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: Avfuel - Challenges of moving SAF from A to B
Join us this week on The SAF Podcast, as we dive deep into the logistics and distribution challenges of sustainable aviation fuel (SAF) with CR Sincock from Avfuel, one of the largest global aviation fuel suppliers. As a leading distributor of SAF in business aviation, Avfuel offers unique insights into scaling SAF delivery across the United States.
In this episode, Sincock discusses Avfuel's strategic partnership with Neste, the world's largest SAF producer, and reveals their exciting new role as a launch customer for Valero Diamond Green in Florida. This expansion marks a significant step in addressing the East Coast's underserved SAF market. He discusses how this collaboration addresses logistical challenges in transporting SAF beyond coastal regions, opening pathways to major hubs and underserved markets.
CR provides insights into the challenges of moving physical SAF molecules and the current locations where Avfuel offers SAF. He also touches on the unique case of Truckee Tahoe airport, which operates on 100% SAF, highlighting the importance of local environmental consciousness in driving SAF adoption.
The conversation covers crucial topics, such as the company's advanced book-and-claim system, designed to streamline SAF adoption by enabling customers to claim carbon reductions without physical fuel movement. They also discuss Avfuel Zero, a comprehensive sustainability consultancy helping aviation clients navigate offsets, emissions assessments, and compliance without requiring an in-house sustainability team.
We explore the vital role of corporate responsibility in driving the adoption of SAF, especially among business and general aviation stakeholders. Discover how larg operators serving corporate clients are leading the charge, motivated by public scrutiny and the need to demonstrate proactive environmental stewardship.
For industry professionals interested in SAF distribution, supply chain optimization, and the complexities of SAF blending to meet ASTM specifications, this episode offers essential insights into the current state and future development of SAF infrastructure in North America and beyond.
If you enjoyed this episode, check out our other discussion with Mac Irvine from Jet Zero Australia, as we dive into the SAF production landscape down under: https://www.buzzsprout.com/2202964/episodes/16017375
SAF Investor London - January 2025
SAF Investor London will be back in London in January 2025 and will bring leading producers, investors, customers and policy makers together to discuss the major issues around scaling SAF production globally.
We would love to see as many of you there as possible and you can find out more information, including book your tickets here: https://www.safinvestor.com/event/145508/saf-investor-london-2025/
Hello and welcome to another episode of the SAF podcast. This week I'm delighted to be joined by CR Sincock from Avfuel. Now I'm going to let CR explain what Avfuel is, because you're going to have a much better understanding of it than I do. But we're going to be looking at broadly today, fueling and one of the many strategies that AvFuel have got in place to take advantage of the growth in sustainable aviation fuel currently and looking forward into the future. So, cr, how are you? I'm doing great Oscar forward into the future.
Speaker 2:So CR, how are you? I'm doing great. Oscar, Thanks for having me.
Speaker 1:Pleasure to have you. So before we get into your SAF-specific strategies, ongoing strategies, do you just want to explain to people who aren't necessarily familiar with AvFuel what AvFuel is, sort of how it started and sort of the role it has, sort of, in the US currently?
Speaker 2:Yeah, absolutely. You know AvFuel is one of the largest suppliers, wholesalers, traders, marketers of aviation fuel globally we have, you know, our sort of history is focused in what a lot of people call the general aviation or business aviation sector in the United States, but the company has grown far beyond that now to where we supply basically every aspect, every sector of aviation. So airlines, government, military, still business and general aviation is a huge, huge focus of ours and we're in, you know, 100 countries around the world where we sell fuel. I would say you know we still have focus areas in various regions, including North America, western Europe, but you know we're active in a lot of markets, anywhere where airplanes need fuel at airports, and then all the ancillary services that come along with that, everything you could imagine, from insurance to refueling trucks, to fixed-base operations, to transaction processing, so everything aviation fuel-related.
Speaker 1:So, talking about SAF specifically, you guys are one of the leaders, or if not the leader, in business aviation and volume of SAF delivered, and that's in large part thanks to your partnership you've got with Neste. So do you just want to take us through? You know how much SAF are you delivering and what is that partnership with Neste look like.
Speaker 2:Yeah, absolutely. You know Neste is the largest producer of renewable fuels broadly, you know, globally, and specifically when you get into SAF, they're the largest global producer of SAF and have been, have held that position, let's just say for you know, a number of years now and so natural partner, you know, for AvFuel to look to align with, I mean it's you know Neste is a leader in their field, avfuel is a leader in our field. So you know it makes a lot of sense and what we are is essentially the branded, you know, marketer, distributor etc. Of Neste's SAF in the United States and we do things with them in other geographies as well. But obviously the United States is a very large market and so we are able to actually move that product to a few dozen airports already in the United States.
Speaker 2:So it comes in largely by ship, comes into the coast.
