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
Ryan Jackson, Cielo Waste Solution: Show me the carbon credits
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On this week's episode of The SAF Podcast, Ryan Jackson, CEO, Cielo Waste Solutions joins Oscar to discuss the company's project platform to constructing SAF projects.
Jackson unpacks Cielo's flagship Nahoonai project, developed in partnership with the Lheidi T’enneh First Nation through Tano T’enneh Enterprises — a co-ownership structure he argues de-risks permitting and helps unlock financing through Crown corporations like the Canada Infrastructure Bank.
Alongside the favorable terms this partnership opens up Jackson discusses the project's revenue model and why Canada is in his mind the best place to develop a project, thanks to the stackable federal and state level credits available. This means Cielo can plan to sell their SAF at parity with Jet A1 and then generate the majority of its revenue through these credits.
We finish the episode by evaluating the realistic decarbonisation targets for aviation to achieve as well as the big challenges that the SAF industry is trying to solve.
Welcome And Ryan’s Career Path
SPEAKER_00Hello and welcome to another episode of the SAF podcast, the only dedicated SAF podcast on the internet, probably. I'm delighted this week to be joined by Ryan Jackson from Cielo Waste Solutions. He's coming to us from Canada, and Canada is going to be a large portion of our discussion today, as well as what Ryan and Cielo are working on in the country. So, Ryan, thanks so much for joining us in what is quite early in your morning. It is. Thanks for having me, Oscar. You bet. It's great to have you here. So before we get into all the detail, what we like to do is get to know you a little bit better and understand a bit about your career background and how you ended up where you are today. So do you want to give everyone a flavor of sure?
SPEAKER_01Um, actually, it's funny, the the rather securitous route that I took to the current chair that I'm in was not one that was contemplated by my high school guidance counselor. I can tell you that. Um the I actually grew up in our family business. Uh I was in the automotive sector for I'd I'd say the first third of my career, um, up until about 2003. I was uh working and learning and understanding everything from marketing to finance to inventory control to uh sales to uh human resources and and everything in between. So there was a lot of uh learning that came from my uh earlier part of my career. And everything that I've done in the past has been in the way of either building or structuring new businesses or old businesses and growing them to exits, that kind of thing. So um I came to Cielo actually through uh the investment side of it and and had a board seat up until uh 2022 when um I came on a board in 2021. In 2022, I stepped in on an interim basis to essentially take over the company and steer it in a different direction. Uh, and that's the one direction that we're in today. But uh along the way, had to build uh clean up the balance sheet and and rebuild everything operationally and and directionally. And so, yeah, over 30-year career in business.
SPEAKER_00I'm not an engineer, I'm a business guy. I think we need to get your old guidance counselor to listen to this, and then they can add it to their recommendations of career paths for young people. Yeah, yeah. Cheers to that. So tell us a bit about Cielo, what the company is, what you're trying to do, and the the high-level overview just to explain to everyone. Sure.
SPEAKER_01Um, the best way to describe Cielo today is it's a clean fuels project development company. Um, we develop structure and finance projects, and those projects lead into uh and will lead into long-lasting enduring infrastructure. So the energy infrastructure that we have even today that was built many decades ago uh certainly continues to last, and it's based on um a lot of refining and everything else in the traditional sense. We're creating a clean fuels uh infrastructure play that essentially takes the uh existing technology. We don't sell or we don't invent technology, we essentially identify sites, feedstock, the technology that helps to develop that feedstock, and then offtake and assemble them into a bankable project.
SPEAKER_00And primarily at the moment, you're focused in Canada, and this is your the area where you're gonna attempt this first.
SPEAKER_01We are uh yes, and we're lucky enough to be in what we believe to be to the country and the province that provides the best ROI for uh clean fuel development. Uh so the Canadian landscape we've identified, and we live in and work in Canada, but um even if we didn't, we'd be identifying Canada and British Columbia specifically for starters as the most uh fertile ground for uh the development that we're planning.
SPEAKER_00It's convenient that your chosen location and where you live happens to be in the same country. That's quite a nice coincidence.
SPEAKER_01Uh it's lining up quite
Cielo’s Project Developer Business Model
SPEAKER_01nicely. I agree, Oscar, for sure.
SPEAKER_00So I'm gonna split this into two parts. What's the unique differentiating feature in what you're doing at Cielo? And then I'd be interested to know what the you think the unique differentiating factor is about Canada that makes you think it would be the country you choose it even if you didn't live there.
