Hydrocarbon Engineering: The accident that revolutionised (SAF) brewing

This week Khaled, Ramon and Miguel of Hydrocarbon Engineering join Oscar on The SAF Podcast to tell the story behind their accidental discovery: a reactor built to  produce bio-oil that, instead, yielded a diesel-like hydrocarbon in a single step. 

Years of reverse engineering later, the Valencia-based team has turned that anomaly into a feedstock-agnostic, single-stage hydrothermal process for producing SAF, renewable diesel and other hydrocarbons — one that removes the need for a separate hydrogen source entirely. 

They discuss the ambiguity of self-assessed TRLs, early interest from British Airways/Iberia, a build-and-license commercialisation strategy, and their target of bringing SAF production costs down to around $1,500 per tonne, against today's $6,000–$9,000 range, as they push from TRL 6 towards a first commercial plant at a biomethane site.

Transcript

Welcome And Guest Introductions

SPEAKER_02 0:08

Hello, and welcome to another episode of the SAF podcast. And this week I'm excited to be joined by Khaled, Ramon, and Miguel from Hydrocarbon Engineering. And we're going to be getting deep into their new SAF production pathway that they are working on, and an array of other topics as well as is the style of this podcast.

Founders’ Backgrounds And Origins

SPEAKER_02 0:38

So, first off, we're going to get into some backgrounds as we usually do. So I'll take it one by one. So we'll start with you, Khaled. Do you want to give everyone some background to you before hydrocarbon engineering? And then we'll get into that a bit later.

SPEAKER_01 0:59

Yeah, of course. Thanks for having us on, Oscar. Really appreciate your time and um SAP podcast team to get us on board. So I really appreciate everything you're doing for us. My background um started, let's not too far back, otherwise we'll be here ages, but um uh worldwide emissions reduction, which is a pyrolysis and gasification systems, which um uh took waste and generated power through um a closed loop steam turbine. And we did a couple of those projects in the Middle East. Uh, the most notable one was one in the palm, which is a pyrolysis and gasification systems, uh, which took all the construction waste from the palm, and then that generated power to the offices and back-end teams at the tip of the palm while they were building that beautiful hotel and residential resorts and apartment complexes and lovely villas around there. Um, and then moved to Qatar to do the same for about four years, which is where I met the wonderful Miguel um across a bar, and we got chatting about um different types of engineering and and things like that, and it all got very boring for our prospective girlfriends and wives at the time, but we kept it going.

SPEAKER_02 2:05

Yeah, so so you and Miguel obviously survived that bar trip. Did the girlfriends and wives survive as well?

SPEAKER_04 2:12

Absolutely. Actually, it's only I want that thing you have, it's very sexy, meaning the technology, the technology I was talking about. So um, and then I'll step in, then I'll give you some background about myself. Thank you for this opportunity, Oscar. Um, well, uh, when I met Hallett, I was already working almost 20 years as uh industrial engineer, mechanical engineering, critical to life safety facilities for large corporations. And uh at the time I was uh setting up a business uh together with uh Ramon uh to develop a new way to uh understanding the immersed experiences in buildings, nothing to do with energy. Um, but uh well uh the business uh didn't go as expected, uh but we forged a very good relationship, uh professional, personal. And at some point, um Ramon revealed that he was working on something, something a new way to energy. And given my engineering background, I understood what was the potential. And uh in 2018, I became the first investor in the company and partner. I've been working with uh the team since uh 2018. And um my role right now is uh connecting the results of the final stages of the development in the laboratory uh to commercially scalable you know uh products and you know that could be bankable. Because uh the gap right now uh for us is uh going from this stage to commercial and uh becoming a bankable business.

SPEAKER_02 3:50

Yeah. And last but by no means least, we're gonna come on to you, Ramon. Do you want to explain your background to everyone yesterday?

SPEAKER_00 4:03

My name is Romon Andreu. Uh I am uh one of the two folders uh initially in the carbon engineering. I have worked in Greenfield since uh 2004, so I know what uh worked in the carbonization. I can see a lot of technologies that starts in 2000 and uh closed in 2010 and uh restart in 2015. Then uh I detected that the solution that we have is affordable, it's simple to adopt, and uh kind of speeds up the energy transition. And it's for that we push a lot in that uh in that project. Uh now with the uh Ricardo that is the chemical engineering and my first partner, but now with uh Miguel and uh Haled that uh the team is uh with with another another another uh uh man is is Omar, the the the the Haled brother is a very very good team to push that project.