Speaker 2:I mean, as you might guess, by ship comes into the coast. I mean, as you might guess, california, due to incentives and interest, is, you know, where much of it comes in. But then you know that only gives you easy access to a few large airports on the, you know, right on the coast, like an SFO or something which is where you know, of course they do drop off quite a bit of the fuel, but the question is, how do you get it to much of the rest of the country and many other aviation customers? And that's where we step in as Neste's partner and help them move it to all those locations. And you know, our volume of SAF has honestly been growing exponentially, and I don't say that word metaphorically, it literally, you know, sort of every year has been a multiple fold of the prior year. You know, from hundreds of thousands of gallons to millions of gallons, to where we're now on track for double digit millions, kind of going forward Right. So that's kind of at a high level, the partnership that we have with Neste.
Speaker 1:So that's kind of at a high level, the partnership that we have with Neste and you mentioned California specifically with all their incentives. There are other producers active sort of in that region. You've got World Energy, who have got their paramount facility, and then you've got Montana Renewables, not too far away, also on the West Coast. So in that sense, why Neste and not them? What did Neste bring to the table that necessarily the others didn't at that time? And are you considering broadening out into looking at other producers, sort of in due course?
Speaker 2:No, it's a great question and you know, I think, at a very, very high level, a lot of it just gets down to volume of supply. I mean, again, you know Neste, you know AvFuels, as I mentioned, we're the largest suppliers of aviation just in general. You know we represent, you know, a quarter plus of the branded FBOs in the United States. We touch about one in every three business jets in the air. We supply basically every airline and so in order to reach that kind of scale and scope of aviation customers, the reality is Montana Renewable is exciting, but just getting started a small volume. Obviously they'll grow in the future and it's gonna be very exciting. You know world energy. A lot of their capacity goes to the diesel, to producing, you know, biodiesel products. Sap has been, you know, a relatively small volume. I mean not I don't want to say small, but I just want to say compared to Neste's say, it's been a smaller focus and a smaller volume. And so it just made a lot of sense to access the kind of quantities and scope and scale of supply that we knew we were going to need to sort of satisfy our footprint. It made a lot of sense to partner with Nest Day Now to address your follow-on question are we planning on expanding? Absolutely, I mean, and I think that this is something that you know in the early days, I mean, look, staff is. It's been a boutique product. It is going to continue to be in some ways a boutique product in the years ahead.
Speaker 2:But supply is growing, it's maturing, um, and obviously, geographically we can get into that more as you you know you want to it.
Speaker 2:It makes sense to have more and more supply points, right, and it's only realistic that any one producer of the SAF is going to cover only so many geographic supply points.
Speaker 2:And so something that we're excited to announce just now, basically, is that we're a launch customer for Valero Diamond Green in Florida. So you know, that's just, I think, a good example of. You know, both the kinds and quality of partners that we're aligning with and also just the reality of the fact that SAF supply needs to mature beyond kind of a very, very I call it limited supply chain, right, that only allows it to reach easily a certain set of airports. So, yes, we'll continue to expand to additional partners. We welcome all supply partners. I mean, if you look on the conventional jet fuel side, on the fossil jet side. I mean you know we buy from I mean dozens, probably 100 different refineries, right. So we have a robust set of partners and I think that eventually SAF will reach that situation. It's just that in the beginning it's been made a lot of sense for Neste to be that launch partner because of their scale.
Speaker 1:You mentioned a couple of things there that I want to get into, but I think the most sort of obvious one that I think people be interested in is the Valero diamond green thing. You very sneakily just snuck in there very low-key, didn't sort of not a lot of fanfare to that. Can you sort of flesh that out a little bit? Just give us a bit more detail about sort of what that looks like?
Speaker 2:Yeah, absolutely. I mean you know Valero. Diamond Green is another. You know, obviously you know sort of a Valero refining major that has, you know, aligned themselves, partnered with Diamond Green and another Heffa producer, right. So another you know, same similar technology, let's just say to Neste, to World Energy, and we can talk about that.
Speaker 2:You know, at some point, if you want. I mean, that's sort of Heffa is going to be the dominant technology for a while. But you know we'll see some others coming online and you know Valero is bringing their you know incredible capabilities over water on ship or production has been, you know, west Coast, specifically California. You know a little bit being brought into Texas here and there kind of ad hoc, but you know we're kind of neglecting the you know the entire East Coast, right, which is, you know, a massive market. You know generally, you know massive market for business aviation with Valera, diamond Green is going to be transformative in terms of access to physical SAF and being able to get it to customers without some kind of a heroic and, frankly, inefficient logistical supply chain.
Speaker 1:One of the other things you've mentioned is sort of the debate between sort of producing renewable diesel, producing SAF, how some people are producing both. Is that a consideration that you think about when you're looking at arranging these partnerships, whether they're sort of going to be flipping between the two as producers?
Speaker 2:Yeah, absolutely yeah. That's absolutely something that you know has informed our, you know our choices in the past and in the future. And look, I mean I understand as a business person. I mean if I'm running a facility that can easily flip and I sort of have a very limited capacity and I have to decide what to make right, I mean I'm probably going to make the things that I can earn the greatest return on right, and so that makes a lot of sense, and so I don't blame anyone for making that choice.