SPEAKER_01You know, I think what differentiates there's a number of things. So on the Canadian side, I think the differentiating factor is from a policy and regulatory standpoint, Canada is clearly looking at um what we believe to be uh, and and we're gonna go off on a few different uh uh paths here, but from a credit perspective, from a the clean fuels regulations or CFR, from a credit perspective, Canada leads uh from a country standpoint as it relates to uh the CFR rigs that exist today. And those regulations allow for a certain number of dollars per ton of carbon to be recognized, depending again on your carbon intensity score. And so that along with the fact that it's stackable with provincial carbon credits as well, make Canada a very unique player in uh what we'll call the carbon space, which I'll get to how we're um leveraging that here in a little bit. But the other part of this is and the differentiating factor, aside from the carbon and and how we are uh capturing it and and storing it, is that we're technology independent, right? So it's essentially we're not going to be trying to build a pilot plant or anything else. And I spoke about it earlier, but the third-party technology is selected for the best fit based on the biomass that we uh that we're using. So that also looks for a technology provider that is looking for a project. So we create a bit of a um a feeding frenzy, if you will, for the providers of the technology to say, hey, we'll work with you on developing a project because we need one to be able to move our needle on our business as well. So that along with again, the div the biggest differentiating factor is that we have strong partnerships with uh with our Tano Tanae uh enterprises or the Claiteley Tanae Nation. And that along with all of the other factors and the policy tailwinds that exist on the country side and also on the provincial side, drive a huge amount of uh bankability and de-risking uh for the projects that we're creating.
Indigenous Co-Ownership And Local Alignment
SPEAKER_00Yeah, I want to dig into the the First Nation indigenous people aspect. And why is that such a big differentiator? What is significant about that? What's provided by that relationship? Because I'm sure there's a lot of people like me that have no idea about the nuances of why this is why it's a significant partnership.
SPEAKER_01Sure. And so uh the project did stay in the traditional territory of the Claytely Tane Nation. So the um right approach was to start there rather rather than to arrive with a permit application, as you can appreciate. The relationship developed with Tano Tane Enterprises, which is the economic development arm of the nation, and its CEO, Evan Salter, into a strategic partnership framework agreement that the nation uh that we announced in 2026. So the nation approved the project name. Uh Nahunei is uh part of the uh Claiteley-Tanay language, and uh it was their decision to use it. So it wasn't a branding exercise by us. So the indigenous ownership changes the project from consultation to co-ownership and alignment of interest instead of managed risk. So the financiality aspect of it certainly does assist us as well within the crown corporations that we're leveraging as far as bankability and financiability for the project. A lot of what would be considered debt instruments or equity participation by larger capital providers would be a part of it. However, we're able to leverage existing uh crown corporation relationships that get us over the hump, as you will, to allow the project to be financed.
SPEAKER_00And what do you mean by crown corporation relationships?
SPEAKER_01So in Canada, there are crown corporations that are formed by the government to assist in certain financings or certain initiatives that the government wants to see. So you talk about uh regulatory and policy, there's also incentivization, right? So you have certain tax credits, you have certain incentives, but when you want to change a behavior in your market, you incentivize it and you regulate it and you create policy around it. So the third leg of that stool is essentially um the ability to incentivize it. So these crown corporations, one is Canada Infrastructure Bank, for an example, is uh built around their mandate to ensure that certain projects that wouldn't necessarily be bankable uh because they're a first of a kind by combining uh existing technologies. Cielo's project with the nation fits squarely inside of their mandate. And that is an example of the Crown Corporation essentially allowing us to finance this uh through low interest debt, through certain equity wedges and other things before we even get to FID that allow this project to have um an opportunity to be successful.
Policy Stability And Canada’s Carbon System
SPEAKER_00Yeah. And recently Canada has had a change of prime minister, and Mark Carney's now in now in charge of Canada, and he's currently in the news quite a lot, so I'm sure most people are now aware of um who he is, and people in the UK are familiar with him from his time at the Bank of England. How have things changed? How's the the layout? Because he's a big renewables fan, how's it changed since he's come into government? Has there been a change, or is there a change currently happening in terms of galvanizing a renewable industry?
