The SAF Podcast
The SAF Podcast: FlyORO - The coffee machine of sustainable aviation fuel
This week on The SAF Podcast, Jonathan Yeo, CEO, FlyORO joins Oscar to discuss the operational and supply chain logistic challenges that SAF presents.
One of SAF's many benefits is its drop in nature, and ability to work within existing infrastructure. However, currently it still needs to be blended with kerosene. This is not as simple as someone mixing the two together with a large whisk. As Jonathan explains, the precision required to blend SAF and Kerosene to meet certification standards is significant and the requirement to blend according to market demand requires flexibility not currently found in airport infrastructure.
Jonathan explains that their Alphalite modular system designed to optimise blend efficiencies, making SAF more accessible for both business and commercial aviation. Almost akin to a Nespresso coffee machine (other brands are available), blending the perfect amount of water and coffee. We also look at how a modular solution can deal with the inevitable ramp up in SAF production to service the expected growth in demand.
We then dive into FlyORO's finances and discuss the pre-Series A funding they received earlier this year and plans for further rounds in early 2025. Jonathan also highlights why they are targeting strategic investors and the benefits they bring. The episode ends with their expansion plans in Australia and the US and why they are two markets that are particularly attractive and the role of Book and Claim in helping scale SAF whilst there is a continued paucity of physical molecules.
If you enjoyed this episode, check out our most recent episode with Tom Berg, SkyNRG where we discuss their recent SAF Market Outlook report: https://www.buzzsprout.com/2202964/15275823
Host and Producer: Oscar Henderson, SAF Investor
This week on The SAF Podcast, Jonathan Yeo, CEO, FlyORO joins Oscar to discuss the operational and supply chain logistic challenges that SAF presents.
One of SAF's many benefits is its drop in nature, and ability to work within existing infrastructure. However, currently it still needs to be blended with kerosene. This is not as simple as someone mixing the two together with a large whisk. As Jonathan explains, the precision required to blend SAF and Kerosene to meet certification standards is significant and the requirement to blend according to market demand requires flexibility not currently found in airport infrastructure.
Jonathan explains that their Alphalite modular system designed to optimise blend efficiencies, making SAF more accessible for both business and commercial aviation. Almost akin to a Nespresso coffee machine (other brands are available), blending the perfect amount of water and coffee. We also look at how a modular solution can deal with the inevitable ramp up in SAF production to service the expected growth in demand.
We then dive into FlyORO's finances and discuss the pre-Series A funding they received earlier this year and plans for further rounds in early 2025. Jonathan also highlights why they are targeting strategic investors and the benefits they bring. The episode ends with their expansion plans in Australia and the US and why they are two markets that are particularly attractive and the role of Book and Claim in helping scale SAF whilst there is a continued paucity of physical molecules.
If you enjoyed this episode, check out our most recent episode with Tom Berg, SkyNRG where we discuss their recent SAF Market Outlook report: https://www.buzzsprout.com/2202964/15275823
Host and Producer: Oscar Henderson, SAF Investor
Hello and welcome to the latest episode of the SAF podcast this week. We're delighted to be joined by Jonathan Yu from FlyOro, based in Singapore. Jonathan, how are you based?
Speaker 2:in Singapore, jonathan. How are you? Hey, oscar, thanks for having me Very excited to come onto this podcast today.
Speaker 1:We're delighted to have you. So today we're going to spend a lot of time looking at blending and the SAF supply chain. But before we get into that, do you just want to explain your background before Flyoro?
Speaker 2:Yeah, of course. So I started my earlier years as a chemical engineer and most of my time was actually spent on the other side of things on the upstream oil and gas side and on the specialty chemical side. So through my time for myself, I really enjoyed flying as well. So I love traveling, exploring many new destinations, and I really wanted to bring my engineering knowledge to something that I truly enjoy and eventually that involve into aviation fuel. So today at FlyOro, we spend most of our time innovating and working on sustainable aviation fuel plants to be compatible with existing aircrafts.
Speaker 1:Perfect. So can you explain? You just gave us the very, very broad overview of Flyoro can you explain, sort of you know the origins and where you guys are at today, what you guys are focusing on in terms of your key strategies?