The Accidental Diesel-Like Discovery

SPEAKER_02 5:10

Let's get into hydrocarbon engineering. One how did it come about, and just explain what the the thesis behind the company is. Who wants to who wants to take that one?

SPEAKER_04 5:26

The story begins with an incidental discovery on a plant that was designed to produce uh bio oil for a biorefinery, which is the first stage of the bio refinery. The second one is the hydrogenation process so that you can get a bio crude that could be distillated. In this bio oil production unit, something initial was experienced and um it was reverse-engineered. And the reason hydrocarbon engineering as a company has been founded with this name is because uh the product that we can produce with this technology is a hydrocarbon-based fuel uh from multiple feedstocks. So everything started with an incidental discovery. I I can delve into that uh later. I will let uh Hallet continue because he always says that I talk too much technical.

SPEAKER_02 6:19

But when you say an accidental discovery, this is when you say accident and incidental discovery, it was we're talking about an explosion, right? Something went bang at some point.

SPEAKER_04 6:29

No, it's uh much more amusing than that.

SPEAKER_02 6:32

An explosion and you get more amusing than something accidentally going bang, like that's like top tear.

SPEAKER_04 6:39

Well, um the reactor produces uh should be producing uh what's the name? It's it's like an asphalt, okay? A very dense, high viscosity product that causes a lot of trouble with piping if uh cool down blocks everything. But instead of that, uh we obtained samples of uh a mixture of water and uh very light oil floating on top of it. And uh it was taken into a laboratory for analysis, and uh we found out that it was uh the composition was very similar to a diesel. All of the biomass had been transformed into linear hydrocarbons, more than 95% of the mass in all tests were run, the same uh effect, and uh no aromatics, uh, the nitrogen and the oxygen levels have been depleted. Um, there was no explanation possible. Actually, it it was an impossible thing. So uh the next step for us was uh what has happened here? It was supposed to produce a very sticky thing, and we have something we could put in a in a diesel tank and run an engine. And it is so uh our chemical engineer and partner, Ricardo, took a few years, I say years, underlined that, to believe that uh we were able to produce something that today the technology is only able to partially achieve with multiple catalysts from multiple proprietaries, uh that they are not able to fully drive all the reactions to end. And on top of that, you need a separate source of hydrogen. Uh, whether it is green hydrogen or not, that's a different thing, just a separate unit. You hydrogenate that into a separate unit, and then you get a biocrude that you can distillate. But none of that was happening. So we had something that in a single stage had produced the final, almost the final product, totally unintended, totally unplanned. So, yeah, for for an engineer knowing chemistry and engineering, uh, mechanical engineering was like a puzzle. It took us five to six years to put the pieces of the puzzle together.

SPEAKER_02 8:53

It took you five, six years to work out how this accident happened. That's amazing.

SPEAKER_04 8:59

Because the the because the variables involved in the process uh had not been documented ever. There was no literature, uh, only partial investigation had been conducted on other areas, uh, so we had to infer a lot of things. And on top of that, uh the key thing is where is the hydrogen coming from? Because in order to synthetize a hydrocarbon from biomass, you need approximately 100 grams of hydrogen per kg of product. And uh we were not having that part in the process that was the second unit that was not designed by us. So um we concluded the only source of hydrogen uh was the moisture water contents of the biomass that was processed. Then we concluded we have a way, we had the means to transfer hydrogen from the water content in the more in the biomass to the hydrocarbon chains and open them. And that's that's a revolution.

SPEAKER_01 10:00

So so this is where we kind of start as hydrocarbon uh engineering really is now a clean fuel technology company and it's delivering a new route to sustainable aviation fuel. That's where our focus is now. And it's not just uh uh SAT, but we could also do renewable diesels or other refinery hydrocarbons. Um one thing that um we're very proud of is in 2018 we won an EU Life Grant award. So we know we have a strong technical foundation, you know, the the math and the technology and the science behind it is all solid and workable, it's understood. Um the core idea now is to make sustainable uh fuel production simpler, less energy intensive, scalable, and convention and more conven many other conventional uh stage routes. So we've completed 23 pilot campaigns. We've uh very proud to have reached TRL 6, and we're now moving forwards to all that knowledge we've gained in seven to ten years um to a certification and industrial commercialization and deploy our commercial plant. So that kind of is uh is is 10 years of hydrocarbon

Why This Pathway Is Different

SPEAKER_01 11:10

engineering.