SPEAKER_01I think uh there's been two two things that have changed. So the liberal government has been in power now for the better part of a decade, and in that period of time, there was a significant uh participation or policy change or evolution, if you will, around the renewable sector. So you're talking about um wind and solar power, you're talking about other uh forms of decarbonization of the of the industry. I think um when uh Prime Minister Kearney came into um power, what it did, what he did was provided stability and the ability for us to count on that policy remaining and the regulatory environment to evolve. So before we had a a policy that was under a certain amount of scrutiny from the opposition, um even I would suggest it it wasn't um uh quite frankly, it wasn't profitable to even go and try and and build a plant before. And it still remains that way to a certain degree, other than the way we're treating it through our uh CCS component. But the the stability that uh Prime Minister Kearney has brought to it, uh along with the growth mindset, is is has been for me the uh thing that I've observed the most.
SPEAKER_00Yeah. And one of the my favorite policy comments I've heard, it happens to be from an American, and he said the policy security only comes in four-year cycles. So depending on how elections turn out, there can be big there's the potential for big swings in policies. Is that the case in Canada? You mentioned this has sort of been 10 years of liberal government now. Do you feel that there's a bit more stability than that in the policy making and structure around renewables?
SPEAKER_01I do, and the reason why this is the case is that you're essentially saying now, with all of the investment that has been made into the projects, then and keep in mind that there are still a number of projects that are looking to be moved forward. And you just quite simply can't just write that investment off. At a certain point in time, the the trains left the station, the ships left the harbor, whatever metaphor you want to use. Yeah, but the the policy becomes um what I might suggest is more foundational and creating the new economy. So if you're really looking at, and and I spoke to a colleague earlier on about this, Canada has entered what I believe to be industrialization through decarbonization, which is a mouthful to say. But you know, the uh industrial revolution happened early on in uh when you had Canada building the the factories and everything else, and those those obviously that's evolved. But now I believe what's happened through policy, regulatory, and incentivization is industrialization through decarbonization, and that is the new economy that is emerging, uh partly because of what uh governments have done uh here in Canada, but also around the world. And this is spilled into, and it's a long-winded answer, I apologize, but it's important to get the context around this is there are voluntary markets and there are compliance markets around the carbon um footprints. You see airlines buying staff when they don't have to buy SAF, but they're choosing as good corporate citizens to do that to reduce the carbon footprint of um when they fly. So the basis of that is based on well, uh, if I'm a passenger and I care about my uh carbon footprint, I'm gonna choose an airline that's maybe doing that. That's a marketing piece as well, right? So um, but that's that's really I know it's a long-winded answer to your to your question, but the stability around it has turned into what I believe to be a significant industrial play. And then the byproduct of that is energy security, right? So uh, and that's something that quite frankly we wouldn't have ever guessed needed to happen, but yeah, um, you know, the Strait of Hormuz has taught us differently over the last little while, yeah.
SPEAKER_00Right, yeah. On the the industrialization through decarbonization is probably not the best slogan to go on a a bus, for example, but I think it I think it works in terms of getting a message across. Is
Selling SAF At Jet A Prices
SPEAKER_00do you think we've got to a point where there is a market that's established that's strong enough in order that if we're talking sustainable aviation fuel specifically, that can sort of that market can grow and develop and come down the cost curve and become more prevalent across the globe in Canada and across the globe, or because one of the big conversations is it's too expensive and there's not necessarily the demand there to meet the the supply that's coming.
SPEAKER_01So there's so there's a couple a couple things to to that, Oscar, that I think are important to note. So uh the short answer is yes, um, but the caveat around it is what other alternatives are there? What else if we're going to reduce our carbon footprint, if we're gonna decarbonize SAF, while uh in certain cases is more uh expensive than uh regular uh fossil derived jet fuel. What would be the cost of a infrastructure rebuild for hydrogen um fueled airplanes? And the cost of that is infinitely more than we could ever expect to pay for a few cents extra for some liters of or gallons or whatever barrels of of staff. And keep in mind that in Canada, and specifically for Cielo, we're actually selling our jet uh jet fuel or sustainable aviation fuel at the same cost as Jet A1. We're not looking for a green premium. Our our profit comes from the carbon credit market, and that market is continuing to grow as well. So um the alternative to staff and the cost of it is is nominal based on the fact that we'd be spending trillions. I can't even imagine the number if we had to rebuild all of the aircraft. I mean, imagine the life cycle of an airplane, right? It's 25 years or more. So um that's that's my thesis statement, anyways, is around at what cost. So and we're not replacing all of the jet fuel. 10% of it has a meaningful reduction in our um carbon footprint, any way more than any um any other process would possibly do. And it's a drop-in fuel. We're not re we're not changing anything.