Speaker 2:well, I, I think, first as an introduction, um at an industry level. Um, so right now we are seeing a lot of progress in the energy transitions, uh, and based on what we have seen at the industry level, we have seen a clear goal to decarbonize and that's pretty much adopting SAF plans as the drop-in solution as well, which is basically a blend of either biomass derived or renewables together with your conventional kerosene. So at FlyOro, in fact, how we created that name, um, oral means oil, renewable oil, and in certain language oral also means goal. So we actually set out we want to be that goal standard in providing synergistic plans.
Speaker 2:Um in the future, offline um. So that also means to position ourselves as eventual technical leader as well in self-blending and distribution. So in addition to that, probably a high level on the company perspective. So we have patented a technology that will enable blending at all points of the value chain, including airports, based on our data and automation technology. So kind of think espresso machine. We are pretty much like that that we want to create that flexibility and on-demand model that can happen at your home, can happen at your office, or even at shopping malls, or even at the airport lounge. The only difference is that you can fly with our blends.
Speaker 1:So you're the Nespresso of aviation fuel. Is that what you are now?
Speaker 2:We aspire to be, but of course we probably need to trademark a different name from there.
Speaker 1:So the appeal of SAF is that it's a drop-in fuel that can go into existing engines, existing infrastructure and is blended with kerosene. The limit at the moment is 50%, so there's no new required infrastructure. My understanding of the blending is that there's just um someone with a really big whisk standing at the airport just mixing all the kerosene and saff together, but that's probably not quite the case. Um, why is infrastructure and the supply chain something that needs to be thought about?
Speaker 2:Well, I think we can kind of look at this from two different aspects. First, at the operational level and probably at a broader level as well. When you come to the operational level, the thing with kerosene is that you are dealing with something that's, in fact, layman, really dangerous, really explosive or flammable in nature. So when it comes to handling, it requires lots of precision handling and focusing a lot on the safety and quality aspects. Fundamentally, what we are actually working on is to service across 20,000-plus aircrafts in the world that have already been flying with the current fuselage and the current engines that have already been established. So we need to ensure that the key technical specs are actually met and compatible with existing aircraft, not just to provide that same level of calorific value to power flights, but also that means leveraging as much as we could on existing assets to bring about the best cost economics for fuels. At a broader level, I think there's going to be lots of considerations as well, a lot on the financing perspective. So, firstly, on aircraft, the thing is that we have lots of aircraft that are flying up in the air and, at the same time, we're having OEMs that are actually working very hard to develop flights that can be 100% SAF compatible, so that's going to be a seismic cause as well to renew the entire fleet globally and, as we know, the average lifespan of commercial aircraft can be in the range of 20 or more years. So that also means billions of investments have already been made and we need to ensure, as the staying fleets are pretty much utilised to the maximum capacities and also depreciated throughout their lifespan from a financing perspective. So I would think that this will require a lot of time to actually implement that uh at a high level, and that is something that's not commonly taught in the industry today. The second aspect is regarding operational standpoint um, based on business as usual scenarios and from what has already been invested in existing fewer infrastructure assets, already been invested in existing fewer infrastructure assets, including a pipeline or terminus, etc. So there's actually a sizable amount of number in terms of terminus that's 7 000 plus globally and servicing across, distributing across to 40 000 airports globally. So, as you can see, the distribution channels are really massive, different transportation modes as well.
Speaker 2:So what we are doing at Flyoro is fundamentally revolutionary in the sense that we are working to create future cost efficiencies on the supply chain as we actually transition into the future where it's not just kerosene but there's going to be lots of different fuels that are biomass or renewable derived. So I would think that that's pretty important If I could take you back, oscar, to like decades back where we have been flying based on kerosene itself. So, as you would imagine, from the large-scale refineries to the big vessels, to the storage facility site, to the pipeline, a series of supply chain eventually to the airport, all these have pretty much been designed to accommodate just one single product, that's kerosene. So that same operational model.
Speaker 2:When you are just dealing with one single product, it's very easy to achieve economies of scale to maximize that utilization. But what we see here is actually a very big challenge from an operational standpoint as we are actually positioning towards that future whereby you are getting lots of different biomass and renovables that are coming to the equation, planning that, but you are going to get more complexities and the challenge is really getting to the right blend at the right volume at the right cost point for each airline and also allocating that right storage asset, that right transport capacity at the right utilization economics for SAF to really power up that industry to come. Utilization economics for SAF to really power up that industry to come.
