection infrastructure like you have because actually establishing the network would just be too expensive nowadays for you to for it to be handled vertically and it to integrate it vertically rather than horizontally yeah um I think the the barrier for entry is uh is climbing um however um it's still not uh totally pervasive um but it is higher than it was 20 years ago I think it's number one but there are many ways to rethink um how you achieve the same outcome and that's what keeps us on our toes um every day right um last year we launched a B2C a business to consumer uh app uh for households because we saw that there were multiple different approaches or or multiple different candidates approaching the same sector. Yes in the grand scheme of things it's probably maybe 15-20% of the total UCO available uh but we we are conscious of the fact of somebody else building a moat on their own in a different market segment which then gives them the base to come into the market segment that we have already secured. So instead of resting on our laurels we then reinvented ourselves which we've done numerous times to not just look away but to to create the most competitive solution that we believe the consumers will benefit from leveraging on the infrastructure that we already have out there. So it's really a continuous work in progress um thinking of new and totally different ways to achieve the same outcome um that um as compared to what we've been doing for for yeah better part of one and a half, two decades. Was the plan always to go back into refining on a significantly larger scale once you had the the feedstock infrastructure sorted because that's sort of the next step that you're currently working on with um Bin Ziad International you're partnering with them for a refinery so was that always the plan yeah so as I as I said right in the beginning right we started off with as a as a fuel supplier um producing biodiesel uh you reluctantly left um the refining space um due to to realities of life and and and practical reasons uh but it was always um FedHe's energy was always a business that would go the full uh six yards and own that supply chain right um we today looking back it was a good thing that we didn't do what I now think that um we should have um which is we expand the biodiesel production um it would have uh rendered us obsolete in that area um but um to answer your question yes we the business was started as a as a biofuels production business supplying biodiesel to construction sites um it's a natural next step for us the feedstock business is um extremely tight margin low and tight margin so it only makes sense as the next natural step and now that we have that uh have the feedstock as our foundation um I think um it's an inevitable it's a do you want to explain to those listeners that potentially don't know a bit about your projects what you're looking to try and do on the project side and who the partners you're you're currently working with are and the roles that they're playing in establishing the early stage feasibility yeah so um we we embarked um on on this journey um in about three years ago uh we've taken some time on the pre-development work because we've been very adamant on the project criteria um we didn't want to get back into refining just for the sake of refining uh we knew that we needed to have a project um that was extremely deliberate um and um and and we took our time looking for um the ideal piece of land um because we understood the waste-based feedstock supply chain well and I'll give you an example we need to be in a free trade zone that has got liquid bulk and containers together because that's the structure of the UCO and Bome business right um you see many plants out there that um that have a transshipment hub before the feedstock comes to their refinery uh it works commercially um but you don't have much flexibility on your feedstock um if if that's the the setup right um so we we try to pull all of the um must-have um criteria into the project over the past three years um we've secured the land in Portland in Malaysia um the next critical step was was to um be able was to have an equity partner um and as you um correctly pointed out the Zayek um uh stepped forward into that position last year which has really given us the financial uh strength to be able to undertake such a project um since then um in 2025 we commissioned for the independent feasibility study um which was um uh undertaken by Nexon the outcome of which was extremely promising um we have one of the most feasible greenfield projects around the world given um the the the the the global geographic location it's in given the unfair advantage of captive feedstock that we have developed over the past uh 15-20 years um and since then we have uh embarked on our TFS slash brief feed exercise um where we have appointed tech meep and weason um that's evaluating