The SAF Podcast
The SAF Podcast is 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.
The SAF Podcast
The SAF Podcast: Repsol and Spain leading the SAF charge
The Iberian Peninsula's emergence as a SAF production hub isn't coincidental. The region boasts abundant feedstock availability, strong agricultural and livestock sectors, ample renewable energy resources, and a robust refining and petrochemical industry. This combination of factors, along with existing market demand, has created an ideal environment for renewable fuel production.
Berta Cabello and Carlos Suarez join us on the podcast from Repsol this week. These industry leaders provide a deep dive into Repsol's ambitious renewable fuel initiatives, including their refinery in Cartagena and the e-fuel plant planned in Bilbao. This episode offers a glimpse at why Spain and Portugal are becoming powerhouses in the SAF industry, backed by abundant resources and expert industrial capacity.
This episode delves into the vital collaboration between producers, airlines, and airports in scaling SAF adoption, while offering insights into overcoming feedstock challenges and maintaining the integrity of renewable fuel supply chains. We also unravel the strategic dynamics of the renewable fuels market, revealing how Spain positions itself uniquely by leveraging less competition and flexible production capabilities.
Berta and Carlos highlight the crucial role of institutional support and regulatory frameworks in sustaining global competitiveness. Our discussion underscores the importance of demand-driven projects to meet Repsol's goal of net-zero emissions by 2050, emphasizing the necessity for investment in low-carbon and circular products.
The foundation of Repsol's strategy lies in their flexible approach to renewable fuel production. Rather than focusing solely on SAF, they're balancing production across aviation, marine, and road transport sectors. This flexibility aims to allow them to adapt to market demands while maximizing the use of byproducts from the production process.
Looking ahead, Repsol appears well-prepared for the initial 2% SAF mandate under RefuelEU. However, they acknowledge the challenges in scaling up to meet the 6% target by 2030, particularly regarding the e-SAF sub-mandate. The company emphasizes the importance of feedstock sustainability and transparency, implementing strict auditing and certification processes to ensure the integrity of their supply chain.
If you enjoyed this episode, make sure to check out our most recent discussion with Dan Keibrich, Squake via the link: https://www.buzzsprout.com/2202964/episodes/15812552
Hello and welcome back to another episode of the SAF podcast. This episode, we're delighted to be joined by Berta Cabello from Repsol. She's the Renewable Fuels Director for the industrial part of Repsol, and we've also got Carlos Suarez from, who is the B2B Aviation Director Both of you from Repsol and this week we're going to be looking at what Repsol is doing in the sustainable aviation fuel space, as well as what's happening in Spain, why Spain seems to be such a hotbed for SAF in Europe, what's going on down there, as well as a myriad of other things. So, berta Carlos, thank you so much for joining us. How are you both?
Speaker 2:Great, it's great to be with you and thank you for having us.
Speaker 3:Yes, same thing. We're happy to share repssol view regarding SAF and all the stuff.
Speaker 1:Excellent. So before we get into everything Repsol's got going on, do you two just want to introduce yourselves in terms of your background and how you got sort of where you are now?
Speaker 2:Okay, great, I'm a chemical engineer and I've been working in Repsol for more than 20 years and for the last four to five years mainly in decarbonization projects, renewable fuels, ccu, ccus everything related with reducing our emissions, of our processes and on the products, and it's a really exciting time for a chemical engineer and for me, it's very interesting, very new, so great to be able to experience this transformation. Yeah, great to be able to experience this transformation and Carlos Suarez.
Speaker 3:I am a mining engineer, let's say like or energy engineer. I've been working also in Repsol for more than 20 years more than Berta she's younger than me and my background, mainly, is related to the refining business. I've been related to the refining business, I've been working for the refining business for many, many years, but then I changed to the. Now I'm saying to the light side, not the dark side. I'm moving to the marketing side. I went to Mexico and I was responsible for the business there, both the storage and new service stations, and then, when I came back to Spain, I remained at the, let's say, the marketing site and now I'm responsible for the sales to B2B business, saf or marine or trucks, everything, or trucks, everything we can sell that our partners from the industrial side are producing Excellent.