Speaker 2:So it is important to look to partners that have sort of said we have a very specific mandate, goal, facility allocation, that this is going to produce SAF.
Speaker 2:Because as we scale the amount of SAF in the aviation industry, you know it needs to be something that feels sustainable, not to use a too much of a pun, but I mean it needs to be something where the you know the growth is building on each other.
Speaker 2:You know, year by year it's continuing and it's not sort of you know starts and stops, right and so, and so, yeah, look, and I, year by year, it's continuing and it's not sort of you know starts and stops, right and so, and so, yeah, look, and I think all these producers I mean again I think World Energy is going to grow their production of SAF. I think you know Montana is going to grow their production. But you know it's just, it's just good to see these large players in the industry, like a Valero, step in and say, hey, you know, valero obviously has an enormous amount of capacity. So for them to be able to produce a certain amount of SAF is kind of not dedicate a certain amount of their production capacity to SAF is. You know it's a great signal for the industry that you know there is. You know that there is that SAF production, in this case on the sort of East Coast, is here to stay.
Speaker 1:So you've mentioned the challenges of moving physical molecules, of SAF, so I just wanted to find out you know, where do you currently offer SAF right now? And obviously, with this new agreement signed, that this will open up vast new locations but where are you at right now in terms of your physical supply?
Speaker 2:Yeah, absolutely. I mean we're at. I mean just to be honest, we're at dozens of airports, which is which is, I think, really what you know. Nestle has looked to us in our partnership. That's a lot of the value we bring. Is reaching you know many airports they wouldn't otherwise reach. Is reaching you know many airports they wouldn't otherwise reach. Reaching segments of the industry, meaning you know general aviation, ad hoc. You know cargo carriers, testing, oem. You know those are all the segments we've helped them reach. But you know a lot of these are naturally what you'd expect.
Speaker 2:On the West Coast, I mean we have a fuel finder on our avfuelcom website that can be used to find SAF locations. But you know, I mean they range from. I mean just picking out some random examples. You know Monterey Jet Center in California. You know Sonoma Jet Center in California. You get into sort of the mountains. I mean there's Truckee, tahoe, which we can actually talk about as 100% SAF in Tahoe, which is an interesting case study. You know we have Telluride.
Speaker 2:We have a lot of Atlantic locations that have SAF. You know ACI Jet Millionaire, burbank, del Monte, you know. So there's Hillsboro Aviation. There's many, many. You know locations that we are supplying SAF to, but really they're mostly in, you know, in the West Coast. I mean, there are specific examples where we will move loads of fuel further across the country and the reality is it's actually still savings on carbon even with trucking, and you can also buy offsets for the trucks and things but it's clearly not the best solution. So even for some of the larger chains, like where we're supplying large amounts of the Atlantic locations it tends to be the ones on the West Coast. But there's obviously solutions to solve that, either with new supply points opening up, like we discussed with Valero Diamond Green, logistical options like pipelines We've worked on those with Neste and I'm sure we can work on them with other producers of SAF and then, of course, kind of book and claim type options.
Speaker 2:So I'm sure you'll probably want to talk about some of those things at some point why a hundred percent at tahoe?
Speaker 1:because to people not in the us it seems like a pretty sort of you know why not, you know why not la? Or like a big hub. Or is tahoe a bigger hub than people actually give it credit for?
Speaker 2:I think, I think it's always, you know, just dependent on the local environment, right, the community, the politics, the goals of that airport, right, I mean, I think you know, I mean, look, tahoe is clearly a pretty large leisure vacation destination, right, I mean, it's sort of a favorite place for a lot of the tech community in California to go vacation and a lot of those folks are, you know, very environmentally conscious and I think the community of Tahoe, you know it's very beautiful community and I think that you know it's an area where they're probably very cognizant of environmental impact and you know the airport got to give them a lot of credit.
Speaker 2:It's taken a leadership position there to say, hey, we're going to be 100% SAF and it's probably easier, frankly, to do that than at some I mean, you can do it at some giant hub airports, right, I mean. But I mean that's a massive undertaking in terms of the amount of SAF required and we're getting there. We're getting more and more towards where the amount of production could support, towards where the amount of production could support, you know, a few hub airports being a hundred percent SAF.
Speaker 1:But it's, you know that's, that's a lot of SAF, that is a lot of SAF. If you're talking, you know that's a lot of, that's a lot of fuel. It's come up a few times about moving things sort of, where you've got locations, the fact that a lot of them are west coast and a lot of the discussion around sort of how you can get the benefits of SAF without having access to the molecules as in book and claim and along with your many suites of different businesses that you guys sort of brands, that you guys run. You have your own book and claim system that you're sort of operating. So how does that work and sort of can you talk us through sort of the registry side of things as well in terms of the transparency and all that stuff, Because that's a really hot topic at the moment in terms of doing book and claim but doing it properly?
Speaker 2:Yeah, absolutely so. I mean we are. Yeah, absolutely so. I mean we are, with our book and claim. We're actually in a position to, you know, to sell, book and claim SAF on any airport. So it's really, it's really kind of an incredible way to increase the uptake of SAF. And you're exactly right.