the top three uh license source uh globally uh moving forward we we are hopeful that that will complete by the middle of the year um and then moving on to FID by Q1 2027 uh before construction starts so that's a that's a high level um uh overview of where we've come from and and where we think we're going that's quite a quick turnaround between getting the independent feasibility study sort of end of last year getting FID in in 2027 and all the other component parts such as pre-feed the feed studies getting all that in place as well as the the financing itself in place that's a very quick turnaround I mean like I said we started on this in 2023 um and the first two years 23 to 25 um was really where a lot of the foundational work um went in right uh uh engaging all the technology providers like we engaging with all of the port authorities so the first two years of um diligent um time uh taken to to really uh cover ground um has um given us um the foundation or the basics um for us to know or have a lot more known um components and and eliminate a lot of the unknown um which has then given us the the visibility and and the vantage point to be able to go um on one step to the next because we have had alignment with investors we've had in less alignment with the local authorities um and um to uh a significant extent um with off takers who are incumbent buyers of our used cooking oil today or of feedstock today right um so I think the first two years where we were really slow and um not much uh public there was not much public attention on it um is the primary contributor um to to give you that impression that wow since 25 you've achieved a lot I mean the reality is 23 to 25 we were we were focused and we were working on this project without many announcements right so although it seems like you're on holiday for two years from 23 to 25 in fact you weren't you were just working very hard in the background yeah I mean for the first two years we were we were fairly uncertain whether this is something that we are going to do right uh and that was really the foundational uh uh time uh where we needed to um establish uh all of the basis of the project we needed to be convinced ourselves um so the first two years was was extremely critical um I would say the heavy lifting happened in the first two years not just from an educational standpoint but from a from a from a capability from a feasibility and from a technical uh ability of the region right not just us um can the region support a project like this um and we were very intentional of not being the first project to be very honest uh because we knew um that we had um the the most critical component of of such a project so we didn't have to be the first we didn't have to be the fastest but we will need to be the most deliberate given the size of our organization and the undertaking um of I mean such a big undertaking right what's the desired capacity of the projects that you're planning when you're hoping to have it constructed and operational by um so uh the design basis today is in and around 300 000 tons uh capacity uh plus minus 20 percent we'll we'll figure that out um once the engineering is completed um we are again as I said we are in no particular rush um to want to to to complete the project um our view is that the project should be uh up and running by 2030 because that's where it's uh where where we believe the world will be truly short um it'll be a net short market should all planned mandates come into play. Um so 27 to 2030 gives us pretty good time we've also got some uh flexibility on on a little bit of delay should we need to um and we're not hesitant of that right I mean for us even if we are 60, 70, 80% convinced or certain we still will not pull the trigger. We want to bring that certainty up as far as we can because the way we look at it is we've got a lot to lose. And what is that right? It's committing to a project that doesn't work which pulls down the feedstock business. So at no circumstance uh will we forgo um the feedstock business and that means for us we need to have a very high level of certainty uh before we really pull the trigger on the project. Having said that um the fact that we do have feedstock the fact that we are positioned well in terms of the Malacca Straits and being in Port Clang already gives us quite a few uh unfair advantages that negate some of that risk but we're not going to be too bullish and and and um hoodwink ourselves.
SPEAKER_00Yeah I suppose one of the challenges with these projects is whenever any projects globally set a timeline it's proven very hard to to meet because everyone talks about the known unknowns in a project things that crop up during development but there's also the the probably more challenging aspects of that is the unknown unknowns the things that you don't expect to appear and that end up causing big headaches further down the line.