Speaker 1:So I know Repsol's got so many things currently underway or things being planned and you've got a long-term strategy, particularly when it comes to sort of renewables and SAF, Do you? I suppose, Berta, this might be one for you. Do you want to sort of explain what Repsol's got going on currently in terms of SAF production and what sort of the sort of five-year plan is, 10-year plan and sort of other things in the future?
Speaker 2:Yeah, of course, 10-year plan and sort of other things in the future. Yeah, of course. Yeah, you know, we've been producing renewable fuels for a long time now more than 25 years so we have experience doing that, mainly for road because the demand was there, and for the last, already almost four years, we have been producing SAF in our refineries. We started co-processing SAF in our existing facilities. That is great because we can make use of our assets and also the know-how that we have and all the know-how that we got producing HBO for road. We are using that for SA, sap. Then you know that this year we started up our Cartagena plant. That is 100% dedicated plant, using waste to produce HBO and SAP. So now we have both production lines co-processing and also production, 100% dedicated and from here we have a lot of projects in our pipeline.
Speaker 2:You may know our e-fuel plant in Bilbao. That one is a demo because you may know that production technology is still pre-commercial, not 100% commercial. So we thought it was better to invest before going to a big CapEx intensive plant going through a demo. That's already under construction and it will be starting up in 2026. So that will be great because I think it will be one of the first plants having real product to be tested on planes, and we are really happy about that. And from that point we have other HEFA projects. We also are exploring other routes, like alcohol to jet, different technologies coming from different ways and, of course, the scaling up of ISAF. That for sure will come from 2030.
Speaker 1:So I mean, that's just a load of projects for just you guys in repsol, but you in sort of the iberian peninsula around there, you've got chepsa who are also working on this. You've got galp over in portugal. There seems to be a lot of activity in terms of renewables in the region. What makes sort of spain and and Portugal such an attractive region to start producing renewables in SAF?
Speaker 2:There are several reasons. I think that we have plenty of raw materials. We have a very strong agriculture and livestock sector, agri-food industry also. We have sand, we have renewables that, at the end of the day, is also part of the feedstock or the raw materials utilities that we need for the plants, and we also have a strong refining and petrochemical sector, with this know-how we were mentioning before, because we are making use with this know-how we were mentioning before, because we are making use of this know-how to go from the traditional fuels to the renewable fuels, and Spain has been one of the biggest countries in Europe, I would say, in this industry. So we have renewables, we have the raw materials, we have the expertise. So, yeah, I think it's a good place to be producing renewable fuels.
Speaker 3:Yeah, and on the other hand, we also have the market. Okay, we have the companies that want to buy the products and, as Berta has mentioned before, SAF is new not that new. We've been co-processing, but it's newer than other renewable fuels. But we've been selling renewable fuels for many, many years ago. We've been doing it for truck transport, for road transport, and the demand is there. Just to give you an idea, though, we are talking about SAF at the end, renewable fuels are the same.
Speaker 3:I don't mean the same. They are produced somehow in the same way with different aspects. That's one of our strengths, that we can produce both SAF or other products. But just to give you a number, we have already in Spain more than 500 gas stations where you can buy 100% renewable fuel, and we want for the next year to rise this figure up to 1,500. So it's not anything new. We have the market, and regarding our airlines of final customers, I can say the same thing. So industrial assets, raw material, energy and market. So that makes sense.
Speaker 1:You have just successfully preempted about the next four questions I'm going to ask you. So we're going to dig into those bits individually in a bit more detail. So first thing I wanted to I want to go into is your relationship with airports and, by extension, sort of airlines, and how you said there's demand from those sides, but how important are those relationships and sort of managing those relationships for you guys sort of in the ongoing future as SAF continues to mature as an end, a sort of a commodity?
