CONCEPT NOTE

Philippine tLCAF to eSAF
Integration Program

A chemistry-led transition from a 3,000-bpd tLCAF refinery to a 3,000-bpd Philippine eSAF plant, applying one 100 percent neat fuel chemistry to two carbon sources.

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Financing scope of this note

This note presents a two-track financing request aligned with the respective policies and mandates of the International Finance Corporation and the Asian Development Bank:

• IFC Track (Stage 1): A US$50 million financing package for a dedicated 3,000-bpd tLCAF refinery in the Philippines, structured as a private-sector industrial efficiency investment.

• ADB Track (Stage 2 and TA): A US$500,000 to US$1.0 million technical assistance grant for policy integration and Stage 2 pre-feasibility, with ADB financing engagement on the separate US$1.0 billion Philippine eSAF plant.

Stage 1 is a downstream fuel-upgrading facility. Stage 2 is the premium eSAF plant and the primary ADB-financeable component. The two stages share one chemistry.

Program premise

The industry has twice tried to change aviation fuel by changing the feedstock first. Fischer-Tropsch liquids reached flight trials through expensive trial and error, only to confront high freezing point and no natural lubricity. HEFA, the renewable-diesel offshoot made from used cooking oil, lacks lubricity and solvency, so it enters service blended with fossil jet fuel carrying surplus aromatics. At the 50 percent blend cap, half of every liter remains fossil, halving the delivered CO2 benefit of a fuel already in critically short supply.

DM-XTech reverses the sequence: chemistry first, feedstock second. Stage 1 develops and proves the target fuel chemistry against existing standards, using available kerosene-range feedstocks that permit realistic testing under current rules. The chemistry is designed, not inherited from conventional petroleum refining. It addresses sulfur, soot-forming tendency, lubricity and the wider non-CO2 profile without compromising safety or specification compliance, and it is designed around feedstock flexibility for scale.

With the chemistry proven, Stage 2 changes the feedstock. Luzon agricultural residues will be gasified to generate raw syngas, from which a concentrated and purified biogenic CO2 stream will be recovered. Hydrogen produced by solar-powered solid oxide electrolysis will be reacted directly with that recovered CO2 in an integrated catalytic hydrogenation process designed to form liquid hydrocarbon products, including jet-fuel-range alkanes. The resulting hydrocarbon mixture will undergo separation, hydroprocessing, hydroisomerization and fractionation to produce aviation-range synthetic paraffinic kerosene.

The same chemistry that makes tLCAF a 100 percent neat drop-in fuel is what makes the Stage 2 eSAF a 100 percent neat drop-in fuel. The carbon source changes. The neat fuel property does not. This is the program's central technical proposition.

This sequencing is not theoretical for DM-XTech. Its founder has developed ultraclean fuels commercially since the early 1990s: the first unleaded, ultralow-benzene gasoline in the Philippines and among the first in Southeast Asia, commercial supply of dearomatized solvents to Bayer Philippines and Pilipinas Shell, and an early version of the fuel chemistry that is now tLCAF.

Executive Summary

DM-XTech's 100-bpd pilot tLCAF plant has produced large samples of tLCAF and EcoGuard Jet A-1 for evaluation by first-adopter airlines and helicopter OEMs. The proposed 3,000-bpd Stage 1 refinery is a 30x nameplate scale-up, which remains a material engineering step requiring FEED, pilot-data verification and scale-up validation by lenders' technical advisers. Independent testing by the Translational Energy Research Centre (TERC) at the University of Sheffield records a fuel-property profile within the tested specification limits, required lubricity performance and lower nvPM at the tested APU operating points. The commercial product specification targets sulfur of 15 ppm, compared with the ASTM D1655 maximum of 3,000 ppm. Each commercial batch will require full release testing under the applicable standards and chain-of-custody controls.

tLCAF is a fossil-based transition fuel with the right chemistry for 100 percent neat aviation use. It meets ASTM D1655, DEF STAN 91-091 and NATO F-35 without a blend cap. It carries the aromatic and lubricity characteristics that neat HEFA lacks. It addresses non-CO2 emissions through measured reductions in nvPM mass and number. It is available now, and it is not constrained by finite waste-lipid supply.