SPEAKER_00Yeah. I want to go into the carbon credit aspect of your business model, and you mentioned there that you're not you're selling it a effectively parity of cost Jet A1 and you're making profits through the carbon market. I'm just wondering the uh accuracy to which you can structure that as a revenue in a business model when there are significant other agreements that need to be in place around feedstock and you know the the efficiency of technology, because we're gonna we're and we'll get to how you make those decisions, but all go into working out what the cost is. So you're putting a lot of reliance on the stability of the carbon markets to make money.
SPEAKER_01We are, and we do, and it's no different than anyone else, depending on what carbon attributes they have in their business model. Um the the reliance on the carbon market is is quite frankly no different than the reliance on what I just mentioned around policy. So you have essentially now both a voluntary and compliance market that's law inside this country. And in certain provinces, it's different than others. So by law, the carbon market exists, and that isn't something that is at the stroke of a pen in Canada, at least, thankfully, yeah, with respect to an executive order. So it's really a lot more um compliance related and stable than any of the policies that are existing. So the policies can change. Laws are our laws. And so our reliance on that and the the math that we've made are still very conservative. We're still taking um on a per ton basis significantly lower numbers in our models than if we were to take today's credit, for example.
SPEAKER_00And presumably this business model means that it's repeatable across Canada because it's provided you know, there's access to feedstock and a relevant feedstock that you can process relatively efficiently, it's repeatable because you're not you're relying on that market that is consistent across the country as opposed to a local demand center in terms of uh an airport. For selling the selling the fuel.
SPEAKER_01Yep, it is. And here's the thing, and I and I think it's important at this point to get to reiterate that we're we're a developer of projects. We're going to see an opportunity, and it might be a different kind of feedstock with a different kind of technology that we are allowing ourselves to avail um our business model for. So it could be any, it could be a renewable diesel uh uh instead of SAF. It could be based on uh an off-take opportunity, or it could be uh another uh type of feedstock that isn't necessarily driven by woody biomass. It might be, we might look at a hefe opportunity if there's one around the feedstock. So you've you've keyed in on one certain thing, and that is this is a feedstock-driven business. We realize how important it is to secure that for a long term, and that's what is really the tip of the spear when we identify any project, is that along with our ability to uh to store uh carbon.
SPEAKER_00Yeah. Are you fairly agnostic in terms of making renewable diesel, making SAF? You you're not, are you is it that important which market the fuel goes into rather than just their availability to generate carbon credits?
SPEAKER_01Uh no. Yeah, yeah, you've picked up on that. And it's it's we can uh produce either uh as it relates to our project in Prince George NBC. And that um quite frankly is a byproduct. It's it accounts for um 25% of our revenue stream, right? So we're really uh it's it's important to generate it because it's still uh you know a significant uh uh portion of our revenue. Yeah but this is this is a carbon story, it's not as much as it is a SAF, and I know your podcast is the SAF uh podcast, but it is really and every every SAF is is really driven as a derivative of of some sort of uh renewable. But our our carbon intensity is is deeply negative as a result of the carbon capture that we're uh that we're we're achieving. And the best part is is that this is all technology that that we just quite frankly license. We're not we didn't we didn't invent it. We're letting other folks do that and commercialize it, and there are plants running all over the world that we're gonna be using the same technology. So the one thing we wanted to de-risk was the technology, and that's what we're doing.
SPEAKER_00Yeah, and on the technology piece, how do you go about making those decisions in terms of the process of which technology license are? Because there's a lot of licenses with varying degrees of processes that work, processes that integrate with others, they work at different scales. Where's the sweet spot? How's that decision-making process done?