Speaker 1:Do you think the supply chain is being discussed or considered enough in SAF? Because there's a lot of discussion about production, getting production underway, which is obviously a critical aspect of SAF, but is the operational mechanics of getting SAF from one place to the other. Is it being considered enough and what are the complexities that SAF brings to this pre-existing supply chain? Because, you mentioned, it was initially designed for one single thing to be transported the kerosene. Thing to be transported the kerosene and in order for that, to generate the economy, the functioning economy of scale. So how does SAF complicate that?
Speaker 2:Well, when it comes to the supply chain, it's really extensive, starting from the supply side eventually when you deliver that to the wingtip. So in between this series of uh transportation midstream and also on different intermediary points, um, well, in in that sense, right now we are seeing a lot of focus on growing that supply capacities, which is fundamentally needed at an industry level. Put it simply back to the case on an espresso machine. You know, without the coffee beans you can't blend. Without the abundant supply of coffee beans you can't have lots of cafes everywhere to kind of power up our minds and creativity every morning. So the same case comes back now to Seth. We really need that supply to come into play before we can really create that magic in our skies to decarbonize light. If I were to kind of put some numbers into perspective area, if I remembered correctly, we burn some 300 billion liters of jet fuel every year, but right now only less than 1% of that comes from Seth. We have more than 700 refineries globally, but I think we have less than 50 or even less than 20 SAF refineries today, many of which are still in the construction stage. So at an industry level, a lot of work still has to be done to kind of scale up that capacities.
Speaker 2:And I think right now we are seeing the right track. We are seeing government policies being shaped up, we are seeing a private push in terms of investments being developed, and what we really need to do is to bring this supply capacity up to a level that natural market forces able to detect the prices of the SAF to be developed in the long run. And that is where you can arrive at an inflection point. I think it's pretty similar to what we see for jet fuel, whereby it's a commodity, huge volumes, and we are getting that into the trading market as well. You know, looking at different kind of developments outlook, contango, market backwardation, market things like that and that is something that we really need to bring SAF to that kind of level for that to be readily accepted at an industry level, and also bring that price premiums to something that's kind of relatively reduced in comparison to fossil jet that we have in the industry today. So I think naturally, looking at those aspects and we can't just work on government policies for the long term there's actually a huge pressure to the federal budget as well. It has to come back down to a market basis. So that's where, back to your question, we see a lot of supply capacities being developed today and that is very much needed. And at a point when supply capacities are being established, uh, that is the time that we also need a robust integrated supply chain to enable that distribution.
Speaker 2:Now on the second part of your question uh, how is this? Now, on the second part of your question, how is this being very different from jet fuel? So, if we were to look back at regulatory standards, apart from kerosene that has been allowed or permitted to fly, in the US we market that as jet A fuel. Globally we market that as jet A1 fuel, but pretty much they are just that kerosene, but pretty much they are just that kerosene.
Speaker 2:Right now, there are seven approved plans that have been permitted to fly that are considered drop-in with existing aircraft bodies. So right now, there are seven different type of plans based on feedstock and production pathways, five of which are permitted to go up to 50%, two are allowed to 10%, and the reason why we are seeing this variation as well is because the end result of that fuel needs to be compatible with Jet A1 fuel, to tap onto the same infrastructure and the same aircraft body to be compatible. So that's where a lot of work has to come into play to get this safe from its neat form to something that's drop in and that's a blended form that we see commonly in the industry today, with the right chemical and physical properties to fly pretty much I mean, I really like your coffee machine analogy.
Speaker 1:I'm absolutely stealing that. I think it's brilliant. It's um, it's such a good way of thinking about it, so I'm absolutely stealing that. I think it's brilliant, it's such a good way of thinking about it, so I'm absolutely stealing that, thank you. So your solution is called the Alpha Light, your modular blending facility. You've talked a lot about the sort of optimal economics of the supply chain and, in order to minimize costs in actually moving kerosene, in this case south um what considerations goes into where you put the alpha light in the supply chain? Because, am I right in thinking you can put it in numeral numerous different intersections, each with their own respective benefits, along the supply chain. Is that correct?
Speaker 2:Yes, indeed, oscar. And so what we have designed at engineering level is something that's really modular in nature and something that's able to integrate at all points of the value chain. So, be it near the airports, be terminus, be at refineries, that's the flexibility that we want to create in the industry. Now back to the term alpha-like why why we have named it alpha-like, in a sense, is that in fact alpha and like. We actually want to create a set that is really lightweight. That's something that's really different from industry norms.