Speaker 3:yes, um, regarding SAF, there are a lot of players that have to play an important role to make the SAF work as we want it to work. Of course, producers like us, also authorities, airports, airport management, airlines, you name it. There are many players and all of them play a significant role. Any help from airports to promote the use of SAF is going to be really a big boost for SAF consumption. We have seen that has worked in the past in different airports where they offer, let's say, a help for the, for the use of saf, and we have seen that that has worked a lot.
Speaker 3:We have been talking here in spain, we are in continuous talk with the responsible of all the airports in spain, aina, uh, just to make sure, first of all, that we are going to be able, as we we are going to be, to meet the demand for the 2%. But the point here is that, yeah, not only airports, but all the players along the value chain itself have to be on the same page. And also, talking about renewable fuels at ground operations, we are already using our renewable fuels in some of the airports. We reached an agreement and we vowed remember to the use of renewable fuels and we are working closely with them to improve the use of these renewable fuels and to improve the use of these renewable fuels and to improve the use of SAF.
Speaker 1:Another thing you mentioned is your desire to grow the biofuels business, the HVO renewable diesel that goes into trucks, and you said your planned growth of getting 100% renewable fuels into filling stations for sort of road transport.
Speaker 2:How do you balance that growth alongside your plan to grow marine and your plan to grow SAF, Because growing renewables across all those three industries and those different sort of transportation sectors, it can't be easy to balance those demands against each other from the production side, I think it has a lot of advantages because you have the flexibility to change the production to one sector of the other, depending on the market, and at the same time, you make use of all the byproducts, because, chemistry speaking, is very difficult to produce only one molecule. So you produce sap, you produce HBO, you produce naphtha, so when you go to different sectors, so when you go to different sectors, you really can maximize the use of your products and, as I was saying, you can be flexible enough to start a production plant even without the demand for that sector. Let me explain. For example, cartagena project was not approved because of SAF, because at the time it was approved in 2020, the FID was taken in 2020.
Speaker 2:We didn't know refueled aviation was going to be approved. There were no signals for specific targets for SAF, so the project was justified because of the demand in road transport. But we really believed in SAF. So we invested a little bit more to have the flexibility to produce SAF and now we are ready to supply. But it was because of the road transport that we have that plan. So if we waited to have the refuel aviation to invest in the plan, we would now like designing. It's maybe five to six years from you. Think about the plan to do a startup plan. So supplying to the different sectors from our perspective is a real advantage and from the commercial part I think it's the same.
Speaker 3:Yeah, it's the same, and sometimes some questions may arise regarding there is going to be enough SAF. But the point here is that, yes, we have the capacity to produce both SAF, both all the other renewable fuels, short-term and mid-term, and new projects coming on stream, or we are thinking about new projects if needed, but if we look at short-term, there is no worry. I mean, there's no question about are we going to be able to supply the SAF that is needed in Spain for the yes, we are going to, even though we are going. That is needed in Spain for them yes, we are going to, even though we are going to supply also renewable fuels for trucks yes, and for marine if it's necessary, yes, and we can do it all together.
Speaker 1:And the answer again is yes. This is really interesting because so far this year we've had big names in the oil and gas industry indefinitely pause projects. I think they're quite well known, so I'm not gonna. I'm not gonna name them now, um, but you guys are sort of viewing this as sort of a whole new industry and with that, the flexibility to produce renewables from multiple industries at the same time is a real advantage. What's your thoughts about this sort of more global trend around sort of other oil and gas companies sort of rolling back their renewables production facilities? Is that something that's concerning you as sort of an industry in terms of promoting sort of decarbonisation of transport?
Speaker 2:I have a bittersweet sensation, because maybe I shouldn't say this but less competition is good for us. I mean less project, less competition. So it would be good and I think that, compared to those projects we started before, timing is really important. Also, the size is also really important. You know, we have been investing, but in a smaller unit, adapting to the demand increase. So the risk that we are taking is manageable with this flexibility that we are commenting.