SPEAKER_02 11:11

Yeah. And what there is a lot of new technologies being developed across the world in renewable fuels, whether it's SAF or renewable diesel? What is the the unique uh USP of the hydrocarbon engineering uh piece specifically? Is it that that single stage accidental discovery that that makes it so efficient and and unique, or are there sort of is there another aspect to it that differentiates you guys from the other developers out there?

SPEAKER_01 11:46

Miguel can speak very very well to this, but uh the only thing I'll say is in USP terms, it's feedstock agnostic.

SPEAKER_04 11:55

Yes, exactly. Uh the plant is able to process any sorts of uh um hydrocarbon contents, okay? Any kind of it, uh meaning that uh we can process all of the uh organic waste that is causing environmental issues in many locations that currently that don't have a viable uh meaning economically feasible, you know, where to be reprocessed. They are disposed, uh the safe as possible, but still uh the area where they are disposed uh becomes you know polluted. We can change that. The current technology to uh transform any organic matter into uh a hydrocarbon fuel is workable only if you need if you achieve a very big scale. Okay, fissure crops and the like, they really need a big scale. The sources of biomass uh available uh are not that big, meaning uh fissure crops implementation in, let's say, biogas plants or into uh breweries to transform all of the uh remains of you know fermenting you know beer. That cannot be done. And um our technology is fit for smaller scale, covering the gap between the existing technology and what is available as a fit stock.

SPEAKER_01 13:18

So so I I guess the main difference is we're trying to say is the um the integration. You know, conventional synthetic fuel routes require several separate stages, um, uh including hydrogen production and carbon conversion, uh whether you do synthesis up and down streams, um our technology, uh combine the chemistry to do a single uh hydrothermal process. So uh you know that's the underlying principle that we have here with AHSS uh or

Pilot Scale Results And TRL Path

SPEAKER_01 13:45

AHS. Yeah.

SPEAKER_02 13:48

And and you mentioned that you're at uh TRL uh six right now. So what um what scale are you currently uh producing and what's the sort of the pathway to get through through, you know, to TRL sort of uh eight nine, you know, get slightly further along. How's how's how's that pathway look? I know it's not an easy, simplistic journey, but it's where you know we need to get to. So how's what's the strategy to continually to de-risk this this pathway further?

SPEAKER_01 14:27

Yeah, good question. Good question, Oscar. Um so we're we're we're continually producing um at a pilot scale. So we've not yet managed to achieve a commercial refinery scale plant. Um that is our hope with getting to TRL7. Um so the the plant as it stands at the moment, it's combined 23 campaigns, and that has allowed to demonstrate a cool reaction, it has allowed us to um optimize the operating conditions um and produce a detailed crude uh uh for analysis. Um we've got encouraging results, such as the energy identification, the nitrogen reduction, and the crude quality. The next stage that um is important and a critical factor is uh demonstrating that uh the conditions of the pilot plant will validate the longer operating periods and the equipment integration, the feed stock and consistent quality of the output that that is that is generated from from a larger scale plant. That that is sort of stuff that we need to take on board and and measure. Would that be around the around the um uh without giving away too much where we are with the production scale at the moment.

SPEAKER_02 15:38

Yeah. Miguel, do you have an anything to add to that?

SPEAKER_04 15:42

Very specific. Uh our current pilot plant uh is able to process uh up to 30 kgs per hour of product. So uh for an 8,000 yeah, round you know, production timing, it's about 240 tons per year, which is uh more than enough for a pilot example.

SPEAKER_02 16:03

Yeah.