SPEAKER_01So and one of the other natures is you set timelines in these projects but they're very contingent on it being sort of a one-step process you meet that criteria then you go on to the next step and then you go on to the next step particularly with the non-recourse nature of of financing these days so meeting timelines is very difficult and also managing the expectations around those timelines are are really challenging so are you fully cognizant of those and sort of have have baked that into your timeline or do you think from your position as a very very strongly cemented feedstock supplier with great access to the Straits of Malacca so you can arrange export or transport to whatever country you want to export to and can dial into that feed that supply chain very easily that you might be able to skip over some of those big challenges those unknown unknowns yeah so um I mean there are many things we don't know right uh and and we're not gonna kid ourselves right um we are we are very concerned over uh what we don't know um and not knowing what we don't know right um now that that's the reason we've been taking our time because time tends to bubble these things to the surface right so I think that's why we are in no particular rush um because like I said earlier right yeah we we cannot bet the house on it um when we have already such a formidable position in the field um I think that's that's factor number one and further to that is um for us uh we are brutally honest I mean if you follow me on social media i i have no issues um uh uh uh being the first person to talk about the bad things right the delays the challenges um and and and um uh mismatch in in regulation um i'm that kind of person and i think that brutal honesty always pays off right um we have already had a uh a delay and as you can see i'm i'm i'm speaking about it here here and now with you uh we have no problem with that right because it's not about it's not about being the first it's not about being the biggest It's about doing it right and delivering the solution to the world, not withstanding a third-party judgment. I think that's that's not a that's not a winning formula, right? Also, the other thing is that the way we look at things is we always ask the question of why do we need to do this? Um, so it's not the other way around. It's not that, hey, I want to build a soft plant and I need to backfill the criteria to ensure that the plant can be delivered. For us is the other way. I have the feedstock, what's the best use of it? And everyone, every time there's uncertainty, we are like, okay, if that's the case, why do we need to do it? Now, justify why we need to do it. So I think we're the only project that's right opposite, right? Where we we are not the pushy ones. Everyone in the ecosystem is the one trying to bring the pieces of the puzzle together to support the project, bring the project to fruition, um, so that we are able to fully utilize these waste materials and create uh a decent economic uh stimulation for the countries that we operate within for the feedstop to be aggregated. And thousands of jobs are created that way, right? So um a bit of a different approach, um, but an approach that works for this for this ecosystem.
Financing Strategy And Strategic Partners
SPEAKER_00Yeah. But the challenge around timelines normally comes from being leveraged with lots of outside capital, whether you're sort of going in a sort of just done a series B or a growth round, looking at sort of private equity, where there is a certain cash runway that you need that you've got to actually get your project through FID before that that money runs out effectively. So often there is a point where all projects get to, if you're going through the full project development, looking at getting FID and building a greenfield site, where actually the timeline is dictated by the amount of cash you've got rather than the timeline, the pre-arranged timeline that you've got as a project as a project developer to scale slowly and deliberately. So on that, how are you looking at financing, getting the capital in place to construct and put all the pieces of this project together?
SPEAKER_01Yeah, so I think um we've been we've we've got an existing business that's that's already running, right? Um so that's one key element. Um it reduces or it increases our run rate, um, which uh which uh it's it's one mitigation. Um the second is that we were again very deliberate in looking for a financing partner or an investor that was um that that had a very much more long-term vision, um, and one who has publicly announced that they will underwrite um the investment into the into the project, obviously based on key milestones, um, which we have uh which we have been a little bit ahead of, right? And I think a third element is um is not being too optimistic on your time frames, right? And I mean starting in 2023, saying that the plan will only come up and running in 2030 uh was already um very uh conservative, right? So I think the combination of these three um has put us in a in a better position. It's not easy. Um that possibility of what you described is always there, um, but less so than in any other circumstance. So I think that's one um uh response in terms of the foundation and the setting to where we are. Um the second is that we are um in the process of um um going appointing a financial advisor for us to go out for an equity fundraise um to support the continued development of the project. Um and that um should be opened by July this year with a target to conclude um uh to have a financial close by uh sub by November uh 2026, um, which again is ahead of what we need because um then it gives us, it doesn't put us under pressure um too much, um, and it also enables us to have choices in terms of the partners because we've always thought of things from the perspective of strategic, right? Um we need to have strategic partners more than just uh financial partners.
