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  • Exclusive Interview with Nausher Khan, SVP and Director at Northwest Advanced Bio-Fuels
Exclusive Interview with Nausher Khan, SVP and Director at Northwest Advanced Bio-Fuels
SAF
OR CFP
CA LCFS
Wednesday, 11th December 2024
Mansift Kaur

We recently interviewed Nausher Khan who possesses nearly two decades of expertise in business development and renewable fuel projects.  We wanted to know his insights on the growth of SAF in the future, NWABF’s innovative technology and how the changes in Oregon’s Clean Fuel Program impact their SAF production. Before joining Northwest Advanced Bio-Fuels LLC. (NWABF), he played a pivotal role at NAES Corporation, expanding its portfolio from 30 projects to over 350. Since 2013, Nausher has collaborated with NWABF Founder and Manager Dave Smoot, contributing his vast industry knowledge to develop renewable fuel initiatives and handle the interaction required with senior executives from $multi-billion world-class companies. In his current role, Nausher ensures that all project components align with budget, timelines, and contract requirements, driving NWABF’s mission to revolutionize sustainable aviation fuel production.

Key Takeaways

  • Nausher Khan emphasized the critical role of building a highly experienced team and fostering strategic partnerships to ensure the successful execution of Northwest Advanced Biofuels’ renewable energy projects.
  • Northwest Advanced Biofuels leverages proven, second-generation technology to overcome SAF production challenges, ensuring higher efficiency, reliability, and scalability compared to first-generation methods.
  • NWABF capitalizes on the Pacific Northwest’s abundant forestry resources while maintaining strong partnerships with well-financed private and Native American stakeholders to ensure a stable and high-quality feedstock supply over a minimum 10-year period.
  • The integration of Fischer-Tropsch technology, coupled with skilled O&M practices from a world-class O&M, ensures optimal yields and long-term efficiency for SAF production.

Addressing Feedstock Challenges in SAF Production: Leveraging the Pacific Northwest’s Resources

cCarbon: Northwest Advanced Biofuels employs proven, second-generation technology. How does this approach differentiate you in the sustainable aviation fuel (SAF) industry, and what are its critical advantages?

Nausher Khan: Second-generation technology that is considered “proven” in the financial community who we collaborate with to fund the Project, is crucial for SAF production and is something nearly every provider must adopt because the challenges with first-generation technology are far steeper. The primary issue is that SAF lacks prior production history, unlike oil and gas or chemicals, where expertise is well-established. However, the technologies we are deploying have a vast production history in that oil & gas or chemicals industry.

Second-generation technology that is proven in the O&G industry but not the SAF industry per se, also involves carefully choosing suppliers and equipment. From a construction and engineering perspective, we distinguish between ISBL (Inside the Battery Limits) and OSBL (Outside the Battery Limits). ISBL contains the core process technologies we use—gasification, gas cleanup, gas-to-liquid conversion, and hydrocracking paraffin wax into refined products like SAF.  Having a direct experience of the Project EPC on integration of these Project technologies is a crucial risk mitigation that NWABF sought.

SAF production is still nascent, with minimal production using processes like hydrotreating fats, oils, and greases. For example, a project in Reno, Nevada, attempted to use municipal solid waste but faced multiple challenges. Success in SAF hinges on assembling the right team, configuring the plant technologies and layout effectively, and making informed decisions—areas where Northwest Advanced Biofuels excels.

We focus on ensuring process guarantees to lower investor risk. During the engineering phase, OEMs must commit to conversion yields and syngas composition, and these guarantees are tied to penalties if unmet. Our EPC partner has extensive experience in oil, gas, and chemical infrastructure, and we benefit from having an experienced team. For instance, Ravi Ravikumar, originally from Chennai, India, brings 50+ years of experience in O&G, Chemicals and Renewables with our EPC of record. Similarly, our lead process engineer has been with our EPC for over 20 years.

This expertise allows us to memorialize critical project elements—process yields, utility requirements, and industrial gas needs—early in the project and ensure they are rigorously tested during commissioning. We work with another EPC partners serving as our Owner’s Engineer, and our Technology Advisor. This comprehensive approach ensures project success.  The EPC has confirmed the Material Balances and Design Basis of the Project.

cCarbon: Woody biomass is central to SAF production. How does NWABF address challenges like feedstock variability and proximity to ensure project viability?

Nausher Khan: We do not take this subject lightly.  The challenges of feedstock supply are massive.  The Pacific Northwest offers significant advantages.   Forty-nine percent of Washington and Oregon’s forests, which represent over 40% of these States, are accessible, spanning federal, private, and Native American lands. While federal forests currently require policy support for sustainable harvesting—such as clearing deadwood and forest slash to prevent fires—we’re hopeful that will change.  Subject Matter Experts, (SME’s’), representing top names in the field of feedstock supply in the PNW, have agreed to participate with the Project to ensure the Feedstock process is handled efficiently and economically.  Again, this lowers the investment risks.

We maintain strong relationships with private forestry owners and Native American tribes. Feedstock preparation is critical for gasification, so we have invested hundreds of millions of dollars in ensuring that the feedstock meets strict specifications for composition and quality. This level of preparation ensures not only the production of high-quality syngas, which is essential for SAF production, but the volumes of syngas needed to meet the requirements of our SAF Fuel Buyer.