What TRL 6 Really Means

SPEAKER_02 16:05

Awesome. And I speak to I've spoken to many investors and producers and technology developers throughout different episodes of this podcast. And one thing that I'm I'm interested in is whether TRL six means the same thing to everyone. So an investor might not necessarily have the same viewpoint of where a project around TRL 6, 7, 5, whatever the TRL level is compared to you know the technology developer. So who do who do you need to convince that your product is at this level? And what are the mechanisms you have of doing that convincingly rather than just saying, you know, we're at TRL 6? You know, how can you go about convincing the people like investors that you need to convince that you are at a certain TRL level?

SPEAKER_01 17:01

That's very easy. We invite them down to um the laboratory in Valencia. Uh, generally they get invited to a very beautiful paya in Sangria, and then afterwards we move into the technology side of things. How many sangria? As many as it takes. But if anyone is interested in visiting us, in fact, um, I think Miguel Ramon can probably speak to this because I I wasn't able to make it that time. The the latest uh lady that came to see us from uh from uh uh be able capital, I think. But yeah, um the the pilot is operational, they are able to come and view it and and and touch it, which is which is great when you're not talking about things that are over the internet and AI and stuff that's generated. So it's a physical uh lab with with with a with an array of uh technicalities. Uh it's a James Bond, uh literally a James Bond lab, I'd say, but please uh uh Miguel or Ramon.

SPEAKER_00 17:55

Okay let me let me tell uh we work uh in uh in engineering uh reverse engineering. Then uh we got the we have got the log and we don't understand uh what happens, but then to uh understand that is the terrain six, seven, five is not the the same that uh another researcher's because we got the product first. We are sure that uh in that product is not all the same product in in the in the in the sample exist uh different products. Then in some products we are TRL5, 6, and other we are we have the TRL 4. But uh this is a I think it is it's an appreciation uh interesting for for understanding what uh what uh is our stage.

SPEAKER_04 18:51

Okay, yeah, uh yeah. I was about to say exactly something like that. Um when reverse engineering uh a plant, um the understanding of TRL is different because uh we are not coming from an idea that is uh tested in a laboratory, then scale up until you reach the pilot stage. On the contrary, we have an industrial scale plant that was designed for something, it behaves differently, and consistently is able to repeat it. And then we already have the plant without all of the previous stages. What TRL is it? We have made a claim that uh based on the experience of talking to investors and other technologists, uh, it's basically an agreement. We will have to agree with the investor what is the understanding of TRL for them and in a common place. We say six because the plant is already industrial, but has not been operated in a relevant industrial environment because once it did not work as expected, of course, we stopped you know uh going ahead with that direction, yeah, and we just took it to our lab. So it must be an agreement. I have learned that views and opinions of everyone always hold truth. Yeah, there's no one truth owner.

SPEAKER_02 20:12

Um and what about because there's one thing, the TRL discussion, and alongside that there's the ASTM

Certification Plans And Refinery Route

SPEAKER_02 20:20

certification certifying the process um requirements? How because I that is is often a cause of frustration for producers looking at developing new technologies at the speed and the the yeah, the the speed that that hat that process takes place. So how have you guys found actually certifying? Have you guys started going through that process or is it something you're looking to do in the future? Where are you at with certifying the pathway? Okay, perfect.

SPEAKER_04 20:55

Uh the certification process has uh has to happen once uh we uh finish clarifying the TL status. We will need uh renowned, you know, uh certifying body or agency to carry out the process. It may take some years to complete. In the meantime, in order to achieve the market uh or rich market, um we had a visit to our laboratory. They came together with uh an owner of refineries that um concluded that the fastest pathway was that we will be producing the crude, the synthetic crude, and they will be adjusting it and distillating it in their own facilities so that they certify their own production.

SPEAKER_02 21:40

Right.

SPEAKER_04 21:41

That's the safest pathway because uh the way they procure uh fuels needs to come from a source like you know, and a very big refinery because of the size and characteristics of the deals and agreements they make.

SPEAKER_01 21:57

Yeah. Yeah, so so again it's um the the credibility comes from you know what's already been proven, uh equipory about what needs to be demonstrated. So it's you know the same thing in the UK when you speak to um the end users is that all fuel has to come legally from a single source refinery or a or a source that they recognize for their insurance and safety measures. So that these are all steps that, yes, of course, it's uh incredibly rigorous and it's entirely appropriate for all you know uh the avianation industry, absolutely, and it should be.