Algae As Carbon Capture First
SPEAKER_00Yeah. You're also looking at you've mentioned your feedstock agnostic, you've got this project up and running. You're also exploring algae as a feedstock as well, something we haven't actually discussed on the podcast before, and there is there are various companies around the world exploring the potential of algae, and it's a fairly divisive feedstock, like like many there are in the in the staff world, in terms of the effort that goes into harvesting any form of oil from from algae, the effort required versus the products you get from that effort is something that's hotly debated. I've seen it on LinkedIn, you mentioned your social media presence. I've I've seen this debate happening, comments on on your LinkedIn posts around the potential around algae. So tell us a bit, one, uh, why you're looking at algae whilst you've got a million other things to focus on that is drawing your attention, and two, why you think algae is something worth exploring in the first place.
SPEAKER_01Yeah, so I think business principle, um, and I'll explain it in context to you CO before we go into algae, um, is we never looked at these materials as a feedstock for biofuels. We looked at biofuels as the most uh efficient disposal mechanism uh for these waste oils, right? So really bottom-up instead of top-down. Um and when you look at things that way, then it becomes very logical as to why you're doing what you're doing, right? Now I bring that to LG. Um we only we only got involved in this project because there's a high desire from the counterparty um to negate emissions with their LG. That's their priority, right? Absorbing CO2 with the Lgay strains that they've identified, and that's been working. Now, the logic there then is um the bills off the algae or the cost of the Lga is being covered not by the oil yield, but by the efficiency of the CO2 it absorbs. And given where we are in this part of the world, there's a boom for green electricity because of data centers, right? So there's more and more coal-fired power plants or gas-fired power plants that are coming online, and their fastest fix for emissions reduction, given their life cycle of these plants, uh, is to feed that CO2 into something that just loves it, right? So even if there's a low yield, the entire burden of commercial viability is not on SAF, it's not on biofuels. And again, because we have the logic of looking at biofuels as a disposal mechanism for these materials, um, it tend to, I mean, it look it looks very viable from that vantage point. Um, and that's what's accelerating our interest, right? We are, I always say this, we are glorified rubbish collectors with a very fancy way to dispose the material that you uh don't need anymore, um, that results in a fuel that's just cleaner. Um we didn't start with that in mind.
SPEAKER_00Yeah. I mean, rubbish collectors in general are fairly glorified because I don't know about elsewhere in the world, but certainly in the UK, they're constantly going on strike and getting pay rises. So doing quite well for themselves.
SPEAKER_01Yeah, that's not the way I meant it, but yeah, you're right. We see no strikes here. Strikes on strike not always.
Malaysia’s Path Toward A SAF Hub
SPEAKER_00Yeah, yeah, I'm not saying you should go on strike constantly because you'd be striking against yourself. Yeah, productive. So maybe to finish, let's let's zoom out a bit. So we've spoken a lot about Fat Hope's energy and what you guys are doing, and you've got a load of exciting stuff going on, which is great to see. So maybe let's look at Malaysia as a as a country and how it's developing as a SAF hub because it's got a lot going for it in terms of being a really strong proponent of the sustainable aviation fuel and playing a really important role in the global supply chain. So having seen it develop and been at the forefront of developing it in Malaysia, how have you seen the wider market develop in Malaysia for sustainable aviation fuel?