Speaker 2:So in today's context, when you look at conventional blending, you pretty much look at a big blending tank which is heavy in capital outlay. It requires a lot of operating and maintenance costs as well, and then you're working on a physical mixer which is very energy, energy intensive. So the motor that you need for that, the engines, are really large as well to power that whole mixing. Uh efficiencies and all you know, the full construction of that could also take about two to three years. Uh, at a very large capacities that you have to commit to uh. On the contrary, what we have actually designed is actually something that's really customizable. So instead of taking like two to three years, we only need about six months to get that module up, instead of focusing on that huge volumes commitment today, whereby we are still at a very embryonic stage of the industry. Lots of time are actually on the underutilized aspect and that actually drives up the cost economics today. So what we do is that, because we are modular in nature, we can tailor exactly to the capacities that is required and that pretty much allows us to optimize that blend efficiencies, to get the best price point, to accelerate self adoption. So that's where the light comes in. Like, we want to position fast and exactly to what is needed and, if you need to scale as you grow, and then we can kind of pack that up in a modular nature.
Speaker 2:Now alpha. I think the reason for alpha is also because, um, it comes back to military days uh, you know where where you kind of like you want to be the first to get in and, um, and you want to be, uh, as productive, efficient as you can, swift and decisive as well, um, so that's what our whole machine is designed to be. When you have an area that you decide that you want to enable blending, we have that right solution for you to actually get in there fast and effectively. So that's why it's called Alphalight. So then back to your question, oscar, on when we look at where we want to deploy, or where it's kind of viable to deploy.
Speaker 2:Um, we usually base it on three different aspects or three considerations um, firstly, is the airport ready to get safe, uh. Secondly, is it, uh, is that close proximity to an airport is safe, readily available to be delivered to the airport? And the third thing we look at that community as well. Is there that airline community and is there that government set up that's really excited to bring SAF into that airport, that state or that nation? And that's where we really want to enable their ambitions as well.
Speaker 1:So you're working across commercial aviation and business aviation. Which market do you think the Alpha Light suits best? The business aviation market because that's smaller, there's less capacity going through there, or the commercial aviation side, because there's there's interest from both parties. Both of them are showing significant demand in actually getting access to SAF. So which one currently are you seeing more sort of interest form and where are you sort of targeting in the future? Well, I I think two things to that, oscar in the future.
Speaker 2:Well, I think two things to that, oscar. Firstly, we started in business aviation and in a sense that segment has already been validated and our partners and customers have realized that value and that is where that got them really excited to want to continue getting more and more of that and kind of growing. And today a lot of conversations are asking hey, not just Singapore, can you actually get us refueled from different hubs as well? So that's where our team is really working hard to identify other airports that we can potentially build this as a self-integrated hub For business aviation.
Speaker 2:I think the key thing to really understand as well is the buying behavior, which can be very pilot dependent. That's very different from commercial airlines on the procurement process that they have. So for this pilots are usually it can be very ad hoc, on demand, like when they're at the airport. They have the options of different fuels that are available and they can make a quick decision on what they want or what brings the best economic value to that interest. And the thing about having that custom level of SAF is that it allows them the flexibility to tailor to their routes or the usual places that they usually fly. To tailor to their routes or the usual places that they usually fly to. So there may be certain considerations that come into play, like carbon tax incentives and other sustainability attributes that they want to actually balance that with. So we actually offer them that flexibility to tailor exactly to what is needed. So that brings about a very different consideration when it comes to airport hub for this business aviation to refuel, and all of a sudden it becomes very specific, very niche to what their interests are.
Speaker 2:On the other aspect, with regards to commercial aviation, I think right now, based on our module itself, our base module actually starts from a capacity of 2 million litres of fuel that can be blended every day, based on the 24-7 utilisation.
Speaker 2:So that's some 700 million litres of fuel that can be blended every year.
Speaker 2:So if I were to kind of put that into perspective of a major international airport like, say, london Heathrow, roughly 10, 12 modules are more than enough to power up the whole airport. What is needed really, then is are there enough storage capacities available to store the staff at the airport? So in that sense, right now we are also working a lot on creating a more integrated supply chain to get SAF delivered to the airport for commercial airlines and what we are really bringing, or revamping into the whole supply chain distribution to the airport is we're actually creating that ability to leverage on existing jet fuel that is already delivered so cheaply, abundantly to the airport, and we are creating a new option of getting your SAF delivered directly to the airport to kind of maximize the whole logistics framework. So it's just like you know, popping in a capsule and out you go, you get that perfect cup of coffee, just that for us. We have that added layer of quality and safety control because all this planning are powered up by data and automation technologies.