Speaker 2:So I think our approach is different. We are using a lot our assets. So the first unit, cartagena, is brownfield, the following ones are retrofitting, so the capex is lower. So our approach is different and with less projects, less competition. So it's that part is sweet. The bitter part is that it's a signal. Maybe it's a good signal for the administration, for the institutions, the European Commission, to really understand that they have to support this industry because we have competition from other places in the world and we want this industry to happen here. But they maybe need to support a little bit more. And so, again, that's like saying these trades are not 100% sure. You need to support demand and support incentives and support investment. Compared to other parts of the world and also regarding market, there are differences from our projects, I think Carlos.
Speaker 3:Yes, as we have said before, it's a significant strength of our projects is that we have the demand here. I mean, if you are thinking about a project that is intended mainly to export the production, I guess you must think about it twice or three times to make sure you have some uncertainties about regulations in the future. But also if you have uncertainty about where you are going to sell that product, then you think about it more carefully. Here we've been scaling the production or the projects we have already accomplished. They shall undertake projects that maybe will come to meet the demand.
Speaker 3:The demand is here, so the risk that we are undertaking is much lower than the risk that other companies with another scope might have. But then again, investments are going to be needed anyway. So a more clear framework, regulatory framework is needed. Um, also some kind of incentives to make the investment, to make sure that the money that you are going to put into a project is going to be profitable and you are going to get uh, to get you know, the money back. Somehow is needed, and new things need to be done in the coming years to promote the investment of new units all over europe, mainly because somehow this is a global issue. I mean co2 is a global issue. Solutions that are different in europe or united states can change the game completely and you have to be really careful to take the right decisions to support the investments we talk about. Europe to support the investment here in europe.
Speaker 1:Europe to support the investment here in Europe and make sure that we are not in disadvantage with another countries. I suppose that I mean your point about building capacity in an area where there is demand, versus building a refinery with a view to exporting is makes the project a lot more complicated and challenging logistically but, you guys saw.
Speaker 1:You know, with this, there are other people co-processing. There are other people that have been doing it for a while beforehand but haven't necessarily pulled the trigger and gone look, we'll set up this renewable diesel facility that has the capacity to make SAF like you have, and haven't necessarily sort of made that transition across other countries in Europe. When you know, as you said, when you made this decision, there wasn't a mandate refuel EU hadn't been signed into law. So what, what makes what's holding people back, do you think, compared to where you guys are being so much more proactive in those terms?
Speaker 2:I could maybe answer you from more the positive perspective. From our view, we have a really strong commitment to the goal we have of being net zero in 2050 and profitable net zero. I mean we want to have a business, an industrial business, to supply our customers with low carbon products and that strong commitment is driving our investments, our growth investments, to that line. Of course, we keep our assets and that's part of our strength, but the new investments are all to produce renewable fuels, circular products, a lot of things hydrogen related with reducing scope 3 emissions and also scope 1 and 2.
Speaker 3:So maybe other companies don't have that strong commitment with the goal or other objectives, but from our side this is clear yes, and I would say that if you see the last years, mainly in europe about the refining in industry, they've most of the companies have been closed in shutting down refining assets, but repsol hasn't. So it really makes the difference because right now, if you think about a really really, let's say, greenfield project or a project that is going to take advantage of the existing facilities, existing complex, it really makes the difference and probably it's one of the things, besides what Bertha has already said that helps us all to meet, to be able to to commit and to undertake new investments, because we have the plans already working, so we have the capacity to to start our transformation.
Speaker 1:I want to shift focus slightly to feedstocks and how you guys look at getting feedstocks, because recently there's been a lot of discussion particularly around used cooking oil for the heifer process and the sort of transparency of where that's coming from. It's green credentials and I just wanted to know how you guys are approaching that feedstock, getting access to feedstock as one and then also just making sure it's you know it is what it says it is. It's not sort of being masqueraded as something else and ensuring that you've got the optimal waste products to go into the making of your SAF and other biofuels.