SPEAKER_01So I think uh Malaysia has moved really um over the years. It's again we have started talking about it very early, right? Uh Malaysia was one of the early adopters of biodiesel, right? To 2002, if I'm not wrong, were the first pilot plants. Um that's 25 years ago, right? Uh so Malaysia has moved from awareness to intent um and now really towards execution. If you ask me, sitting here in the middle of everything, we've taken we've taken too long, right? But from a distance, it looks like we've we've we've accelerated in the past four or five years, right? Um and this is driven mainly due to the fact that we have strong fundamentals, as you mentioned, right? Uh a strategic location, access to regional feedstock, um, and establish oleochemical expertise uh across the value chain and growing policy support. So, really, policy support uh is due to the fact that we've already had these advantages. It's it's maximizing what we have, not so much instigating a new industry, right? Um so compared to the region, Malaysia is uniquely positioned that way. Um plus um as an economy, we are an import-export uh nation. We're a small population, a lot of natural resources, um, extremely connected to the world and um relatively developed in terms of technological evolution, right? Um that's put us in a in a pretty good look in a pretty good position, which, if you ask me, um has happened not by fluke, uh, but but by coincidence, right? So periphery, we're very strong in oil and gas, we're very strong in palm oil, we've got great expertise from these two sectors. I mean, the convergence is it's biofuels, it's right in between, right? So if you build these two circles out, um it's quite uh organic that you see them pulling to the center and creating the third circle uh in between them, right? Um and um we've got um we've got a policy framework that's very stable. Um Malaysia is not foreign to uh being very inclusive and and being very pro-exports. Uh we've got a stable currency. So uh fundamentals are strong. Um, and on top of strong fundamentals, you see a big interest to want to decarbonize um not just nationally, but be an enabler to the world decarbonizing.
SPEAKER_00Yeah. Is it still a decarbonization conversation? Because in a lot of countries across the rest of the world, there's been a very noticeable shift into energy security rather than decarbonization. So is is that a shift that's happening in Malaysia as well, or is it still staying on the decarbonization angle?
SPEAKER_01So the nation launched um the national energy transformation growth map two years ago. Um, and that's really been what's underpinning um the transition, right? So, again, which I think is really good, is the the energy security conversation is a byproduct of uh economic policy that's driving the economy towards decarbonization. Um has the lingo changed? Yes, for sure, uh, but the policy hasn't, right? Um and again, I think I always say this um your desired outcome needs to be the byproduct because if you're not economically, socially, and environmentally stable and find that equilibrium, um the certainty of delivering that outcome becomes a big question mark, right? You don't want it to work while economic certainty is there and then stop working when there isn't. And we've got many examples where we've got this wrong, where it was driven by policy, and then when the economic situation was not in its favor, it had to halt. So I think um uh approaching it from uh from a from a uh a sense of or from a perspective of fundamentals is key, um which gives investors and potential project developers like ourselves uh a long-term view instead of it being an opportunistic uh uh exploitation or a strike.
Building Resilience In An Uncertain Market
SPEAKER_00Do you think players across the ecosystem, across the value chain and sustainable aviation fuel are comfortable enough working in uncertainty? Because I think one thing that certainly over the last year has become certain is that there is no certainty. Everything's uncertain, everything can change. It's we're in such a fast-moving world from a policy point of view, there can be geopolitical events that can have a huge shock waves across the world that no matter what policy you put in place domestically as a country, external global events can always shake that up. So is there enough resilience to uncertainty in in the industry? Or can the industry actually develop more uncertainty resiliency? Or is there actually is it too nascent to actually be able to do that?
SPEAKER_01Yeah, I think it's it's still quite nascent, but I see um uh the initial steps um in accepting the reality of uncertainty, right? Um I think there's one thing over the past 12, 18 months that people have grown to accept, which is there is going to be uncertainty. And if you see, if you look at it today versus what it was 12 months ago, um people uh many of the market participants or project developers um are keeping optionalities, right? Whether it's optionality for the refinery to be flexible enough to move between SAF and HVO, whether it is for us to have a diversified portfolio of feed material, um, the same thing that you see for us or the project developers in this sector, uh you are also seeing with airlines, right? With the consumers. Um, they are today open to uh diversification, not so much because of decarbonization, but for stability and to be able to tap into particular markets to call on more volume or when it's needed. So I think as we go, um the diversity and diversification is going to become the name of the game. And I think um the fact that the era um of um consistently cheap energy source um is as that's going to dwindle out and phase out, um, we um see the reality of um consumers having a bigger portfolio of energy uh uh requirements. Um and in the aviation sector, you don't have that many options. So um all of them will need to be exploited for them to have or for them to reduce uncertainty.