Speaker 1:Who do you work? Do you work with SAF producers? You've mentioned airports quite a lot, so I'm guessing they're a very key partner for you but do you work with so in the business aviation side, that would be the sort of fbo's as well? Do you work with fuelers, fbo's, airports and the staff producers, or do you mainly focus further downstream of the airports and FBOs, or are you working across it all?
Speaker 2:Yeah, so for us, we are a blender and pretty much we are that platform enabler connecting the SAF producers and the FBOs for business aviation or the airports for commercial jets, be it domestic or international. So naturally, we are always in that position that we have to align between both parties, ensuring that there's enough supply inventory level and ensuring that the flights are properly refuelled on time. And it's a lot about getting the right operations framework in place. Yeah, so for us, although we are blender, that's where we are in that pivotal point of the supply chain, the critical point to ensuring that we are able to fully maximize existing business as usual operation efficiencies I should just say for the non-business aviation listeners, the fbo is a fixed base of operations and they're the basically the um.
Speaker 1:business aviation equivalent to an airport is in the private terminal where business aircraft um land and take off from. So okay, so we've looked at where you fit in the supply chain and who you sort of the partners you work with in terms of locating the alpha light. There's a lot of discussion in the sustainable aviation fuel industry about the need to increase blending limits in order to sort of unlock the full decarbonisation potential of SAF. How does that affect you in terms of your blending? Is it simply a case of sort of pressing a button and moving it up to a certain percentage? How easy is it for you to adapt when blending limits change?
Speaker 2:Right, I think that's a very good question and, uh, that concerns not just on the technical aspects but that also concerns, um, on the commercial outlook, how the industry is going to grow eventually and what makes the most sense for the budgets of uh, be it airlines or even on the business aviation side. Um, so for us, our technology is actually fuel agnostic. Um, when the fuel gets into our machine, we pretty much are able to detect the fluid properties and based on that, we are able to optimize that uh blend cycle accordingly. So, uh, in fact, what we are doing a lot now internally is working on R&D to kind of reviewing the resultant chemical properties and also on how we can optimize the batch cycle to be much accelerated for higher efficiencies. So this is actually something that is in our focus a lot.
Speaker 2:The reason is that we are starting to see more SAF types coming online. We are starting to see a lot of developments kind of improving existing operational standards on what can be compatible with your current jet engines, and for us it also means that we have to constantly work higher than the limits in getting higher blends in place to be positioned for the future to come, I think on the commercial perspective as well. So right now we're actually working on a different set of flyers. So some have higher ambitions and also what is considered an acceptable price point to them, so they are able to kind of take a higher blend limit, which is naturally more expensive, and some they prefer to start small and grow eventually. So that is where we are trying to tailor as well.
Speaker 2:Eventually, what we are starting to see is more supplies being projected to come online.
Speaker 2:So I think, based on economics, we are actually optimistic that the prices will eventually come down, yes, but more of an acceptable premium compared to your current kerosene, and that is also respective to the different kind of products that we are looking at the grades as well, so whether it's a half SPK producer or is it ATJ producer. So that's the certain dynamics that we're looking at. And then on the flip side, we have kerosene as well, whereby we are starting to see carbon taxes and increasing carbon taxes being developed for these hydrocarbon derived fuels. So what is really interesting on a commercial perspective eventually, is that there are going to be a lot more options coming on the table and I think from an airline perspective, naturally they are going to be more cost conscious, not just on the options available to optimize their fuel procurement process, but also cost conscious, to balance out what is the best in the interest. To balance that out with the carbon taxes that are coming into play and also complying with the relevant mandates or incentives at different airport hubs.
Speaker 1:So I mean I'm coming back to your coffee machine analogy is it in terms of the technical sort of blending aspect? Is it a bit like pressing the button and choosing whether you're going to have an espresso or a cappuccino, in terms of the amount of water that gets filtered through the coffee? Is it in the simplest terms? Is that sort of the sort of way you can look at it in terms of how you sort of look at the amount of that's being blended, saff, that's being blended through the kerosene?
Speaker 2:yes, indeed, you're right, oscar. There's one key thing that we have to work importantly on when it comes to fuel quality as well. So for kerosene, we base that on what we call ASTM D1655. So that's pretty much that standard that you have to abide by, comply with, certify on spec to be safe for flying. For SAF plans, we have a more extensive or rigorous testing called ASTMD 7566, with a lot more coverage. So that is to ensure that the final plans are going to be right on spec as well. And once that is certified, yes, you can be compliant to fly.