Speaker 2:What's really important in any book and claim system is, you know, at its core it's very simple, but you know it's always in the details of things. You know, at its core it's you book the SAF into one location, in this case somewhere where there's lots of supply, which is probably California, but in the future it's, you know, going to be other places as well and then you claim that credit somewhere else where it's difficult to get the SAF. And we refer to these as neat SAF attributes, but everybody calls it something slightly different. Essentially, what it is is just the right to claim the environmental attributes for a gallon of SAF. Let's just say, right, and if it's put into California and you want to use it in Ohio, you know, then you can't claim the environmental attributes on that gallon in California, but they're claimed by the person in Ohio that pays for them instead. And that you know. And at its core. That's, that's really what it is. And in order for that to be a process that's, you know, trustworthy and have integrity, you just have to make sure that you're not you're not double counting. And so you know we have an internal system where we do exactly that and we actually have some quite large customers that are using this system. I can't get into the exact details of who, but you know we've gone through like a lot of work with them to get them comfortable with this process and, honestly, it's just like any other product that Avfuel puts our name behind. I mean customers trust that you know the fuel we deliver meets, you know ASTM standards and is, you know, jet A, and they trust that you know when we send them our invoices, those are correct and you know, and so this is you know. This is no different than that. I mean we, you know we, you know we're putting our entire you know company and brand and integrity behind behind this system right, and have every incentive to want to make sure that it's robust and correct and there's no double counting, because that's what incentivizes people to continue to use our book and claim system and, honestly, it's growing quite rapidly. I mean we're currently on a run rate of doing millions of gallons of SAF with book and claim, and I think that'll be, you know, even more, and probably crossing into double digit millions and not that long.
Speaker 2:And so you know there are, as you mentioned, a number of sort of people call these registries. But the challenge is, I mean there's a lot of them. You know it'd be one thing if there was one registry and everybody could kind of agree, hey, you know, we're all going to put this on the you know IATA registry or the COSAFA registry, and everybody could kind of agree, hey, you know, we're all going to put this on the you know IATA registry or the COSAFA registry, you know, or the Avelia registry or the. You know, I mean these are all and I mean these are all great registries.
Speaker 2:But the reality is there's many of them, in fact there's more than 10 that we're aware of. And so you know, like that we're aware of. And so you know, like we have customers that A don't really care about the registry, they just care that the book and claim is done correctly. They can see the audit trail and we provide visibility into that for our customers where they can look and see kind of the. You know the whole process of the gallons being booked and being claimed and we have a portal that we're going to be rolling out more broadly, coming forward.
Speaker 2:And then there's other customers that say, you know, yeah, we want this specific registry or that specific registry. So we kind of have to be in a position to say, look, we're going to provide the SAF, we're going to do the booking and claiming of it for you and invoicing and providing you that transparency, and then you know, if you want to use a particular registry or you want us to, you know, register it on that one and you know, so be it Right. But the reality is right now no one agrees on which registry is the best one to use. So that's kind of how we are, you know, working with this right now, but I think it's it's. It's honestly working great and as soon as people understand it it takes a little more work to get people to understand it Then there's a lot of beauty in using this process. So there's.
Speaker 1:I mean there's an absolute requirement for there to be a standardized taxonomy of you know what terms refer to it. So it's basic, as you know what terms refer to what. What's an incest certificate book and claim? You know you speak to different people, there's various nuance to their answers about it and then, as you said, there's multiple registries. Getting the transparency is not a simplistic thing and actually the sooner that happens, the more engagement you can actually again terrible pun sustainably bring to the um, to the to the user itself because they understand it and they can understand it if they choose to correct yep so and on that you've got a program called av fuel zero yeah so what's that?
Speaker 1:how does how does that help with this sort of clearing up of confusion that people might have when they come to trying to fly sustainably?
Speaker 2:at fuel zerouel. Zero is, you know, I like to think about it as essentially the consulting arm for sustainability at AvFuel, and you know one way to kind of think about it as well is, you know, avfuel provides a whole suite of products, as you said. You know we have lots and lots of fossil jet right, that's our bread and butter. But we're obviously transitioning to selling a lot more SAF and we think that's going to continue going forward and become a larger and larger share of the fuel we sell Physically. We can do book and claim, as we just described, and are doing a lot of book and claim. We can sell carbon credits and have sold many, many carbon credits. We have insurance, the list goes on and on, and so certain customers will come and they'll know very specifically what they want. So if you have, let's say, a large airline, or let's say you have a very large fractional operator of business jets, or you know these companies are large organizations, they probably have a sustainability department, they probably have a procurement department right, they probably have. And so they'll come to AvFuel and they'll say, hey, look, we're looking for SAF with this blend in these airports, or we'd like, you know, this amount of book and claim at these locations, or we would like carbon credits to cover, you know, this amount of flight activity. That's sort of one I guess I would call it very sophisticated kind of larger type of customer. But then you know, there's also a lot of customers that are very sophisticated in other ways, in their operations, in their leadership of, you know, whatever sector of aviation they're in. But you know, sustainability is one of many, many things that they are tasked with doing, right, and so their owners, investors, c-suite customers, whatever, said, hey, you guys should figure out how to be a little bit more sustainable, and that's like one more thing on their long list of things to do, right. And so AvFuel Zero is really a way for us to.