Speaker 2:This is really, really, really important, not only for Repsol. I think it's important for the whole industry because it's like our foundation If we don't assure that this is done properly, we won't be able, uh, to convince the public and and the regulator to to believe in the renewal field. So we put out a lot of effort, uh, big team um it systems. Our auditors are strict auditors. We follow ISCC and other certification systems, but we follow this really really closely and as soon as we analyze or feel that one of the suppliers is not really good enough, we change because we cannot have a flow in here. So it's really important for us.
Speaker 2:We are also promoting a lot of national supply. You know, as we have a lot of, we mentioned the primary sector is really strong. We also have a lot of agri-food industry. Things like animal fats and UCO are there, are here. So we are promoting alliances with producers. We are even collecting UCO in our feeding stations. That is a really innovative solution in our feeding stations. That is a really innovative solution. So we are trying to even, I would say, professionalize the value chain that before companies like us and the oil and gas industry as a general were there, maybe were a little bit less professionalized. So that's key.
Speaker 1:I mean, um, it's something that we put a lot of effort and we are really strict because it has to be that way so next year in europe the um, the refueling mandate comes into effect and I just obviously it's only at 2% from next year, so it's to sort of accommodate that demand, or is it sort of already worked into your production sort of plans going forward?
Speaker 3:Yes, we are already ready to meet the 2% mandate for this year year, for then, for the next years, as I said, while keep on producing another renewable fuels, biofuels for trucks, for road transport, maritime ourselves. We are not changing the pace. We are ready to do so. No, probably the challenge will be in the coming years, if we go up to 2030, when the amount of the mandate increases up to 6% and besides we have a share of the E-SAT. Let's say there is a new challenge, new investments again are going to be needed to meet the demand at that time.
Speaker 3:And and then again we go back to the same same questions is everything is about the investment. Everything is an issue about regulatory framework, ensuring that the investments are going to get the return that you hope to have. It. It's not everything about to make a big, great business. No, it's not the point. It's just to make a business, a business like any other one, to make sure that you are going to get the money back. And yeah, authorities, regulation 2030, maybe, maybe we need to change some things to make sure that we are going to be able, that long term or mid-long term, to be able to produce the amount needed, because then it's changing. But we talk about next year and for the coming years. If the mandate remains at the 2%, we are ready to supply SAF and other renewable fuels.
Speaker 1:Are you more concerned with the overall scale up of the percentage of SAF that needs to be produced, or are you more concerned about the e-SAF sub mandate portion of the scale up, because that's more nascent, requires more investment.
Speaker 2:Yeah, the ISAF is. Yeah, I would say I'm more concerned with the ISAF but because of the maturity of the technology and investing in first of a kind type of units, investing in first of a kind type of units is tricky. It's tricky, so yeah, and also the mandate is not too big, so an industrial unit should be kind of big to make it work. So it's kind of a tricky thing to be able to be in the market so soon with a little volume. Would we be competitive? If we are the first ones, should we wait a little bit? We are working on the projects. I mean, we are doing engineering studies to be able to reach 2030. But before taking the fid we will have to measure all these things and think about pros and cons, the investment, as you were mentioning and decide. But we are one.
Speaker 2:One good thing we have is that we are being able to spend money in developing projects till FID and to be ready because, as I was mentioning before, it takes a lot of time to develop an industrial project. So if you don't do development and you wait and see, then you don't have enough time. So we are advancing and let's see how at the time of FID that would be maybe three years from now. Two to three years, let's see how the regulation is, the market, the technology, and then we will decide. But it's a little bit more. I think. It's trickier than the 6% I would say.
Speaker 1:Carlos, you've mentioned sort of policy uncertainties, particularly around sort of the scale up of the mandate, esafs, where none sort of investment, it all rolled into one. What sort of the ideal policy landscape do you want to see formulate to help? You know, producers like you work on getting these new, this new east south first of a kind facilities up and running in a timely manner, in time for the mandate well, uh, incentives of any kind to support the use of saf would be really welcome.