Speaker 2:So back to our machine machine. Why that is so important? Liken that to, maybe, the cup of cappuccino. What we have to ensure every time is that the final cup of cappuccino that is made or brewed, it has to always comply with the relevant standards. It has to always be that same cappuccino that's going to come out. It has to be with that consistent level of quality specifications that is needed, of course, when it comes to fuel. We can't have that foaming involved, because that will mean the presence of air, which is going to be quite a concern when it comes to a safety standard up in the atmosphere. And of course, oscar, you can't have the barista latte art on top of the viewers as well?
Speaker 1:Is it the same in fuel like it is in Italy? You can't have a cappuccino after 11, so you can't do a certain type of staff after 11am.
Speaker 2:Yeah, pretty much.
Speaker 1:So you have have mentioned that your solution is considerably lower capital expenditure, lower capex, lower operational expenditure than particularly these large commercial airport blending facilities that are already in place. How can you offer a solution that has got such a little outline cost upfront and operationally, compared to what has been a sort of a system that's already been designed for the optimal economics of efficiency?
Speaker 2:well, I, I would think it comes back down to how we engineer that, uh, to kind of be modular in nature, to how we engineered that to kind of be modular in nature and the ability to leverage on existing storage tanks. So in a sense, right now, because kerosene is that single commodity in the industry, there has never been that need to really blend kerosene because you are getting that same product, unless certain additives are required to be added for, say, winterized fuel products, then possibly, yes, so that's very different. Now, when you come to SAF blends, where it's pretty much a blend, so that will mean that your terminal infrastructure it has to be kind of readjusted as well to have that blending capabilities done up. So it could mean two options. It could mean option A I retrofit my current storage tanks with blending capabilities. Or option B I construct new blending tanks. Now the difference of what we have is that when it comes to conventional storage tanks, we are able to position our AlphaLite to be integrated with that storage tank and straight on your storage tank comes equipped with that blending capability. Option two if you decide to kind of create that blending capability as well, what we do is that we can leverage on existing jet fuel and SAF that can be directly delivered blended on demand and you just need that one single storage tank to store your self plan. So that's how we kind of position that.
Speaker 2:So when it comes back to um technical considerations, when it comes to conventional blending assets, be it your retrofit or you construct a new one basically the conventional way of doing that is to have those very big circular tanks with that physical mixer in place, which again involve very high capex, opex, and it's very energy intensive. So that's where a lot of cause and energy footprint actually comes in. The difference from what we do is that of course we can reduce the lead time. Of course we can actually optimize that capacity to be exactly what is needed in today's case, which is very important because when you look at the supply today, it's still at a very early stage. So if you were to construct that conventional asset, you may probably have like maybe less than 10% of utilization area and that's 90% that is left underutilized.
Speaker 2:But in retrospect what we have is we are able to get to the right capacities. So we always get that tip top level of utilization that comes into play and of course I think as we scale, that allows us to increase that capacity as we grow and, fundamentally, when we bring that industry to that point that we have a considerable amount of supplies, that come into play. What we really want to create is that your SAF is going to be coming from lots of different origins, just like your coffee beans, and what we really want to do is to enable the demand side to evaluate what is the best cost for them and having the ability to get their SAF directly into the airport from where they fly, be it wherever locations that they are, and that ability to really optimize the supply chain. I would think that that allows them to better control their cost economics when it comes to fewer procurement spends.
Speaker 1:So I mean you you mentioned it there about sort of scaling and building the economics to suit the demand side of the scenario. There are very big and more and more common targets associated with sap production around the world and with the view to eventually, particularly in europe they're being sort of to eventually, particularly in Europe, there being sort of 65-ish give or take percent of the jet fuel being used is SAF by 2050, with a very steep ramp up in between, considering now, as you said, we're about 1% currently. Are you confident? Is it just the case that you can just put more and more alpha lights into an airport in order to deal with that ramp up? Is that as sort of simple as it is, or is it slightly more technical than that in terms of dealing with the expected increase in capacity?
Speaker 2:So at a high level on the operations side, as much as we try to simplify the process when it comes to the engineering considerations, there are a lot of considerations as well to comply with that relevant country engineering standards.