Stage 1 is a dedicated 3,000-bpd tLCAF refinery, structured as an IFC-track private-sector investment. It will target the EU market, where operators face non-CO2 monitoring and reporting requirements under EU Regulation 2024/2493 and need measured fuel-property and emissions evidence. The Stage 1 financing request is a US$50 million package.

Stage 2 is a separate 3,000-bpd eSAF plant in Luzon, structured as an ADB-track investment. Biogenic CO2 from agricultural residues is combined with green hydrogen from captive solar-powered SOEC electrolysis and converted through direct catalytic hydrogenation into a neat eSAF. Stage 2 applies the same neat fuel chemistry to renewable carbon. The present concept estimate for the Stage 2 process scope, including captive solar and BESS, is about US$1.0 billion ISBL.

The program does not describe fossil tLCAF as SAF or biogenic fuel. It defines a financed route from a proven neat fuel chemistry on fossil carbon to the same neat fuel chemistry on renewable carbon.

1. The Problem: SAF Scale and Neat-Fuel Limits

SAF is necessary for long-term aviation decarbonization, but current supply and fuel characteristics limit near-term scale.

• Feedstock scarcity: HEFA, the dominant commercial SAF pathway, relies heavily on used cooking oil, animal fats and other waste lipids. These are finite resources with competing uses. Adding capacity does not create more waste-lipid supply.

• Scalability: Available waste lipids cannot support aviation demand at the volumes implied by policy mandates. Scarcity raises cost, supply risk and competition among markets.

• Neat-fuel constraints: Conventional neat HEFA contains little or no aromatics and may require measures for seal compatibility and lubricity. Current ASTM D7566 pathways enter service through blending with conventional jet fuel, most commonly capped at 50 percent. After blending, the finished fuel is handled as ASTM D1655 fuel. Renewable tLCAF and the Stage 2 eSAF are both designed to qualify for 100 percent drop-in use, but qualification remains to be completed.

• Supply remains binding after blending: A 50/50 SAF-fossil blend can provide needed conventional-fuel properties, but it does not remove the feedstock bottleneck or continued dependence on fossil Jet A-1. Because neat SAF is essentially sulfur-free and sulfur scales approximately with the fossil blend fraction, a 50 percent SAF blend still carries approximately half the SOx associated with neat Jet A-1.

EU Regulation 2024/2493 requires covered aircraft operators to monitor and report non-CO2 aviation effects under the applicable reporting framework, with monitoring obligations in effect from 1 January 2025. It is a reporting regime, not a current purchase mandate or penalty mechanism. tLCAF addresses near-term fuel-property and non-CO2 emissions objectives while scalable renewable supply is developed. DM-XTech will provide measured evidence for operators and verifiers. It will not guarantee regulatory compliance.

2. CORSIA, LCAF and the Deployment Gap

ICAO member states adopted CORSIA and the LCAF framework in October 2016. The CORSIA eligible fuels framework requires at least a 10 percent reduction in lifecycle greenhouse gas emissions for LCAF against the fossil baseline. The category was created because SAF alone could not deliver the near-term trajectory, and the sector needed an additional lever.

Nearly a decade later, no commercial LCAF supply has reached the market. None of the CORSIA-approved sustainability certification schemes is yet approved to certify an LCAF producer. That is the deployment gap.

The gap is not evidence that LCAF is irrelevant. It is evidence that a certification-first pathway has not produced supply. DM-XTech's tLCAF does not wait for that certification framework to mature. It stays inside the existing ASTM D1655, DEF STAN 91-091 and NATO F-35 specification envelope, which is where aviation fuel actually moves today. It does not claim CORSIA LCAF status, and it does not claim a lifecycle reduction it does not yet have. What it claims is a measurable non-CO2 advantage, a 100 percent neat drop-in property, and availability now.

Renewable tLCAF and, in Stage 2, the neat eSAF are the later lifecycle-carbon destinations. Qualification and certification remain to be completed. Keeping these propositions separate protects the integrity of each claim.