Speaker 3:I mean airlines. I mean airlines if you see, we have reached a really important agreement with IAG that we are going to sell for this year more than 25,000 tons of SAF, and before mandate. Why are we doing that before mandate? Okay, because there is something called allowances, that it's like something that is helping the airlines to start using SAF while not paying the whole extra premium of the price that they already have. So this kind of incentives are really, really welcome. Any other incentives regarding taxation not about the product, but about everything related to the projects and everything are also welcome. Those are the kinds of things that need to be done as soon as possible in order to make sure that we are going to have, in the midterms, the capacity to produce the stuff that we need and, if you let me, I mean in.
Speaker 2:This is a international business. So I'm a little worried about the different rules we have in the different regions of the world. Even comparing the US with Europe, the kind of raw materials that you can use are different. How you measure, the objectives are different. So I don't really know how the market will react to those differences. I don't really know how the?
Speaker 2:market will react to those differences and for me it would be great if we could reach kind of a ground level feed for everybody around the world. It's difficult, I understand that, but it's tricky to be competitive with those different groups.
Speaker 3:And that's really important because, at the end of the day, if we could get into a strange situation, let's say in the future, let's imagine that Europe doesn't do anything nothing else is more clear in the future and on the other hand, the United States or other countries are starting to give some kind of hubs to produce, at the end of the day, what we would have is self-produced somewhere quite far from the consumption is, and then you will have then again, you know, ships carrying, you know, and emitting because it's going to use some kind of fuel, you know, and emitting because it's going to use some kind of fuel. So it really makes no sense. We are, we're, what we are trying to do, trying to do is becoming net zero. What the world is trying to do is to reduce the co2 emission. If we, if we don't play by the same rules, we could get into a situation that you know it maybe could do exactly the opposite. So, yeah, we, we need like a ground base, uh, playing, playing rules, the same for everyone.
Speaker 1:Yeah obviously we're. We're not there yet in terms of a global sort of ground baseline for what's acceptable and for biofuels what's not. And there's big debates in the US and in Europe particularly around sort of how whether agriculture and sort of feedstocks coming from an agricultural sort of spec spectrum can be used or are acceptable. I know there are a lot more sort of sympathetic to that in the US than they are here. Is that something you think one is sort of concerning this sort of growing sort of divide in terms of what's acceptable for feedstocks, what's not? And On the flip side of that, do you think there's enough collaboration globally, not just within regions, to come to a consensus around what is acceptable and what's not?
Speaker 2:Well, I mean the discussion about the feedstock you were mentioning. I think it will create a distortion you were mentioning I think it will create a distortion. In our case, all our projects are based on waste because in Europe the regulation is pushing waste and we believe that we have to solve the waste problems that we have here. So it makes more sense going through using that feedstock. But if in the US they can use, for example, ethanol coming from farms, from agriculture, the cost will be lower, so the distortion will be lower. So the distortion will be there. They will be able to meet the CO2 reduction targets, because sometimes that ethanol has a good reduction in terms of CO2, and they will have a SAF much cheaper than ours.
Speaker 2:So maybe airlines will meet their voluntary targets with that production. They will shift that demand there and that maybe is not, at least for Europe. For me it's not fair. I mean it's losing an opportunity. For sure you have to demonstrate the sustainability, value change of any feedstock and the CO2 reduction of any feedstock coming from waste or coming from agriculture. But being so specific about what to use, I think we should be more practical, not only for feedstock but for everything, and trying to measure. If you reduce emissions and how do you reduce them, then it's okay.
Speaker 1:Carlos, you mentioned you were talking about your IAG offtake agreement sort of that for this year, and I've noticed in a lot of your other offtake agreements they run up to sort of around 2030, 2029 sort of that time period, with when you look at sort of Volatea, your Iberia um, the Ryanair one you've got and those sort of different offtake agreements. I'm just curious is that what is what makes that date sort of the sort of universal, almost end date sort of that period? Why not have ones that run longer? Is that because the airlines want shorter term offtake agreements or is that just sort of the natural length you're looking for in terms of an offtake agreement agreement? Why sort of 2030, 2029?