Leveraging Fischer-Tropsch Technology and Strategic Financing for SAF Scalability

cCarbon: Could you elaborate on the role of Fischer-Tropsch technology in creating high-quality SAF?

Nausher Khan: The Fischer-Tropsch process we have chosen, has been in use for over a century, is catalytic and critical for converting syngas into hydrocarbon chains. By optimizing reactor settings, we ensure specific yields for products like SAF, and naphtha. Using a leading industry technology supplier ensures the Project will deliver the required product that will get upgraded in the amounts expected and contracted for. This lowers investor risks.

Maintaining syngas composition is essential, as is having the right operations and maintenance (O&M) protocols in place. Even the best-built plant is ineffective without skilled operators. Having spent over 20 years in the field, I understand the importance of O&M in sustaining process efficiency. Our approach includes partnering with the best O&M providers and ensuring that operational teams are thoroughly trained to meet annual and periodic maintenance requirements.

Incentives are essentially hurdles that only the most capable developers can overcome. For smaller developers or those experimenting with unproven technologies and feedstocks, it’s incredibly challenging to create a viable project that relies on these incentives.  Banks will not finance these technologies.

cCarbon: The $600 million MOU with Infrastructure Partners—how does this support project scalability and future development?

Nausher Khan: Financing such projects involves equity and debt. For established technologies, the ratio might be 20:80, but for newer technologies like ours, equity often accounts for a larger share, such as 40:60, possibly 30:70.

Our equity investor, providing up to $600 million, or more if needed, for the equity portion of the project. Debt financing can come from commercial lenders like Wall Street or government programs like the DOE’s loan guarantee program, which offers significantly lower interest rates. The equity ensures the financial foundation needed for scalability and project execution and timing.

Navigating Evolving Carbon Intensity Standards and GREET Model Updates

cCarbon: What are your thoughts on the baseline carbon intensity changes proposed in Oregon?

Nausher Khan: The baseline for SAF is a 50% reduction compared to petroleum-based jet fuel. For instance, if petroleum jet fuel’s CI is considered 100, SAF must achieve at least 50 to qualify. Incremental CI reductions beyond this threshold earn additional incentives, which help narrow the price gap between SAF and fossil fuels. Like other states, Oregon is revising its blending mandates and CI benchmarks to align with its sustainability goals.

cCarbon: Oregon is transitioning from the GREET 3.0 model to 4.0 for CI calculations. How is NWABF adapting?

Nausher Khan: Updates have been applied to the GREET model aim to enhance accuracy and reflect stricter standards. Our lifecycle analysis is handled by a leading and world-recognized expert based in the Bay Area, who ensures compliance with these evolving requirements.

We focus primarily on Washington and Oregon, where SAF production incentives are strongest. While we’ve considered other regions, maintaining competitive advantages in these states remains our priority. 

Delivering Unique Value and Driving Innovation in a Competitive SAF Market

cCarbon: In a competitive SAF market, what unique value does NWABF offer to Offtakers, and stakeholders compared to other producers?

Nausher Khan: Our project’s scale, the processes we use, and our team’s subject matter expertise sets us apart from most SAF developers today. Many developers over-involve themselves in technical decisions rather than relying on subject matter experts, leading to suboptimal outcomes.

By contrast, we base decisions on detailed analyses by experts and maintain a strong focus on process optimization. Our project is the largest woody biomass-to-SAF initiative in the country, and I am confident in our approach, which avoids common pitfalls seen in other projects.

cCarbon: How do changes in clean fuel standards—like revised CI values and third-party verification mandates—impact SAF production and adoption?

Nausher Khan: I believe these changes will drive the industry forward. Our strategy is to focus on the Pacific Northwest, where we see the greatest competitive advantage. For example, Washington offers significant financial incentives for SAF production.  However, we are strong proponents of other Developers in other regions, as the industry is falling drastically behind on its ability to deliver SAF to the airlines in the timeframes being demanded.

While we’ve been approached to consider projects in other regions, including British Columbia and even as far as Florida and Maine, our priority is delivering success in our initial projects. We are committed to ensuring these projects are executed to the highest standards before exploring other opportunities.  If, in fact, a Project opportunity with all of the same attributes came along, we would consider that as we have developed a Team and Project model that is replacatable.

From a broader perspective, the evolving clean fuel standards push producers to innovate and optimize their processes. Third-party verification adds credibility and ensures transparency, which benefits the entire industry.

Important Links

CARB Approves Aggressive Updates to Low Carbon Fuel Standard | cCarbon

Light Duty Trucks Do the Heavy Lifting: Progress Check on California’s Advanced Clean Trucks Program | cCarbon

Oregon’s Proposed CFP Rulemaking to Streamline and Revamp Carbon Intensity Measurement | cCarbon

CFS Draft Rule Updates: Key Changes Shaping Washington’s Clean Fuel Future | cCarbon

Decoding Stakeholder’s Voices: Ensuring Integrity and Growth in Washington’s Clean Fuel Standard | cCarbon

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