SPEAKER_02 22:32

Yeah. And none of none of this is in any way cheap. So I wish it was, um, particularly the amount of sangrier you have to buy for investors that come look at your project. That that can't be cheap either and payella, of course. So yeah, of course. So so how's you know,

Funding Strategy And The TRL Gap

SPEAKER_02 22:55

how have you funded it? How of you mentioned you got the um a grant for for this as well, so you've won that award. So, you know, how's how's the funding and the capital raising been thus far, and what's the the capital raising strategy going forward?

SPEAKER_01 23:15

Um so uh apart from the uh EU lifebrunt award back in 2018, which allowed us um 700,000 euros worth of uh physical assets and investments, and we've we've moved along with our own resources. Um we've had uh a couple of private investors in addition come onto that. Um but the problem the the most important thing for us is to look at the grants available, the private equity that's available, and how we're going to continue moving forward, whether it's debt or equity of the company that we we need to you know give away effectively. Um these are all questions at the moment. It's very interesting that in the UK, as we move towards financing, the government has actively taken a massive stake in the in the SAF and SAF development um in terms of the CRM agreement that they've recently uh announced as well. So there's a lot of opportunities out there, um, and they're certainly backed by government um aligned uh ideas. Yeah.

SPEAKER_02 24:19

And do you have any you know preference in terms of your capital raising going into the future? Are you thinking, okay, we'll get a bit of strategic um VC equity in at some point to bring a strategic thing, or are you looking at okay, we might need to go to sort of um some pure play financial growth funding, or looking more debt just sort of debt side later? You know, is that something you're you you're cognizant of, or are you very much sort of open to you know whatever opportunities present themselves you're going to thoroughly review and then go from there?

SPEAKER_01 25:04

It's it's an interesting uh area where we are now. So we found, and even if you speak to uh grants like the UKRI or Pathfinder, there's a lot of opportunities for um ideas in TRL 1 or software or um anything over the internet, yeah. Um then there's a bit of a lull in the TRL's four to six area. So whether you know that is through uh whether they expect that these ideas to be picked up commercially later, or they expect that the jump from uh these stages to commercial is a small one, we don't know. But there certainly is a stop gap between that that stage. And then obviously when you get to TRL 7, well you're commercially viable, then it's not it's not uh a push, it's more of an ask for them to come in and actually fund you. So it's more or less um commercial uh stages which were LinkedIn. So the near-tone funding is intended to support the final validation, certification, engineering, and development of the first commercial plan. Yeah, we would look to strategic investors. These would be obviously venture capitalists in the aviation industry who understand the massive opportunity that is come in from the airlines, uh from the government, from sustainable aviation groups, yeah, uh, and security of supply for the UK. Yeah, the UK imports nine million tons of jet fuel annually. Yeah. Um if there's anyone I'd like to listen to, it's Michael O'Leary from Ryanair. You know, when he when he starts to talk about jet fuel, I think he's brilliant. Yeah um so we're looking at uh uh blended finance structure that that includes strategic equity, you know, government grants, innovation finance, and partnerships at the moment. We we wouldn't say we're allowed to anyone, but definitely um there there are opportunities out there.

SPEAKER_02 26:58

Are you are you guys looking at pursuing a build-on-operate model

Licensing Model Plus Owned Plants

SPEAKER_02 27:05

of having your own refinery, or are you looking at developing this technology and then licensing it to others? Because they've got very different capital requirements and and structures in terms of one, the licensing model is a lot leaner comparative to the capital intensity of developing your own project. So so what do you guys have a have any preference on that?

SPEAKER_01 27:32

Licensing, uh Miguel All right.

SPEAKER_04 27:38

It's uh going to be a licensing model plus uh our own plants, uh depending on the client, where we will uh aim to replace uh the source of fuel uh or the source of oil for all the you know current you know industry so that uh refineries instead of uh getting oil from the ground, yeah, will get oil from one of our plants, and then the process continues as it is right now, right now. Because let's not forget that the issue here is that the humanity, humankind, is uh changing the balance, and the unbalance is uh taking resources from the ground, using them, and then dumping the result of that utilization into the environment. So we think that what the dinosaurs did for us is dumping a lot of CO2 underground, no need to collecting it and injecting it underground. We can reprocess all of the biomass and CO2 into fuels and keep the industry going, but without the need of a brilliant more wells, yeah.