Speaker 2:And I think even for the EU we have different member states that follow different engineering and safety practices with different codes and standards. That's something that our engineering team also kept always busy to make sure that our equipment or machine is actually conforms to the right standards that's needed in that country. So, for example, when it comes to explosion proof standard first my apologies to the non-technical members of the audience so there are certain aspects like, for example, in France we call it the ATEX explosion proof classification, but in Australia we work more towards the IECX explosion proof classification. So that's very important in the case because as we build that whole machine, kind of changing the different electrical components, different cabling, impacts how we actually design that full infrastructure, how we fabricate that full infrastructure to be compliant, and that also may result in certain time that we need on the certification side. So that's a regulatory aspect that we have to constantly work around as well to provide that level of specific simplicity as much as we can to different airports.
Speaker 1:I mean, ironically, you probably interested the non-technical people the most when you said explosion proof. I mean that certainly pricked up my ears and I'm by no means a technical expert. So, yeah, I don't think you need to apologize for them, because you got the word explosion in there, so that was very well done. Word explosion in there so, um, that was very well done. Um, so we've sort of we've looked at sort of the operational, the sort of this operation of the supply chain, how it sort of fits in. We, um you, we now sort of will pivot sort of more on the sort of finance, investment side. So earlier this year you closed a pre-series, a round of 1.6 million us dollars. First of all, congratulations on doing that and second of all, what's that allowed you to do sort of up till now?
Speaker 2:well, uh, for that role.
Speaker 2:Actually, it's designed to to focus on two key things um, firstly, is to raise our technical and commercial readiness level, um, to accelerate some of the ongoing projects as well and to support our expansion into australia, uh and also conduct early studies into the us uh.
Speaker 2:So there will be more news on Australia coming the next couple of weeks. Stay tuned. And aside from that, the second point is for these investment partners that came on board. They are pretty much strategic investors as well that focus a lot on the decarbonisation aspects into the future, and they have key partners on the aviation side, on the airport side that are really excited about bringing this solution to reduce emissions scope one and scope three in their airports and also for their airline customers. So that's something that I think, from our perspective, is more than just investments. It's about getting the company growing the core competencies of the company and also working with strategic partners on how we could potentially create more value in more refueling hubs, and I would think that that will also go back to our business aviation partners today that are really excited to getting more of our solution at more airports well done for getting a plug in there.
Speaker 1:What have you got plans for further rounds? Are you sort of leaving investment rounds on hold for a bit, or are you actually looking to start another round soon?
Speaker 2:So right now we are fully focused and committed in delivering the ongoing projects, the upcoming projects. At the same time, we are also working very hard to enhance our R&D, making the best use of the data that we have generated so far to kind of get our whole machine to be more robust as more plans come online and at the same time also improving a lot on the sustainability framework. So we are ISCC Corsair certified company and we are looking forward to kind of extending this robust chain of custody framework that we have already developed to our partners. So we do have plans for further rounds early next year and that round is going to be a lot focused on two things. One is to grow further into both Australia and US. Secondly is to grow our R&D and technical capabilities further, and that will also mean a couple of team expansion that we got to do.
Speaker 1:So you're starting around the next round early next year. You've just closed your pre-series A earlier this year. Do you think there's enough capital sort of venture capital investment available in Asia relating to infrastructure solutions in the SAF space? Or do you need to sort of cast your net wider and look at sort of the more traditional VC areas like US, sort of Australia, europe? How have you found the raising?
Speaker 2:Well, in Asia, we are starting to see a lot of venture firms being developed with a key strategy on decarbonisation solutions, and I think we have the privilege to work on that as well.
Speaker 2:So, two of our key investors from the previous round Odyssey Ventures and Investable so they are one of the key leading D-Cup venture capitals that we have in the APEC region and it has been a privilege so far working with them and how they have supported our journey together to create more value in airports within this region. So, apart from that, I think in the next round we are probably going to look at things on a strategic basis as well. So for us, we're looking a lot into the US.
Speaker 2:The reason is that, in terms of the sheer number of airport sizes in the States, we have more than 19,000 airports, whereby majority are actually regional and smaller airports, and at the same time you have in the States more than 90% of aircraft are actually privately owned. So, as you would imagine, the whole supply chain is actually very fragmented. That buying behavior is also very fragmented and that will also mean an opportunity for us to really shape up and develop that supply chain to be more robust eventually, so that there are more safe options available across different airports. So that will mean that from a company strategy level, for us to really support and grow our ambitions, I think it would make sense to have a strong support partner as well in the States, and that would also mean that if we are able to work with a strategic venture capital in the US, that will allow us to be better positioned to support these airports. I think that will make us to be better positioned to support these airports.