SPEAKER_01Well, a lot of it is, and and keep in mind, as I said on the outset, I'm not an engineer, I'm not uh there are a lot smarter people than me that are gonna be uh making those decisions, but they're all rooted, they're all rooted in um ROI for one, and the insurability or financeability or bankability uh of the technology, so that's a critical component, and the amount of feedstock that we're feeding into this thing, right? So certain technologies start to work better in certain volume sizes of the feedstock we're bringing in. So where we might have a certain number of tons of per day of feedstock that's going to be processed at you know, certainty, we then might step up another level and go into a different category of um technology providers if our feedstock increases. So we have to really uh drive it from what we believe to be the uh the feedstock certainty. And then those decisions, there's we've we've got licensors right now that we've shortlisted uh around where we're at in our process. So um, and then on the other side of it, the technology providers have um you know can also make a good business case as it relates to why we would choose them, and it might be something as simple as um you know them being partners in the project as well. And if that's something and and the the technology risk is addressed, that's also a factor. So there's a matrix that that exists that we that we use and it's weighted on certain elements, but um, you know, the number one is uh value, right? So you know, capex versus ROI versus efficiency, all those things come into play. I mean, you get what you paid for, right? Well, and you know that's a good point. You you cheap, quick, and good. You can pick two of the three, right? You can't have all three.
SPEAKER_00So which two, which two are you taking in that triangle? We want it to be good. You're just taking one, you're taking the good corner. Yeah, yeah. So I'm presumably this technology is high level of de-risk. You're looking sort of seven, eight, nine, as opposed to you know, taking any risks on any earlier than that in the technology readiness scale.
SPEAKER_01Yeah, on the TRL side, it's it's definitely um everything that we're looking at is TRL 8 or above. Yeah.
Why SAF Scaling Stalls Globally
SPEAKER_00So moving uh slightly wider, the SAF as an industry is it's trying really hard to scale globally, and it run it's running into a plethora of problems. So I want you just to have your sort of SAF hat on as opposed to your carbon credit or your renewable diesel hat on. So what are what are you where do you see the big problems that are preventing SAF from scaling now as you look at it? Because the way you talk about it, you can go, you make SAF, you sell carbon credits, you can sell it for cheap and make money, and you know, everyone's happy, and the airlines aren't complaining that it's super expensive. So you make it sound really simple, but I'm I'm not gonna say your your life and your business is very easy. So where's the hard bits? What's holding people back?
SPEAKER_01Well, I think uh as it relates to the industry, it's the cost of uh making the SAF is still um driven by the fact that you need a sustainable feedstock to be able to do it. So if you're using a hefe process, um, which for your audience would they would understand what that is, it's it's essentially uh using um use cooking oil, animal fats, canola, soy, uh, those sort of things. And those are food sources, uh, or some of them are food sources. And uh there's a finite amount, quite frankly, of feedstock. So this is technologically um driven mostly by the capacity that that technology has to produce the amount of feedstock that exists. So um I don't believe that it's a matter of replacing uh Jet A1 with sustainable aviation fuel 100%. I don't think that's a realistic goal. Um, what I do believe is if we're going to make a significant impact on decarbonization, um, I think 10% gets us there. And I believe that we have technology that exists today and the enough feedstock to be able to achieve that. So I think it's someone smarter than me has to go and do the math around how much feedstock availability there is, what percentage of that would actually make it to a SAF producer, and by virtue of that, almost reverse engineering come out with what is the appropriate amount of SAF that can be put into the marketplace in the next 20 years.
SPEAKER_00Yeah, so 10% over 20 years is that sort of that's the level you're sort of thinking at? So comparing that to where well UK European mandates lie, they go well and far and truly beyond that level very quickly, and there's other mandates in the world that might scale slightly closer to that level. So, do you think just European and UK mandates are way too you know aggressive in their growth and are mildly unrealistic around where the market can scale to reasonably in the timeline it sets out?
SPEAKER_01Well, I think we have to ask ourselves who came up with the number in the first place. Um I'm assuming it was somebody that thought it was politically expedient to do so, and it wasn't rooted in any sort of uh economic reality. So I believe that certain mandates that are produced by politicians should be kind of taken a little bit with, okay, well, you know, there's there's a difference between a budget and a goal, right? So if if it's the goal to be, you know, we could say today we have a hundred percent, you know, we want to be by 2050 100% uh SAF driven. Well, yeah, no, it's sure, it's it's admirable to have a goal, but let's be realistic. And um I think it really begs the question, and how did you come up with your number? Is the first thing I would say. If if if the EU and uh other parts around uh the world have said, well, we're gonna decarbonize aviation by a certain percent by this this year, how did you arrive at that number? Like, what's it based on? I because the you know, if it's if it's based on some sort of uh fundamental math around feedstock availability, infrastructure development, financeability, technology, none of those would have been reconciled, I guarantee you, when someone in parliament one day decided it was a good idea to introduce a bill with some lofty decarbonization goal. We're gonna get there and we're on our way, but it's it's you know, it's not gonna happen as quickly as some people think. And I'm not being a pessimist, I'm being a realist.
