Ecoceres, a startup from Hong Kong, produces sustainable aviation fuel (SAF) from animal fat and used cooking oil. It aims to enhance its production capabilities significantly by 2025, potentially becoming a leading SAF supplier. The company is responding to the aviation industry’s push towards sustainability and net-zero emissions targets, with ambitious goals and innovative feedstock exploration to address challenges in the SAF market.
Ecoceres, a spin-off from Hong Kong billionaire Lee Shau Kee’s gas supplier Towngas, has achieved unicorn status by producing sustainable aviation fuel (SAF) from animal fat and used cooking oil. The company aims to emerge as a leading supplier in this sector by the end of the year, contributing to the airline industry’s efforts to minimize climate impact through the increased utilization of SAF.
Ecoceres’s SAF can potentially reduce greenhouse gas emissions from air travel by up to 90% in comparison to traditional kerosene-based fuel. The company is also exploring the conversion of alternative feedstocks to fulfill the aviation sector’s growing demand for cleaner fuel, particularly with the aviation industry targeting net-zero emissions by 2050.
Ecoceres anticipates having the highest fuel yield in the market by the end of this year. According to Chief Executive Officer Matti Lievonen, the opening of a new plant in Malaysia will enhance efficiency, leveraging palm oil waste as a key component in SAF production. The plant is expected to achieve an 85% yield rate, exceeding the industry average of 40% to 55%.
Currently, Ecoceres produces approximately 100,000 tonnes of SAF annually, but with the Malaysian plant operational by the end of 2025, production could increase to about 700,000 tonnes. This scale-up is projected to raise the company’s global market share in SAF from 20% to over 30%, based on estimates from the International Air Transport Association.
Initiated as a biorefining research project in 2008, Ecoceres transitioned into a full-fledged company in 2021. It successfully raised $108 million in a Series A funding round, followed by a significant investment from Bain Capital. As of June 2024, Towngas retains a 44% stake in the startup, which is speculated to pursue an initial public offering next year in Europe, potentially raising up to $1 billion.
As the aviation sector grapples with its substantial carbon footprint—accounting for 2.5% of global emissions—Ecoceres’s goals align well with regulatory mandates pushing for a transition to SAF. With Europe aiming for at least 2% of jet fuel supplies to derive from SAF this year, the company sees significant revenue opportunities, particularly with clients such as Lufthansa.
While SAF adoption faces challenges due to its higher costs and limited raw materials, Ecoceres is investing in diverse feedstock sources, including carinata and agricultural waste conversion technologies. Such innovations could position the company to meet the rising demand for cleaner aviation fuel effectively.
Moreover, Ecoceres is developing the alcohol-to-jet technology, which involves converting ethanol into suitable jet fuel. Lievonen highlighted that ongoing research and development efforts are crucial for the company’s success, as they aim to adopt multiple strategies for overcoming the barriers in the SAF market.
The article discusses Ecoceres, a startup from Hong Kong focused on producing sustainable aviation fuel (SAF) from animal fat and used cooking oil. As airlines seek to reduce their carbon footprints, Ecoceres aims to expand its production capabilities to meet the increasing global demand for SAF, aligning with the aviation industry’s net-zero carbon emission goals for 2050. Significant developments, partnerships, and the ever-evolving aviation regulations surrounding SAF illustrate the company’s growth trajectory and strategic planning in a challenging industry.
In conclusion, Ecoceres is positioning itself as a leader in the sustainable aviation fuel market by innovating production processes and targeting scalability to meet the increasing global demand. The company’s ambitious yield targets and strategic partnerships highlight its commitment to supporting the aviation industry’s decarbonization efforts. As the market for SAF expands through regulatory support and growing environmental consciousness, Ecoceres is poised to remain at the forefront of this essential initiative.
Original Source: www.forbes.com