Speaker 3:Yeah, airlines. Like everyone, want everything. I mean want everything that's possible.
Speaker 3:Surely they can't be that greedy. Yeah, on one hand, and I understand, on one hand they want to be sure that they are going to have access to SAF. That's one of the main concerns. On the other hand, they have a significant concern about I want to have the SAF at the lowest price possible. That's another concern. So from the second point of view, if you think about it, someone could say, okay, it's better to have a one-year agreement so I can choose. If the price is not the right one the next year I can change. But on the other hand you have the I don't know. So that really makes the difference.
Speaker 3:We have signed different agreements the one with IAG right now, but we have signed agreements with Iberoget here in Spain. With Volotea, we have reached agreements with Atlas for the transport, for IndyJex, we have reached different agreements with different years scope. It depends on the policy of the airlines. I think more and more and more airlines are interested on a long term contract, if it's possible. They want to make sure that they have access to the SAF. But sure this will change the more sure they are about the availability of the SAF in the coming years. For sure the need of a long-term contract won't be as important as it is right now. So that's why you know you have to take in mind that normally the contracts with airlines are one year contract of any other kind of field, maybe two years contract but always short term, just one year, two years. And at the end of the day, if it changed this about SAF, it's just because you're not sure that you're going to have the SAF in the future.
Speaker 2:Yeah, and in some cases we are like I think we are collaborating with them in differently than we did in the past with JetFuel, because if we need to invest, sometimes you need longer of taking agreements to assure the investment and they are kind of willing to change that to ensure that you can invest. So it really goes additionally to financing. For me, the most important thing to go ahead with the investments is this is having an offtake agreement.
Speaker 3:Yeah, yeah, it's something we are working with different airlines we can't give you because we haven't reached the final agreement with anyone, but, yeah, more and more airlines or different actors, let's say even the airplanes companies, are interested in taking a part of some of the new investment and to play, just to make sure they have an uptake of the future production and to make sure and probably we we will see something in the coming years, um, about this. No, and this commitment, of course, will be a long-term commitment, not just for one year, two years or more than five, ten years for sure.
Speaker 1:But this is a very it's an ongoing and interesting conundrum because on the one hand, I can totally understand why an airline wouldn't want to get into a 10-year offtake agreement, at risk of being initially put in at a price that seems reasonable and 10 years or eight years later, the price falls through the floor and they start paying this increased premium.
Speaker 1:But on the flip side of that, you've got producers like yourselves who are looking at building first of a kind projects, like yourselves who are, you know, looking at building first-of-a-kind projects, offtake agreements that are sort of if you're looking for financing, that are the length of the term of any financing agreement that you need is vital for an investor because they want that demand over the full course of the loan if you're getting sort of any type of loan, so it's sort. It's this sort of catch-22 situation and the fact that you're sort of you said, carlos the airlines are opening up to the idea of longer-term off-take agreements is actually a really encouraging thing from a producer point of view yeah, yeah, they, they are doing so and what we see right now is not, it's not a wait and see from the, from the appliance, it's not a wait and see is wait.
Speaker 3:Try to understand, see, but not see just like a spectator. Just try to understand the market, try to understand the new projects and as the market keeps on rolling and maybe next year with the mandate, things probably will change a little bit. As the market keep on rolling, and maybe next year with the mandate, things probably will change a little bit. As the market keep on rolling probably this initial conversation that everyone we are having with different companies will lead to uh, you know, a final decision because we all understand better the market. Um, the market is really new. The safis prices are something new, and next year we are, we are going to have a clearer scope for how is the market working.
Speaker 3:So, yeah, and I just want to address this, that I mean that the airlines are not just waiting to see what happens. They want to play a role and we want to play a role with them, to be together in the path to decarbonization.