SPEAKER_00I I think I certainly think that mandates have been thought about a lot more in terms of the demand than the supply, in terms of we need to decrease emissions in aviation by this much, therefore we will need this much staff to do it, and that's how the mandates have been set, as opposed to what have we got access to, how much can we produce, and the timescale that we can produce it in. And I I think also to be fair to the people putting mandates, a lot of the the majority of financing conversations come down to conversations around guaranteed revenue, long-term offtake, how you making money. So those two the mandates help with that aspect because it adds an element of security to the on the demand side, which is what you know private what banks and other investors really want to see, certainly if a project's going to go through to FID, and that's what we've seen so far with projects that have got to FID. Right.
SPEAKER_01And a lot of them are exactly as you mentioned, there's the it back to the earlier comment about incentivize it, mandate it, and um regulate it. It's really just um around that. The bankability of all of these projects, and the reason why a lot of um, and not just SAF, but any some other renewable projects, large ones, end up dying uh before they achieve FID is typically around um the offtake or the feedstock, right? The the technology is is there. Um and that's why in our case, selling the SAF at market at rack prices um really doesn't doesn't require us to have an offtake per se. I mean, yes, we obviously are gonna have an offtake, yeah, but our our fuel is gonna be sold into the same market. So um I mean we could we could have an off-take agreement tomorrow because it's at market.
SPEAKER_00Yeah. And so you're you're also talking a lot. We spoke earlier about the the crown corporations in in Canada and working with them. And often these governmental financial institutions are prepared to structure financing and credit in different ways that go beyond uh you know, finding off take. They're more enablers than going to be overly beholden to having these structures in place that private investment does. So does that change your outlook in terms of what you need to have in place for financing as well? You mentioned you're gonna have off take, but it seems like it's just a sort of a thing to have as opposed to a requirement for financing, like others do.
SPEAKER_01Right. Yeah, I think it's in the context of off-take with a green premium, that's important if you need that to make your project bankable, right? So um in our case, that's not the case. In our case, that isn't uh the case. So, but as it relates to any of the other, uh, whether it be a technology uh or another developer or someone that's looking at at doing that, it's important for them to have those things. And I'm not diminishing the fact that off-take needs to exist, it absolutely does, and we uh recognize that it's really around how the industry itself is going to be able to finance these uh transactions. So in Canada, we're looking at essentially this as being our um flagship development, but it's going to then create that model, that platform that we already have to do the next ones that will attract a Brookfield infrastructure or a uh large infrastructure fund to want to uh take down a portion of the or all of the project, right? So it's it's a bit of a um, you know, if it was hard everybody or if it was easy, everybody would do it. But with our first project we have in the in the pipeline, those crown corps that you talk about or that I've talked about are essential to be able to allow this to move forward and allow us to maintain a meaningful ownership stake. We don't want to do this for free. We don't want to do this for a 5% interest, right? We're we're maintaining a um a meaningful ownership stake because we can leverage um the financing that's available to us through the crown corporations.
SPEAKER_00And that there I was thinking you were just doing out of the you know the goodness of your heart, right? Yeah, not for profit. Yeah, we're not for profit. Um so I thought I'd suppose the the off the demand side and the way you're selling it, that's a really replic, we mentioned it earlier, the replicable piece of your business. Because everything on the supply side, in terms of technology, the feedstock, that becomes a whole different enterprise every single project you look to, you know, help develop. So, you know, you you can have the ingredients from this first project, but how how much learning from this can be taken into the next one? And what are the things that actually next time become new, totally new challenges? Are there things that you're prepared to have as totally different challenges next time around?