SPEAKER_02 28:53

Um so in the process so far, what's been the most challenging aspect apart from spending five years trying to work out what what what the hell happened at the beginning?

Biggest Challenges Building Credibility

SPEAKER_02 29:10

Um that was that's again what's what's been the chat what's been the challenging aspects for each of you along this journey with with hydrocarbon engineering so far.

SPEAKER_04 29:23

I would say um patience at the same time being patient, um trying to accept that uh what changes the statue queue is actually happening in front of you. And uh the most difficult one is having the guts, I would say, of asking professionals and investors and evaluators look, I took five years to understand this, but I'm going to ask you in one minute or two minutes of explanation that you believe this with this piecemeal of information.

SPEAKER_02 30:00

Yeah.

SPEAKER_04 30:01

And uh to my surprise, there's a lot of good, smart people with an open mind and an open heart, willing to take, you know, um a chance on, you know, uncharted territory traveling there.

SPEAKER_03 30:18

Yeah.

SPEAKER_04 30:18

But it it really requires uh, you know, um a huge you know mind change to understand that what uh we are achieving is uh fundamentally different. What is being done by the industry is basically changing the state of Q.

SPEAKER_02 30:35

I mean, if if I were you, I'd sp I'd every time just recount the story of Alexander Fleming discovering penicillin. Because that's arguably the other the most famous accidental discovery in history. So I just keep saying, look, look at the look at what penicillin's done for the world. We could do the same thing with our accidental discovery. So it's yeah.

SPEAKER_01 30:57

Challenging established assumptions about how synthetic fuel should be produced is is yeah, is is a problem in the inflation, yeah, a good story around that. Um, so that again, that's what we uh are trying to do is basically turn a complex scientific concept into a repeatable continuous process. But again, you're you're you are challenging those established assumptions about synthetic fuels. Um I think the real achievement has not only has just been a good result in learning from those 23 campaigns. So each time we've done a campaign, those campaigns have sort of um cemented those results as we've moved forward through the system and the and the output becomes more repeatable, controllable, um, and and capable of engineering for scale. That that is something that we're continuously working on.

SPEAKER_03 31:43

Yeah.

SPEAKER_02 31:45

Ramon, have you found anything particularly challenging in this process? Well apart from all of it.

SPEAKER_00 32:00

Uh I try to have information every day uh that happens around the world. And I can so I can see every day many problems, but I think that our technology has the ability to uh to remove or to help uh to remove the CO2 or to help the poor countries to have uh uh uh different system to have energy. Energy that is is not uh uh a pollution energy. And every day uh I see I see this and for me it's it's terrible to not push uh and not go uh ahead uh in a good uh faster that uh we want.

SPEAKER_02 32:50

Yeah. So so what does the the near-term future look like?

Next 24 Months And First Deployment

SPEAKER_02 32:57

Next 12, 24 months, what are the the goals that you guys are trying to achieve hydrocarbon engineering?

SPEAKER_00 33:06

Well, if if we find the the the investor, uh the the investor in the next uh two months, uh two of months, we want to uh have the confirmation uh if uh our technology uh works like uh we want better than than we uh uh uh uh uh we had the in the past and uh make make the the patterns and make the certification and put the first commercial plant in uh in a biomethane uh plant because this uh it's very interesting that uh before we we talk about scalability of the of the technology. Yes, we can make a big scale, but now it's very interesting the little scale to take advantage about the biomethane plants because that biomethane plants have both uh gas. For one hand, uh biomethane, but in other hand we have CO2, biogenic CO2 in small quantities. But that small quantities for us is a very is a very big uh uh raw material. And this is this this is the the first uh uh way that we want to use.

SPEAKER_01 34:29

Yeah. But I think that progress from TRL six to seven uh and finish with the period uh that we've technically proven, uh supported a credible certification and commercial deployment in in a package that we're at TRL seven now, that will ultimately open uh a flood of opportunities of how the UK can be uh or and and Europe be SAF dependent independent, so it can actually you know generate its own level of security and resources within the UK and and bring those jobs into the UK and Europe. That's that's the the the main next step, if as it were, in a nutshell.

SPEAKER_02 35:11

Yeah.