Speaker 1:I think that will make a very interesting and compelling partnership together. Is that sort of the fragmented infrastructure? Is that one of the sort of things that you look at when you're looking at regions to expand into? Because you just said you're looking very keenly at the US or you're working on Australia projects right now. Is the fragmented infrastructure one side and the sort of invested sort of airports side of the equation? Is that those two the main driving factors when you look at where your which markets you're targeting for your expansion, or are there other things that come into play?
Speaker 2:That's a critical part that we're looking a lot to, of course, apart from the availability of self-supply and also the strong drivers from the airlines and the government side as well, I think when it comes to kind of really getting the supply chain to be more robust, what we are really looking into, especially when it's fragmented and in terms of the sheer number of airport sizes, is that that will also present a huge opportunity that we could potentially optimize to really bring that adoption cost point down From a company perspective as well. Right now we are still very lean, although we have made lots of headlines, but I think for our site, we are still staying very grounded and we are working to create the maximum value based on the resources that we have, and that will also mean key markets that we really want to enable this decarbonisation.
Speaker 1:So that comes back now again to the States and Australia. I mean, tackling the infrastructure in the States is no small, small challenge. It's a vast, vast infrastructure when it comes to aviation. And on that, two of your sort of partnerships you've got at the moment. You've got one with jet aviation, a huge business aviation player around the world. You're working with them in their fbo in singapore is that correct at the moment? So you're working with them there. And then you've got a partnership with duncan aviation, more in the us as well. So do you think business aviation can get their hands on enough saff at all these airports? Because in the us there is a huge amount of private airports around the country, not necessarily all utilised to the same extent as the others, obviously focusing on the major hubs, and they've got the added difficulty of challenging commercial aircraft which are dominating the headlines in terms of offtake agreements, investments in projects. Can business aviation get their hands on enough SAF to deal with their demand?
Speaker 2:Well, I think that's a very good question and how you rightfully put it in terms of how the business aviation and commercial aviation are developing right now with naturally lots of off-the-agreements that we have seen.
Speaker 2:So at this point where supply is pretty much still limited less than 1% of a raw jet supply itself I think on the pragmatic side that also presents a bit of challenge sometimes to secure that amount of molecules as much as we can being delivered to the airport.
Speaker 2:And as we grow I think that will also present a pragmatic point back on the course. So it comes both sides. So one is supply, I think, to grow that demand to also get business aviation guys to adopt SAF at the airports. It will still come back down to how they evaluate the cost with the incumbent kerosene. So when we reach to a point where SAF is affordable and abundant, of course it will never be enough. But back to the case today, I think that's also one of the key points that FlightOro is trying to or working very hard to resolve and enable that industry, especially for business aviation. So that is where we work closely with the relevant SAF producers as well and also providing that flexibility to offer that various SAF price offerings to business aviation to adult and giving them back that full ability to control the cost economics, based on that unique last mile proposition that we are working on for business aviation FBOs.
Speaker 1:So I've got one final question and it relates to book and claim. So you're very, very focused on the physical molecules of SAF. I'm just curious about your thoughts on book and claim, because that is the idea of decoupling the molecule from the credit associated, the sustainability credit from it. So I just wonder how you see that piece playing going forward, being so focused on the physical molecule itself.
Speaker 2:Well, that's a very important thing that we are working a lot on as well, especially as we are costier certified operations.
Speaker 2:So right now, before you can get that credit generated, basically on the processes that you have to get that physical molecule to the airport, you need someone to uptake that, and once you get it off the ground, once you get it flying, then based on that, you are able to use that sustainability attributes to become credit. It comes onto that book and claim market or framework that has been established. So, end of the day, we still have to get that physical molecules up and if we can get it to an optimized cost level, that would also mean that the cost to generate that credit is going to be at an optimal level. So that's where we really want to create for the industry in terms of getting that credit generated optimized and, as we have already worked on and seen back in our operations in Singapore, lots of time actually blending these physical molecules, and we're also finding a platform that we can get our credit generated up in a book and claim framework, and that's where we position ourselves very closely and work very closely with the various book and claim partners.
Speaker 1:Jonathan, that was fantastic. Thank you so much, that was excellent.
Speaker 2:Thank you very much, Oscar. It's a pleasure to chat with you.