The Big Three: Feedstock, Infrastructure, Integrity
SPEAKER_00And one final question, because we are running rather long at this point, it's been a great, it's been a great chat. So just to finish on both from your perspective, from what you've done, and also maybe from a slightly more macro perspective, what are the challenges that are potentially being that you underestimated that you've dealt with so far? And then also from an industry macro perspective, what's the challenge that you think the industry is currently underestimating and needs to put more effort and work to resolve?
SPEAKER_01Yeah, so I mean, this is one question I thought deep and hard about, right? Um, and and I think the three things it's it's feedstock, um, it's infrastructure, and it's integrity, right? I think those are the three. Um, and I think I don't need to go any further on feedstock. We've spoken quite extensively about that already. Um the infrastructure is SAF, it's not just about refineries, right? There's so many more components to make SAF, uh to make um SAF delivered to the wing, uh, which cannot be undertaken by project developers like ourselves. Um and that needs to be, that needs the other players need to come in uh to solve or to meet that need. Um and integrity, right? So integrity really, not just on feedstock integrity, uh, but integrity from a reporting basis from the end users, from consumers. Because for me, what I think is very important is I saw the boom and bust cycle of voluntary demand of biodiesel and then HVO. And I think that's something that we need to defend at all costs in the SARF industry. The voluntary demand cannot be exploited, the voluntary demand cannot be taken for granted. The voluntary demand, in my opinion, is the leading indicator for SAF adoption globally, right? So integrity on all aspects of the supply chain, including the last mile, uh, is critical so that you don't lose trust from the voluntary demand.
SPEAKER_00Yeah. Yeah. And it's the infrastructure piece that's something that's definitely come up a lot more over the last week. And the word ecosystem has been used a lot more over the last year. It's become an effort, and there's a sort of a global industry effort to realize that the collaboration is wholly needed. And if you're not going to succeed unless you're willing to work collaboratively with an abundance of partners, whether it's from the financing, we've seen some financing happen in Europe, and the lists of finances and banks involved are as long as your arms. So there's a lot of collaboration needed there in order to close financing. From the technology side, there's a whole host of technology partners at different areas of the refining process. So there's a lot of partnership required there, the feedstock side, the demand side, as well as project developers themselves. So that conversation has really, I've seen really develop over the last year and can only lead to good things in the acceleration of execution of projects.
Collaboration Invite And Closing
SPEAKER_01Yeah, I mean, uh, there's no other way. Uh uh one party ain't going. There's no that's there isn't a single party that can undertake this. Um and that's because and I think that's the main reason is because this supply chain and this um ecosystem, if you will, transcends many sectors, right? Yeah, um, you're you're trying to bridge um a waste collector at one end and an airline at the other with an oil and gas major in between an airport and global shipping. I mean, come on. There's no other industry that's or that that has such a high level of complexity, right? That's I think factor number one. Factor number two is that the aviation sector is one of the most regulated industries in the world, right? With safety sky high. Um, so trying to make the entire uh supply chain and ecosystem comply to that um is not going to work. So compromises need to be made, partnerships need to be formed so that we are able to do what um each party will need to compromise and do more than the other or less than the other, where you are good at um from a from a perspective of capability and scope. Uh but I think uh uh uh uh really the the collaboration is an inevitability. And for us, we are open um to as many partners as possible from uh a mirage of different areas. Um, as long as there isn't overlap and we're all um fully capable to do what we do. FatHopes Energy on their own really wants to stay focused on the feedstock aggregation piece. Um and we're open to any and all collaborations.
SPEAKER_00Well, there you go. Any potential collaborators interested in partnering with FatHopes Energy and Vinesh, get in touch, and I'm sure we'd love to love to hear from you. Vinesh, that was a fascinating conversation. Great to hear about what you guys have got going on all on all different sides of the equation. And thanks for being so generous with your time.
SPEAKER_01Not at all. Thanks a lot, Oscar. It was really good.