Speaker 2:You know, we break it down into simple steps. It's pretty self-evident, right, it's assessed. So, assessed, you know, let's say it's an operator and they operate let's say it's a flight department or a management company, right, or something of aircraft, and they assess and they operate 10 aircraft or 20 aircraft, or, you know, whatever it is. So we'll assess the emissions. You know how much are you flying, what are the hours, what kind of planes. You know what kind of emissions are you are you working with here.
Speaker 2:Ok, then let's set targets, like as an organization, realistically, like what do you want to, what do you want to offset, abate? You know what are your goals realistically. And then we'll sort of come up with a few options, right, a menu of, ok, you know, you can, we can get you to this goal at this price, using you know these tools, right, and those tools are going to be the ones you would imagine. It's going to be physical, saf book and claim SAF, carbon credits, you know, et cetera, et cetera, right and so.
Speaker 2:And then we will report for that customer and provide them with you know, things that they can deliver to their stakeholders again, their C-suite, their owners, their customers, and then we'll audit and we'll just make sure that they're following through on those various commitments etc. Right, and so that's really in a nutshell. It's for customers who are looking for more help in the whole process. They're looking to understand regulation, they're looking to understand the options they have to offset their emissions. They're looking for a kind of full service solution that doesn't require having an entire sustainability department, right, or you know somebody at their company dedicated to that, right? So it's really just a way of unifying all the offerings that AvFuel has for sustainability and putting them into a package that is very user friendly and step by step and allows people to kind of move along this sustainable journey.
Speaker 1:And you know we've found some great interest out there from folks that are looking for that. Because there's so many options it can be overwhelming and confusing sometimes. I hear that potentially is being left behind in the SAF discussion is the work on supply chain and the logistics of moving SAF, or being able to just support airports having enough facility to, you know, blend SAF or whatever it may be. Do you think there's enough discussion going on to solve those problems? Do you see that? Obviously you guys are sort of working on it very actively within the sectors you're active in, but do you think there needs to be more industry-wide discussion on that?
Speaker 2:I do for sure. I think that a couple of years ago it was almost comical how little discussion and concern there was for that. And then people kind of realized, oh, all this SAF, all this neat SAF, has to be blended. And then they realized, oh, you can't just blend any random fossil jet that comes out of any random refinery with the neat hefa product and have it meet ASTM spec.
Speaker 1:You know, I thought you just put it in a blender and just sort of let it go, and then it was all good to go.
Speaker 2:Yeah, yeah, yeah, yeah. No, I mean that's. That's what's funny, that's what I think a lot of us thought. Right, but it's.
Speaker 2:I mean, the reality is, you know there's, even though jet, you know, even though all jet that goes into an airplane meets ASTM spec. It's not like ASTM spec is one number, right, astm spec is a range and you have to be inside the range and when you start blending, if everything is all on one edge of the range, then when you blend it all together, the blend might not be in the range, right, and so basically, you've got to be careful about that. You have to have the right facilities to do that. You have to think ahead about the type of product coming out, where it's going to kind of come in on the various test metrics and then how the blend is going to look. So yeah, I mean that has been an issue that we've seen with a number of producers as they've tried to get up and running is just not fully thinking through the blending, having that kind of be an afterthought, and then, beyond blending, you're also just looking at, again, logistics. We've touched on this some during our chat here, but I mean, right now there's kind of this problem with so much of the production being California and West Coast, either import or production in California. You know obviously Valero Diamond Green opening up is going to help with East Coast. But also you know we've started looking at pipelines. I mean we've done work now on the pipelines moving Neste product from the Gulf Coast up to Chicago area on the pipeline, so that kind of unlocks other large market potentials.
Speaker 2:We're looking into rail, we're looking into a variety of different logistical options, because you know the reality is at some point in, you know, whatever name it 10 years, 15 years you know there's going to be hopefully many supply points for SAF and it will look much more like fossil jet where you know kind of every major region of the country there's multiple supply points you can pull from right. There's refineries, there's terminals off of pipelines, there's terminals off of the ocean. But that's not where we are right now. There's a very, very limited number of supply points and so there is a lot more thought that has to go into how you get it to all the various regions that may want to consume this product and that's again that's largely where avfuel comes in. I mean, that's our, that's our expertise, that's our bread and butter right is is moving product around, getting it efficiently and safely to locations it needs to go, and, and so that's why we're working very closely with all these different producers to help them access the various logistical options and get it to the end market.
Speaker 1:Do you think that's the biggest challenge preventing global commercialization increased availability of SAF or do you think it's just part of the great many solutions that SAF has to arrive at in order to actually scale and become a truly global fueling option?
