Advice to Renewable Fuels Project Developers: Do Your Due Diligence

Erin Costello
News
9 September 2025

Insights

By Edward Arnold, Asset Development Director, EcoEngineers

Every week, I read announcements about new, early-stage renewable fuel production projects. Many involve converting some novel feedstock—such as a new source of waste biomass or a new seed oil—into sustainable aviation fuel (SAF), renewable diesel, or hydrogen. Often, the core process technology, the technology provider, and the product slate are selected at a very early stage of the project.

When new project developers approach EcoEngineers for assistance with life-cycle analysis (LCA), pathway registration, compliance issues, price forecasts, or market studies, we sometimes find that the project planning process was relatively weak.

We see that the project’s process technology is chosen without thorough due diligence and a comparison of alternatives. Once we understand the project, often, our opinion is that the developer did not select the best process technology and flow scheme to generate the highest ROI from their feedstock.

Sometimes, we discover that the project developer is relying on the total installed project capital cost estimates developed by the technology licensor to determine their project economics. These cost estimates are usually unrealistically too low.

We also see that the project developer is basing their product carbon intensity (CI) score on estimates provided by the technology licensor, or they estimated it themselves. These CI estimates are often unrealistically low as well.

Sometimes we learn that the prime feedstock is not viable in the client’s main target market because of blocking regulations.

Too often, we tell ourselves, “They should have conducted a project feasibility and project strategy development study, fully independent of the inputs and opinions from a process technology provider.”

Many of these projects run out of investor money before they get back on a realistic track to success.

During the post-mortem phase, I have been asked, “What should we have done differently?” My answer usually contains a variation of the following:

Evaluate the Technology: Don’t select a final process technology until you have evaluated the alternatives. Remember that the process performance yield and operability guarantees are what you should base your project financial analysis on, not the yields and operability claims that appear in a technology sales presentation.
Avoid Unproven Technology: Stay away from non-commercialized process technologies. Let someone else be the first licensor.
Watch Out for Supplier Cost Estimates: Don’t use a project capital cost estimate and a project completion time schedule estimate from a process technology supplier. They have too many incentives to low-ball the estimates. Develop the initial total installed capital cost estimates and project schedule estimates by working with independent technical consultants who have realistic data from actual similar projects.
Don’t Trust Technology Developer CI Scores: Avoid basing your project economics on product CI estimates from process technology suppliers. They have too many incentives to deliver an unrealistically low value, and it is unlikely their numbers were developed by LCA experts using the appropriate model. Have your product LCA analysis performed by a proven, independent LCA expert.
Perform In-depth Regulation Analysis: Do not assume that your renewable fuel production pathway will allow for sales in any market without performing an in-depth analysis of all the pertinent current regulations. Today’s regulatory frameworks are typically complex and are often in a state of transition.
Conduct Third-Party Validation: Have market experts check your credit value estimates and feedstock costs now and into the future.