Cost Target And No Electrolysis

SPEAKER_02 35:14

And where are you guys at in terms of cost of production? Because what everyone talks about how much that costs compared to jet fuel, and the big challenge is actually bringing down the costs of production. And one of the ways lots of people talk about the you can do this is by being feedstock agnostic and being it flexible in terms of reacting to feedstock market trends to limit costs, and you've got this pretty much single-step technology pro technological process that you use. So presumably you guys are ridiculously cheap, and it's it's like the cheapest SAF you'll ever find.

SPEAKER_04 35:57

Okay, I'll take this one. Um well, I'm going to agree with you because we remove from the equation the need of an external source of hydrogen, meaning, well, uh steamethane reformer is not an option because it's not classified as green. Uh we would uh consider only electrolysis. Hydrogen from electrolysis has a cost, both monetary and energetically. Uh that um remakes the ESAF be priced in the range of 6,000 to 9,000 US per ton. At that price, uh the air companies cannot take it without translating it into the ticket prices. And uh according to the conversations we have had with other airlines, that will mean almost doubling the price of a ticket uh when traveling, in example, from Madrid to London and vice versa. Um that's not a big concern. Uh the concern is that when that happens, the market will shrink. And the current infrastructure of the airlines is not sized for a smaller market.

SPEAKER_02 37:07

No.

SPEAKER_04 37:07

So it it it really becomes a structural problem for them uh that there's a mandate to use SAF. The current technology uh is not able to further reduce the price because electrolysis is very energy demanding. So we remove the electrolysis from the equation. That's the biggest cost-driving thing. Secondly, we can work in smaller scales than fissure crops and still be economically viable. This means all small feedstocks are from in the same, in example, uh biomethane plants or biogas plants that uh around maybe from 1,000 to 2,000 tons, smallest examples we can find, to 25, maybe 30,000 tons, you know, per year of CO2 availability. We can transform that into uh SAF that could be uh used by the airlines. And the logistics of uh placing our plants anywhere, and either in the producing location or in the consuming location, uh also removes the logistics of you know the feedstocks. All of this combines to allow us. Um I want to be generic in the beginning and then I'll be specific. Generically, if we compete with the organic with the fossil fuels versions, okay. We can compete. We could sell at the same price of fossil fuels right now and still make a profit on it. Wow. Our internal our internal uh studies and um business cases are based on the fact that we achieve $1.5 dollars per kg of product cost.

SPEAKER_03 38:59

Yeah, okay.

SPEAKER_04 39:00

And then you have to add overheads, you know, uh the overheads, taxes, whatever. But cost is about $1.5 per kg, meaning $1,500 per ton, which is far away from the six to nine thousand uh that uh is right now available. Yeah, so there's room for adding the overheads, the taxation, and keep the companies having a source of fuel that now is sustainable and does not need to increase the ticket and does not need to negatively impact the market size.

SPEAKER_02 39:33

Yeah, I suppose that is partly that is partly why companies like yourselves developing new technologies are so important because it is these new technological pathways that are really going to be the ones to unlock the cheaper, cost competitive SAF because you've got heifer refineries that are fully de-risked, that have their restrictions on where their costs can be, and other more established technologies have their requirements in terms of energy. So the real cost savings when you think about SAF are going to come from in the long term, new technologies being developed and then coming online and being innovative. So that's why it's really important that we that there is this constant innovation within the production cycle.

SPEAKER_01 40:23

Absolutely exactly right, Oscar. I couldn't have said any better. Um, you know, technological innovation um has to combine sustainability, chemistry, uh, and economics to deliver those solutions. Um that's the way uh I think Miguel made a great point as well about the the the airline industry, it's set up and the infrastructure is fully set up for that uh level of of uh of activity, and you know, any shift negatively towards that impacts a whole number of different um outcomes in terms of the jobs. I think the UK industry has uh 850,000 UK jobs assigned to the airline industry, uh indirectly another million. Uh of course, you know, the any technical innovation has to combine many factors, including the sustainability, but most importantly, economic.

SPEAKER_00 41:17

Oscar, can I make a question to Miguel Angel? Absolutely.

Self-Generated Heat Inside The Reactor

SPEAKER_00 41:23

Miguel, please, can you explain that our energy is not uh electrical energy? Our energy is it's idothermal and is self-generated.