3. The Solution: Two Linked Refineries, One Chemistry

Stage 1: Dedicated tLCAF Refinery (IFC Track)

Stage 1 will scale DM-XTech's 100-bpd pilot plant by 30x to a dedicated 3,000-bpd fossil tLCAF refinery. The pilot has produced large samples of tLCAF and EcoGuard Jet A-1 for evaluation by first-adopter airlines and helicopter OEMs. This operating base de-risks process scale-up, product sampling and customer qualification. The commercial plant will produce tLCAF for EU customers and EcoGuard Jet A-1 for defined aviation uses, establishing commercial volumes, operating history, customer contracts and cashflow before the larger renewable investment is raised. During due diligence, DM-XTech will provide lenders' technical advisers with independent access to pilot run hours, operating logs, product-quality records, TERC data and the proposed 30x scale-up methodology for verification.

EcoGuard Jet A-1 is the occupational-health expression of the same chemistry: a version of tLCAF engineered to contain no more than 100 ppm naphthalene. Naphthalene is a toxic aromatic classified by IARC as possibly carcinogenic to humans, and the ASTM D1655 specification ceiling of 3.0 vol% permits levels roughly 300 times the EcoGuard design target. Helicopter operations concentrate this exposure: engines run during boarding and ground handling, and crews work within meters of the exhaust, onshore and on confined shipboard decks. EcoGuard targets that exposure directly, protecting flight and ground personnel where naphthalene-laden fumes are hardest to avoid. The program's contribution is thereby not limited to climate. It extends to the health and safety of the people who operate around jet fuel every day.

Production model and feedstocks

Stage 1 will use sulfolane, an industry-standard solvent for aromatics extraction, to remove selected aromatics from kerosene-range feedstocks, followed by formulation and finishing steps required to meet the finished-fuel specification. Naming sulfolane removes uncertainty about the solvent itself. DM-XTech's proprietary position lies in its process application, operating conditions, recovery configuration and product formulation, not in the identity of sulfolane. The plant up-specifies kerosene-range streams rather than refining crude oil. Its narrower process scope may offer lower capital intensity than a conventional high-pressure hydroprocessing route, but FEED must establish the mass balance, solvent circulation and recovery, energy demand, solvent losses, corrosion controls, emissions, waste handling, product yield and process-safety basis. DM-XTech's founder has commercially produced and sold dearomatized petroleum solvents since the 1990s, including supplies to Bayer Philippines and Pilipinas Shell.

Commodity Dual Purpose Kerosene (DPK) will provide the baseload feedstock. Qualified kerosene-range streams from DM-XTech's existing chemicals operations form a third supply category. Discounted distressed Jet A-1 cargoes may provide opportunistic upside when they pass intake qualification, but no committed production volume or base-case economics depend on them. Feedstock risk will be managed through cargo qualification before acceptance and multi-supplier sourcing of required blend components.

Stage 1 parity pricing is a base-case objective, not a demonstrated commercial margin. The proposed margin structure has three elements: Jet A-1 parity pricing for tLCAF; a second revenue stream from recovered mixed aromatic solvents comparable in market function to established mixed-aromatic-solvent grades; and a narrow process scope expected to reduce capital intensity relative to full crude refining or high-pressure conversion. FEED will test product yields, solvent recovery, energy use, feedstock differentials, mixed-aromatics quality and realizable netback, logistics, fixed and variable OPEX, working capital and contingency. Any tLCAF premium will be treated only as upside and supported by documented customer evidence.

Recovered mixed aromatics and Solvesso comparison

This comparison describes market function only. It does not claim equivalence to a Solvesso grade, and the financial case will not rely on this revenue until FEED and market testing establish a saleable specification and realizable netback.

Production and release will be batch-based. Each batch will be tested by a qualified laboratory against the full applicable ASTM D1655 and DEF STAN 91-091 property set, with NATO F-35 conformity stated only where all applicable requirements are met. The quality plan will cover feedstock acceptance, blending and additive controls, traceability, certificates of analysis, storage segregation, contamination prevention and chain of custody through delivery.

TERC evidence and MRV position

TERC testing used a Honeywell 131-9A APU and Dekati ELPI+ instrumentation. The results show lower normalized nvPM mass and number for tLCAF than the Jet A-1 baseline at idle and full load. The measured fuel properties and emissions data can support an operator's non-CO2 MRV process under EU Regulation 2024/2493, subject to the operator's methodology and verifier acceptance. The EU ETS review process is assessing whether and how non-CO2 aviation effects should be addressed. This policy trajectory makes primary fuel-performance data a hedge against future exposure, not a claim of current penalty avoidance.