Speaker 2:I think it is one of the several options, I think it's certainly one of the key ones. I think other challenges which, by the way, the industry is overcoming but it's just, it's a process, right, like anything, it's way the industry is overcoming but it's just, it's a process, right, like anything, it's not something that just happens overnight is, frankly, just the monumental nature of the undertaking of displacing, you know, this massive transportation fuel with a new fuel. I mean a fuel that ultimately ends up meeting the same end spec, but obviously that has entirely different feedstocks and processing technologies, right? So you know, that is just. You know the reality is we are at a you know we are currently at a very, very, very small percentage of you know, whether you look in the United States or whether you look globally of jet fuel. You know demand that is being satisfied by SAF and it's been growing. In fact it's growing very rapidly, as I mentioned. Right, but it's growing off of a very small number.
Speaker 2:And so just the sheer quantities to go from you know where we were at literally fractions of a percent, you know in the past years, to where you know maybe you're crossing a percent and then you're, you know, looking to try to get to 10%. I mean going from one to 10%. That, like we're talking, like the number of, you know, billions of I mean of gallons, right? I mean this is the amount of production here is huge and you know, to do that, there is an enormous supply chain of feedstock that has to be secure. There's an enormous amount of just refining capacity. There are production capacity that has to either be built or retrofitted. You've got to convince the financial industry to back all of these projects.
Speaker 2:So you know, I think, that there is, just like any industry that's going through transformation, there's an enormous amount, like any industry that's going through transformation, there's an enormous amount of just capital that has to be deployed, projects that have to get across the finish line, and so, yeah, the logistics is a key part, but there's several other challenges that the industry is working on.
Speaker 1:I think one of the other one of the ones that we talk about and the clues in the name SAF investor is the financing, and it's just a monumental challenge to get financing for these projects. But that's a but. You're equally, you're not just involved in the fueling side. You guys are actually investing Early stages in people developing new technologies to bring new feedstocks into the market and bring new technology pathways through certification and into production. One of those is that you've invested in is older renewables. The other one's, air company. Older renewables is doing wood waste and creating older bioude and then refining it that way, and then air companies doing power to liquid. Can you go through the decisions around why you invested in those two companies and can you tell me, did you choose air company just because of the vodka?
Speaker 2:Absolutely. Yeah, the, the, you know, really, our strategy is fairly simple. I mean it's, it's. Look, HEPA is the dominant SAF production technology today. Valera Diamond Green, so, and those are.
Speaker 2:I mean it's mature. I mean it's not as mature as fossil jet fuel is, but it's, you know it is producing millions of gallons from multiple different refineries, Right? So this is not a technology really where let's call it venture capital is required, Right? I mean this is a technology that is, you know, being undertaken by large public corporations, you know that are doing this. So there it makes the most sense. I mean, AvFuel doesn't have a lot to. You know, what we have to bring is our capabilities in downstream, our logistical prowess, our ability to put together these, book and claim products to help customers, you know, purchase it when they might not be able to physically get to it. That's where we have a lot of value to bring with a partner like Aneste, with a partner like a Valero Diamond Green. When you start talking about the future technologies, you know they're still early, but they're going to be very required. I mean, I think it's, and when I say that.
Speaker 2:I mean just literally, like there's not enough feedstock for HEFA. Like I mean, I think that I, you know, I don't think that anyone that's knowledgeable about the space that you would talk to would say that, oh yeah, there's, there's enough, you know, fats, oils, greases, tallow that we can reasonably collect and move, the tallow that's being used is because that is an existing industry, right, and so obviously it's good to use the waste product from that for a, for a good purpose, right, which is making SAF. But it's like there's only so much of that and there's only so much that you can get to easily. And you can get to, you can reasonably move it and clean it and put it into a facility. So there's going to be a limit, and we've already seen the prices of feedstocks for HEPA go up. Can that help us scale to 5%, 10%, maybe more of displacing global demand? Yeah, you know global demand, yeah, you know, but but it's not going to get us, you know, the majority of of of of global jet fuel demand displaced, because global jet fuel demand is actually, you know it's growing, it's not shrinking, Right and so, and so we need these other technologies. So what we've gotten and we've said, look, we're just going to kind of identify companies that we think are leaders in their respective technology pathways. I don't think this is going to be a winner-take-all industry. It's too big of a market right, and so I think that many different companies are going to win. Many are not going to win, unfortunately, just because it's so hard to do what they're doing, but I think many will win. And so we think that, again, in kind of the wood waste and waste grass which are the primary feedstocks you know for alder, which then goes into a advanced pyrolysis oil which then can be coprocessed or it can be refined or hydro-treated, you know, that's like a huge unexploited kind of you know which frankly actually piggybacks on a lot of existing technology, because pyrolysis is an existing technology, it just needs to be upgraded, and then coprocessing and refining is very kind of straightforward with some hydro-treating. So that's kind of a niche that we think is valuable.