Speaker 2:Yeah, and from our side, we have a lot of projects with partners. I mean that has changed also a lot. So we are willing to share the investment, share the risk, because sometimes it's good. So if they want to invest with us, that's great. So is what Carlos is saying is we are having a lot of conversations, not only about price and quantities, but about the technologies, risks, more deep conversations than the ones we had before.
Speaker 1:I mean, this sort of tells me that your relationship with airlines sort of since this sort of renewable transition phase has begun, has started to shift, like the relationship you had pre this, when it was just sort of a negotiation over a two-year jet a1 fuel contract, versus now, when you're sort of looking at this, getting airlines potentially investing in things, signing longer-term off-tech agreements, looking at sort of different biofuels or south producing different pathways, it really sort of indicates that this relationship is evolving and changing. And it really sort of indicates that this relationship is evolving and changing and in sort of five years it won't be the same as it is now.
Speaker 3:Absolutely. Yeah, this is one of the nicest things of the time we're living right now. I mean, I remember back when I was working for the refining business in the 2000s and at that time you thought everything was the same. I mean, you were thinking about a new unit or everything was the same. Right now, we have this uncertainty. On one hand, we need to have a little bit more of clear view of the future, but, on the other hand, to be here and to be a part of this business right now is something really nice and it's something that we are all happy at the end of the day, even the airlines and, yes, it's something really good because the airlines now are understanding much more the business that they did in the past.
Speaker 3:They are also concerned about the decarbonization and they are also committed to reduce the co2 emissions and they want also to play a role. Of course, the economic view of the world, of everything is really significantly important, if there.
Speaker 2:But they want to play a part, just not being a buyer, but being a partner, and and probably we will see some of these things in projects in the next years yeah, yeah, and we are having even conversations, um, and we have, we are together farmers, uco suppliers, producers, airbus, is there also Toyota and supermarket chains all the value chain and you have interesting conversations with a transportation company, with a, that's like boom, I mean, we didn't have that kind of conversations before. I have really interesting friends right now working in this value chain and it's great because you really have a local value chain and you have different sectors understanding the challenges of the others. So, yeah, I mean I think it's better than it was before.
Speaker 1:So one final question because I realize you've given up a lot of your time already, so I won't keep you too much longer. Repsol received 120 million euros loan from the European Investment Bank and I'm just curious about your thoughts about sort of investment coming from institutions like the European Investment Bank, sort of multilateral sort of banks, and sort of that sort of financing. How important was that for Repsol to be able to achieve what it's done up to date and how important is sort of, if possible, expanding that capacity to help grow the biofuels industry in Europe and across the world with other sort of investment banks from different regions, or development banks, or multilateral banks, investment banks?
Speaker 2:from different regions or development banks or multilateral banks. I mean that was great. I mean for us it's a great financing contract and having the support of the European Investment Bank, that they're really, really strict and they're really challenging. So for us it's like having an A in the exam, so we are really proud, so that was a milestone for our project and, of course, it's really important to have the support of that kind of financing with very good conditions. So that has to continue and I know that the European Investment Bank is interested in a lot of projects that we are developing and other competitors, so they are supporting us.
Speaker 2:But I feel right now that is more money than projects and the things that are doing projects. Feasible is things like we are mentioning of taking, because you need that Also, you need that technology de-risking, being able to assure that the technology is going to work. That is, I think, right now, a little bit more important that financing to the go ahead, because I I feel that the support from the finance part is is is already there also covering the funding gap, because sometimes it's not only getting the finance but having that push between the cost of production and the market price for new technologies that is over production cost compared to market price. So you need a funding gap. Then you need other kind of support, not only alone. So it's great, and for us it's great, and for us it was amazing, but for the future I think we will need a little bit more support, excellent, and on that supportive note, I think we will wrap it up.
Speaker 1:Carlos Berta, thank you so much for your time. That was fantastic.
Speaker 3:Thanks to you, our pleasure.
Speaker 2:Thank you.