SAF One’s ‘design one, build many’ – lessor Novus explains its innovative SAF strategy
In the push for sustainability in aviation, lessors are often asked how they can play a bigger role. Novus Aviation Capital has taken up the challenge with SAF One, a pioneering venture aimed at developing global SAF projects. After 18 months of operations, SAF One is demonstrating what a lessor-supported SAF platform can set out to achieve. “Building a SAF Refinery is a completely different business from leasing aircraft […] Trying to do this as a side gig within the leasing platform is not going to work” Mounir Kuzbari, Novus’ Co-CEO and SAF One co-founder, shares. Ishka sits down with Kuzbari to shed light SAF One’s innovative strategy.
Combining aviation and energy expertise
Novus Aviation Capital, a Dubai-headquartered aviation finance platform, co-founded SAF One in partnership with Sencirc, an Abu Dhabi based investment company with a portfolio of holdings in the circular economy including biogas and waste-to-energy with projects in the UK and India, while its principals have an exhaustive track record in the oil and gas sector. The synergy between Novus’s aviation ecosystem and Sencirc’s energy expertise is at the heart of SAF One. “[We bring] the entire Novus aviation ecosystem and relationship with airlines, but also other stakeholders obviously like the aircraft manufacturers, but also the wider capital markets and capital providers, including some of our captive investors and potentially other institutional investors that are looking to invest in this space,” explains Kuzbari.
Despite being best known for their aircraft investment background, the Novus principals are also not new to the energy sector, having previously invested in renewable power. Kuzbari has over a decade of experience in solar energy development in Italy, Jordan, Japan, and the wider Middle East, co-founding solar and energy efficiency company Yellow Door Energy, where he was a member of the board. He notes that although solar energy is “very different” from building a SAF plant, the knowledge gained dealing with EPC contracts, (engineering, procurement, and construction) or packaging a “bankable” project proposition is useful “regardless of the underlying infrastructure,” and has given Novus a lot of “confidence and credibility” when launching SAF One.
Not a ‘side gig’ – Lessors making their mark on SAF production
One of the most intriguing aspects of SAF One is that it is among the first examples of a leasing company playing a direct role in SAF production. Traditionally, lessors have been hesitant to get involved in capital-intensive projects outside of their core business. “A leasing company will find it difficult, as a standalone, to do what a [traditional infrastructure] developer would be doing, but there are some synergies. When it comes to airline relationship that's where [lessors] can bring access to developers that don't necessarily have the footprint with the airline or don't have the bandwidth or the infrastructure to really interact with airlines,” explains Kuzbari.
He acknowledges, however, that entering the SAF space is not without its challenges. “Building a SAF refinery is a completely different business from leasing aircraft […] Trying to do this as a side gig within the leasing platform is not going to work,” he explains, highlighting that you need a “dedicated team”.
SAF One’s current lean operating model reflects this philosophy. The core SAF One team consists of fewer than 10 people, supplemented by additional expertise from Novus’s broader infrastructure and external contractors, such as for engineering work. The senior leadership team was also joined earlier this year by a SAF industry veteran Jeff Ovens, who previously served as Fulcrum BioEnergy’s European managing director.
A HEFA-first, pathway-agnostic, de-risked approach with airline partnerships
One of SAF One’s core strategic pillars is a focus on airline partnerships. Kuzbari views its airline relationships as a key competitive advantage in an increasingly crowded SAF market. “Airlines are being bombarded with so many potential SAF options, […] it is becoming more difficult for people that don't have the relationship with airlines to crack those offtake [agreements], so that's maybe where I think the leasing community can help”, Kuzbari highlights.
In terms of operational focus, SAF One is pursuing a decentralised production model. Instead of focusing on large-scale centralised facilities, the company is planning on building smaller, localised SAF plants near its airline partners. This allows them to optimise logistics and secure local feedstock for production. “We’re looking at a de-risked approach” Kuzbari explains. The goal is to “build locally, close to our airline customers” with “local feedstock and local offtake wherever we can”.
SAF One is “pathway agnostic”, meaning they are not locked into any one production method. However, for their initial projects they are concentrating on the HEFA pathway, the most commercially advanced SAF process to date. “Given where the technology readiness level is […] our first three to four projects are going to be HEFA-based”, Kuzbari confirms. The firm’s engineering partner, Kent, has completed pre-FEED (preliminary design) for SAF One’s HEFA plant blueprint and is “in the middle” of the FEED stage. SAF One has already made a decision on the licensing technology which may be announced in the “coming weeks or months.”
Beyond HEFA, SAF One is “looking” at positioning themselves around other pathways. In India, the firm has partnered with GPS Renewables to explore ways to “develop different pathways, including alcohol-to-jet.” The two firms are looking at “local feedstocks available in India” to consider the kinds of SAF plants they could “potentially build.” “We should be making further announcements around India in the next six to 12 months,” Kuzbari discloses.
‘Design one, build many’ – SAF One’s scalable model for global expansion
SAF One’s decentralisation strategy is also reflected in the production capacity of these upcoming projects. Rather than focusing on large-scale centralised production, SAF One’s projects will be relatively modest in size—around 45,000 tonnes of SAF per year, according to Kuzbari. For reference, Ishka notes that greenfield HEFA projects can have projected annual SAF outputs several times larger. SAF One’s idea is to replicate this model across various regions to “create economies of scale” through repeatable projects. “Design one and build many […] We don’t want to customise every project, otherwise you lose on efficiencies”.
As the company plans its global expansion, its most revealing move so far has been the signing of an MoU in Vietnam with local carrier VietJet in December 2023, focused on SAF development and supporting the country’s growing aviation sector. “Within the next six to nine months we’ll announce a number of landmark projects in different parts of the world including the Middle East […] We’re prioritising jurisdictions where we have an edge, know-how, boots on the ground, or relationships with airlines,” Kuzbari specifies. “There’s a lot of noise” in the SAF space, Kuzbari points out, but “we’re laser-focused on getting our first projects up and running in the shortest timeframe—within the next two to three years.”
’Great momentum’ in SAF regulation, but more supply-side support needed
When it comes to regulatory frameworks, Kuzbari sees the November 2023 ICAO CAAF/3 agreement as a step in the right direction, though they would have preferred more ambitious targets. “We would have expected a slightly more aggressive carbon intensity reduction target – people were talking about 8%, we landed at 5% by 2030 [but] 5% is still 5% so we are pleased with the outcome” Kuzbari explains. SAF One was a sponsor of the CAAF/3 meeting which took place in Dubai in the weeks leading to COP28 and set a global goal that fuel used in international aviation in 2030 should be 5% less carbon intensive. The target has since accelerated SAF demand policy creation around the world.
Among the countries announcing SAF targets on the heels of the CAAF/3 goal is the UAE, which is aiming for 1% of its aviation fuel to be SAF by 2030. India is also formulating a SAF mandate. “This is great momentum […] but we’d like to see more support. Mandates are good, but we’d also like to see a little bit more incentives, at least at the beginning,” he adds, pointing to the example of early investment into solar energy.
https://www.ishkaglobal.com/Savi/Article/7634/SAF-Ones-design-one-build-many-lessor-Novus-explains-its-innovative-SAF-str