Speaker 2:And then power to liquid ultimately, we believe, is like sort of long-term probably the solution, or at least a key part of the solution, simply due to the fact that these facilities are kind of ultimately and scalable in an unlimited way. I mean, you can, you know there is carbon dioxide everywhere you look, you know, and these are highly modular facilities that have trains that run in parallel, and so basically you can put them anywhere. You have a source of carbon dioxide, which is from kind of any industrial process that has exhaust Right. And then you need a source of electricity that's not basically coal fired or something that's just going to defeat the purpose like plugging your Tesla into a coal fired power plant Right. So you need you need wind, you need solar, you need hydro, you need nuclear, depending on the sort of politics of the country you're in and so very, very scalable, effectively unlimited feedstock, deployable kind of anywhere. And you know, is the current cost today higher than other? You know types of SAP technologies? Yeah, but I mean, like anything, every technology has a cost curve, but what they're doing is physically already a reality. Fuel has already been produced.
Speaker 2:If we get into air companies specifically, just very briefly, yeah, it's really interesting. They started, as you said, as more of a consumer business. Their products were more consumer to start, and then they realized the market, like vodka, Right, and they realized the market for for jet fuel, specifically for SAF was and other transportation fuels, but specifically jet fuel was just so much larger that it, that it almost made the other thing, you know, not uninteresting, but just maybe not their their number one focus. And what's amazing about air company is, you know, like every other major competitor in the space is using some variation of Fisher tropsch process which has been around for 100 years. It works, but it's very, very energy inefficient.
Speaker 2:Without getting too deep into the technical details, there's a two-step process that has to take place to go from kind of a carbon dioxide to an end fuel product. This is as compared to air companies technology, which is a one-step process, and in the sort of the details of that process they end up saving about 50% of the energy. So to produce the same gallon of SAF, they're requiring roughly plus or minus about half the amount of electricity as kind of all the other processes that use some variation of fissure tropes. And so I mean that electricity is their main feedstock, because carbon dioxide is effectively free I mean it's an exhaust, it's a pollutant, it's a waste and so electricity is the main cost. And effectively, if you can have electricity, if you only need half of the amount, it puts you in a much better position to produce the fuel at a reasonable cost. And so that's what drew us a lot to Air Company as an investment in that technology.
Speaker 1:So I think they've made a mistake. So I'm not sure the vodka business is that much smaller than the jet fuel business.
Speaker 2:Oh, trust me, I've had some of the vodka. It's, it's, it's amazing, it's good Cause it's like it's hard to even. You know, when you describe to people, you're like they're like, wait a minute, but like did like, is this, is this real vodka? I'm like, yeah, I mean, vodka is just ethanol. You know, it's just pure ethanol, and normally it's distilled from a right I mean potatoes or whatever it's made from, I don't even know, but in this case you're talking about a grain, but here it's literally synthesized, right, and so, like the end product, you're actually making a pure vodka than you can make by distilling down things with the traditional process. So no.
Speaker 2:I think. Luckily, I don't think they're planning on abandoning that. I think they're planning on growing that business too. So don't worry.
Speaker 1:That's good news for aviation lovers and vodka lovers alike, so that's a double win. So you we've said before that you are supplying SAF to FBOs and airports, but and also you go to OEMs and help open up other links for producers that they might not necessarily have had access to otherwise. Where are you seeing the biggest uptake for SAF over sort of the different sectors that you're delivering it to, making it accessible to?
Speaker 2:Yeah, we are seeing the biggest uptake among fractional operators and sort of we'll call it like Fortune 1000 type companies. Certainly, there are certain airlines that have taken a leadership perspective on SAF, but it's tough, right, because I mean airlines, at least historically, have a fairly narrow operating margin. And you know SAF is expensive, right, it's more expensive than fossil jets. You know SAF is expensive, right, it's more expensive than fossil jets. So sometimes, in some cases of airlines, it's very they put their money where their mouth is, and in other cases it's challenging because it's very expensive, right, and so.
Speaker 2:But if we get more into sort of I'll call it business or general aviation, really it's been the fractionals, the large fractionals and the Fortune 1000 flight departments. And I think the reason is pretty straightforward and it's kind of similar, which is, you know, the Fortune 1000 flight departments they're public companies, they're reporting, they're financials, they're having to put out annual reports and statements. Those reports have an environmental or ESG component to them, right, and so they have a bunch of stakeholders that are basically, you know, major investors, other stakeholders, that are sitting there basically telling them like, what are you doing for the environment, right, and how responsible are you being?
Speaker 2:And you, know, for better or worse.
Speaker 2:You know, corporate flight department certainly is one that probably draws quite a bit of attention, as we've seen in recent years, right, and so these companies kind of need to right it's sort of a cost of doing business for them that they need to get ahead of that and show that they're being very proactive, that, yeah, their flight department is a tool, which it is to allow their executives to run these massive, sprawling businesses efficiently. But they have to show that they're doing that in a responsible way, and so the way they do that is say, look're, we're leading the charge and adopting SAF. And then the large fractionals, for I would say, you know, related but slightly different reasons, which is just that, you know, these are also the household names that win sort of people outside of the outside of our industry, right, people that are not going to the base convention next week in Vegas. You know, when they hear about people flying on private jets or hear about business aviation, right, they often hear about these fractional companies, right, you know these are in the news.