Replicating Projects And De-Risking Finance
SPEAKER_01Yeah, and that's that's a great question, Oscar. Um and one of the reasons why uh we did a um an acquisition back in April of uh CDL Biofuels, and that company had spent the previous five years doing technoeconomic feasibility uh on other projects, either by way of due diligence for financial organizations or for developers. And all of that data and everything that existed, that platform we brought into Cielo to allow us to take all of those learnings and all of that data and be able to package it, if you will, into a replicable platform that we can take out into uh multiple projects. So this frees Cielo from bottlenecks that others face, right? So technology scale up, feedstock security permitting, social alliance uh license and capital, all of those, if we developed the technology on our own, for example, we wouldn't be able to scale. We're able to go and do multiple shots on goal, if you will, to use a hockey analogy or a football one, I guess, if uh uh if you want to say that um with the same puck or the same ball. So we're able to take this, and I'm not saying it's an easy as easy as copy paste, but we do have a formula, a platform that allows us to uh essentially replicate this as long as the environments that we and I said at the outset that we're looking for um feedstock uh as a tip of the spear. So we find that along with our our carbon storage metrics, we're good.
SPEAKER_00And what about the degree to which studies that you do in turn with around new projects? One of the things I've noticed more and more is when you get further down the line and you get banks doing their own assessments of projects and they take an overall a very pessimistic view because they want to know will it work in the worst case scenario, as opposed to the the best case scenarios? Are you modeling extremely pessimistically to account for you know the pessimism of a bank because you know they've got a fiduciary duty to you know look at these things properly and check it works in all scenarios? So is that something you're you're building in or or you know, should banks just get more optimistic?
SPEAKER_01I don't think banks will ever get optimistic. Uh I don't think it's in their I don't think it's in their DNA. So ask asking them to change their uh the their their risk profiles for for projects such as this, I don't think it's it's got to come the other way. And I think that's I mentioned insurability earlier. And that's why as a developer and not as a technology um provider, as a developer, we select the technology that has that insurability or bankability, and it addresses the um, we'll say the uh efficiencies or the uh what happens if this breaks kind of thing. The the feed stock security is primarily the biggest uh aspect of anything that's that's bankable. Uh so that's where we focus on the technology is important as well, but uh the feedstock security is is paramount to um financing, quite frankly.
SPEAKER_00So you think feedstock as opposed to revenue is more important for financing? Well, feedstock drives the revenue, so yes.
SPEAKER_01Um the revenue out the other side is based entirely on your input. Is this availability or cost of feedstock?
SPEAKER_00Or both?
SPEAKER_01Well, it's both. Yeah, it it's both. You have to find the right uh and the the feedstock, you shouldn't, you know, we're not we're not afraid to to enter a long-term feedstock agreement or partnership for that matter, um, if it's consistent. Back to the cheap, quick, and good. It's you know, if you want cheap feedstock, it it can't be um quick and might not be good, right? So you want to make sure that you have a certain amount of, and we've modeled in certain cost factors, and we continue to work on the cost of those feedstock uh and and other things, but certainly on a cost per ton basis, it's a fraction of what a uh a soy, canola, or uh other type of food source-based feedstock would be.
SPEAKER_00Yeah.
Timeline Toward 2030 And Closing
SPEAKER_00So normally I've sort of asked this early doors, but I've got totally distracted by our wider discussion. So anyone that's still listening at this point, you you've won the prize of finding out the answer to, you know, what's your timeline for the first project and the expected output and just some sort of rough sort of numbers and dates for when this project's going to, or next milestones as well.
SPEAKER_01Yeah, we're in we're in the pre-FID process right now, and there are some certain things that we haven't disclosed publicly as a public uh company that I can't uh mention uh yet without uh a non-disclosure agreement with everybody that's going to be um watching or listening. But we we can get that sorted.
SPEAKER_00We can send one out.
SPEAKER_01What I can what I can tell you is we have publicly stated that our goal is to have an operating facility that's going to be producing revenue um in time for the apex of the British Columbia Low Carbon Fuel Standards mandated staff consumption or blending requirements in 2030. So that's that's the and that is something that we're on track for and that we plan on uh completing. So we have a number of announcements coming. I know teased you with that uh early, but I'm not able to share any of those, even if it was embargoed. But um we will be bringing some uh meaningful news forward in the next in the next little while. We'll be bringing out uh additional news for uh some for your listeners to to chew on.
SPEAKER_00Well, we'll we'll keep an eye out for any and all news coming out in the near or distant future. Ron, it's been great to have you on the podcast. Fascinating to hear about Cielo and your business model and why you think Canada's such a good place to be doing this. So it just remains for me to say thanks so much for joining us for that excellent conversation. Oscar, thanks for having me. It was a pleasure.