SPEAKER_04 41:34

Okay. Yeah, uh, I miss saying that when you ask what was uh key differentiator factors uh for 102 technologies. Um another reason for our economics, and I missed that part, is um inside the reactor there's uh about 73 uh reactions have been happening in 10 to the power of minus 15 seconds. That's what our research is indicating, so it's very fast. And uh part of them are highly exothermic. They release a lot of heat. Uh, we have experienced that our reactor heating system needs to be disconnected a significant part of the time it's operating because the temperature of the medium is above the thread the set point. That's uh as simple as I can describe it. This means we have to remove a lot of heat from the reactor. The heat is needed for driving the reaction, but if we are producing excess heat and we have to remove it, it means we don't have to procure it. Meaning it's not that our process does not need energy to generate the product or to synthesize the product, it's that the energy is not procured. And that makes a huge difference in uh the cost of the product. That's why our theme is uh $1.5 dollars per kg. Um there's uh room for improvement, but this will happen in in stages as long as we uh roll out in two years' time. That's our ambition. Uh the first commercial plant, we will immediately start working in the improved version for increasing the reactor unit capacity to make it uh a larger module. So from 2,500 tons, that will be the smallest reactor unit. We would like to go to 5,000, scaling up to 10,000, 25,000. These increments will not happen overnight, it will happen at two to three years. Once we completely test one of the uh one generation of plants, we will increase it. And then more scale means better economics and also uh building on the knowledge from the existing plant. Okay, so we will improve the parameters. Yeah.

SPEAKER_02 43:58

So apart from From letting everyone know they've got an open invitation to Pylo and Sangrium or um Valencia. Um what is sort of one message that you want, you know, strategics, investors, other critical industry stakeholders, you know, policymakers or whoever who's involved in this industry that you'd want to really get across to them to help them understand, you know, what you guys are trying to do, or you know, about the industry slightly more widely.

Final Messages And Closing

SPEAKER_02 44:35

Khaled, let's let's come to you first and then maybe we'll we'll go around everyone individually and get everyone's answer. Me first? Yeah, you first. So we'll kick we'll kick off.

SPEAKER_01 44:47

Um, well, um I think what I'd say is uh at the moment the um the A line aviation hasn't got a lack of uh demand for sustainable fuel, it lacks affordable scale and reliable production of staff fuels. Um, you know, the government airlines and um the assumption that they make about the planned capacity that will not automatically become a supply that's ready available in 2030. So they need to engage with uh early technology uh providers um with the most credible projects uh to develop these commercial negotiations. So SAF supply isn't constrained by technology, uh it's the announced capacity. So in the real bonseck, it will be turning these projects um and a lot of projects into into into finance operational facilities. I think that's the message I'd like to leave. Awesome, Miguel.

SPEAKER_02 45:42

Should we come to you next? What's your one message you want to get out there?

SPEAKER_04 45:48

I would say the time is now. Um because um the time to join the team is now, because once we enter into the commercial stage, it becomes a bankable business. That becomes a different approach. Yeah, then sources of funding may come from anywhere. There will be uh plenty of opportunities through regular banking to fund projects, and project finance is uh very well you know known and regulated. The time is now.

SPEAKER_02 46:18

Don't miss the boat, love that. And Ramon, about you, what's your message?

SPEAKER_00 46:23

Uh uh if we if we talk not uh not only in south uh uh fuel, we can produce diesel, we can produce methane. Uh the raw material is CO2. We can decarbonize the planet at a scale uh never never seen before.

SPEAKER_02 46:43

Fantastic. Well, thank you all so much for joining me. Khaled, Roman, Miguel, thanks so much for coming on. It's been fascinating to learn about the the origins and also the potential of the technology you've developed um down in Spain and where you look to scale it continually. It's been it's been brilliant having you on. Thanks so much for giving up your time.

SPEAKER_01 47:10

Thank you. And Oscar, if you're down in Valencia, I hope you'll come down and visit us for that uh Sanguri Empire.

unknown 47:15

Yeah.

SPEAKER_02 47:16

Absolutely. It'll be rude of me not to from down those neck of the woods, the amount we've talked about it.

SPEAKER_01 47:21

Yeah, 100%. Thank you very much for having us. Thank you so much, Oscar.