Speaker 2:They're in, you know, magazines and newspapers, and so you know those companies also, you know, have a strong interest in making sure that they also are being seen as proactive in this endeavor right and sort of saying, look, we are going to step up. You know many of these fractional operators own, you know, dozens, many of them own hundreds right of business aircraft, and so you know, I think they have a vested interest in making sure that they're seen as being very progressive in SAP adoption and so we're helping them and these are some of our, you know, largest partners in growing SAP supply.
Speaker 1:And by fractional. For those that aren't familiar, there's people like NetJets, FlexJet, those sort of large companies, Exactly those sort of types.
Speaker 2:Exactly. Yeah, I mean without getting into details of exactly who and exactly the nature of our relationship it's those types of operators exactly.
Speaker 1:And equally, it's funny how you talk about there being a combination of people looking. So it's, the corporate flight departments are doing their scope three emissions, and then you've got the fractional operators doing their scope one emissions. But then, if you take NetJets as the example, berkshire Hathaway own NetJets, so then they've got their own scope three emissions related to NetJets is the example, berkshire Hathaway own NetJets, so then they've got their own scope three emissions related to NetJets activities. So there becomes this chain of emissions that people are trying to obey and the conversation is moving to more and more people who need to abate their scope three emissions, three emissions. These sort of corporate customers can play a much stronger role in showing this long-term demand signals, as opposed to just relying on these. As you say, airlines, who are sort of a few of them, have taken strong advocacy positions. There's a lot more and a wider scope of people that can actually tangibly contribute to this to SAF.
Speaker 2:Absolutely, and I wouldn't say that. I think we've got to be careful to say that it's not like these business operator, business jet operators have unlimited willingness to pay, but they have a bit of willingness to pay, you know, I mean it's, and perhaps a bit more than certain airline customers, just because of the nature of the clientele they're flying around, right, and the nature of, you know, the clients are, their customers are paying to fly in a private jet, right I mean? And so that already is a certain demographic of customer that has a slightly different willingness to pay. That said, you know it's not unlimited because ultimately all of these different fractional and management companies have to compete with each other, right, and so, like, if one person all of a sudden has to charge dramatically more for their flights than someone else, it doesn't make any sense, right, and so that's why, like the whole industry, I think it's moving in steps and I think that's fine, that's how it will continue to move, and luckily a lot of these steps are are quite large.
Speaker 2:You know, again, as I've said, we've gone. It's been exponential growth year on year in terms of SAP sales, and but it's like, as everybody gets to I mean, I'm just using these numbers figuratively, like a whole category of customers you know, they're all taking about about 5% of their fuel is SAP and they're all taking about 10% and they're all taking about, you know, 15 and 20. And so, like their relative, you know, competitiveness can stay, can stay in check while they continue to make progress against sort of certain sustainability goals.
Speaker 1:So one final question, which will end on a nice sort of positive activist notes what, what do you think is the greatest opportunity for SAF, like sort of if you think sort of next, sort of five or going towards 2030, because that's sort of the date that's thrown around and then sort of beyond there towards 2050.
Speaker 2:Yeah, I think the greatest opportunity in the next few years for SAF so leading up to 2030, is continuing to, as we talked about a bit earlier, really improve and think through the supply chain and logistics. It's going to be opening a few more key facilities, which are going to be primarily HEFA, but we may see a few other technologies, like some alcohol to jet, et cetera, and really utilizing the full range and suite of logistics options of pipe rail to be able to get SAF to a much broader swath of locations, cost effectively and carbon effectively. I think that is the biggest opportunity there, along with, you know, some continued adoption of book and claim. And then, I think, as you go beyond that, let's sort of say, in the 5, 10, 15 year horizon, and then obviously ultimately leading out to the 2050 goals of far in the future, ultimately leading out to the 2050 goals of far in the future. There it's all about the opportunity of these new pathways and new feedstocks to really come into their own right and I think that we will see that for sure.
Speaker 2:I mean again, many, if not all, of these technologies work on a scientific level, right, but the question is, as you referred to earlier part of the name of this podcast. Staff Investor. The financial markets have to get more and more comfortable with these projects working and the operators have to get more and more comfortable with operating these projects and building these projects. Know the demand signals have to continue from the airlines and from business aviation, and so you know. But I think that ultimately, that's where the biggest opportunity is going to be is the maturing of these various other technologies, whether that's power to liquid, whether it's biomass, you know, whether it's other types of uh SAF technologies out there.
Speaker 1:Amazing CR. Thank you so much, um for your time. That was, that was amazing.
Speaker 2:Oscar, thank you, it's been. It's been really fun chatting.
Speaker 1:Now, if you enjoy the podcast, the conference is coming back, which is basically like the podcast, but with many more people in the room and it's over two days. There's networking and there's all the key discussions about what's going on in the SAF industry, very, very focused on how more capital can get into the SAF industry. It's running in London on the 28th 29th of January, of January 2025. I'll put a link in the description for the podcast so you can have a look and get your tickets to attend. It promises to be a fantastic event, so look forward to seeing as many of you as possible there.