EU Regulation 2024/2493 has required covered operators to monitor and report the non-CO2 effects of their flights since 1 January 2025, with CO2-equivalent figures computed through the Commission's NEATS tool across GWP20, GWP50 and GWP100 horizons. An airline burning tLCAF today gains four things.

First, better data. The EU framework permits operator-specific inputs where the prescribed methodology and evidence requirements are met, while defaults apply where qualifying data are unavailable. tLCAF can provide measured fuel-property and emissions evidence, including aromatic content, density and nvPM test results. Operators and verifiers must determine which inputs are admissible in NEATS and in each reporting cycle.

Second, a measured performance case. TERC testing shows 30 to 50 percent lower nvPM number and 20 to 40 percent lower nvPM mass than the tested Jet A-1 baseline under the reported APU conditions. These results support further airline and engine testing. They do not, by themselves, prove an in-flight contrail benefit or a lower NEATS CO2-equivalent result.

Third, a running start on evidence. The EU ETS review process is assessing whether and how non-CO2 effects should be addressed. Airlines that begin controlled evaluations can build fuel-property, operational and chain-of-custody evidence before any future pricing or performance rule is known. This is preparedness, not current penalty avoidance.

Fourth, none of this requires fleet, infrastructure or supply-chain change. tLCAF is ASTM D1655-compliant and designed for 100 percent drop-in use, so the benefit is available on existing aircraft, on EU-exposed routes, on the next uplift.

DM-XTech's position remains precise: the MRV regime is a reporting obligation, not a purchase mandate, and no non-CO2 penalties are in force today. The value of tLCAF now is data quality, a lower measurable footprint, and early positioning on a regulatory trajectory that points one way.

MRV positioning: DM-XTech will provide evidence, not guarantee compliance. The evidence package will include measured fuel properties, test conditions and emissions results for use by operators and independent verifiers.

Stage 2: Philippine Neat eSAF Plant (ADB Track)

Stage 2 is a separate 3,000-bpd plant in Luzon. It applies the Stage 1 neat fuel chemistry to renewable carbon. The process integrates five subsystems:

1. Biomass gasification and gas cleanup: Rice husks and other agricultural residues are gasified to produce raw syngas. Gas cleanup removes impurities and recovers a concentrated and purified biogenic CO2 stream for the synthesis step.

2. Captive solar PV and BESS: DM-XTech will build its own solar generation and battery storage to power the electrolyzer and the plant load. This provides price certainty for the largest variable cost in the process and avoids exposure to volatile grid electricity prices.

3. SOEC electrolysis: Solar-powered solid oxide electrolysis produces hydrogen at high efficiency. SOEC operates at high temperature and requires external heat. The exothermic CO2 hydrogenation reaction in the next step supplies this heat, creating a thermal integration advantage that reduces the net electrical demand of the plant.

4. Direct catalytic hydrogenation: Biogenic CO2 and green hydrogen are reacted directly in an integrated catalytic process using a multifunctional catalyst system that promotes CO2 activation, in-situ carbon-carbon chain growth, and selective formation of jet-fuel-range hydrocarbons. The reaction is exothermic. There is no reverse water-gas shift step and no Fischer-Tropsch step.

5. Upgrading: The resulting hydrocarbon mixture undergoes separation, hydroprocessing, hydroisomerization and fractionation to produce aviation-range synthetic paraffinic kerosene.

The intended product is a neat eSAF that carries forward the same neat fuel property proven in Stage 1. It is designed to be 100 percent drop-in without blending, and it is designed to inherit the non-CO2 advantage of the tLCAF chemistry. Qualification and lifecycle certification remain to be completed. These are program objectives, not current product claims.

The present concept estimate for the Stage 2 process scope, including captive solar and BESS, is about US$1.0 billion ISBL. This is an early program estimate. It excludes items that may sit outside ISBL and must be tested through engineering, logistics and site studies. It is not part of the financing request in this note.

Why the Neat eSAF Property Matters

Most eSAF pathways in development today inherit the same blend limitation as their bio-SAF counterparts. They produce paraffinic hydrocarbons with little or no aromatics, which means they enter service at a blend cap and leave half of every liter as fossil fuel. The chemistry problem that limits HEFA limits most eSAF as well.

DM-XTech's proposition is different. The tLCAF chemistry was designed for neat use from the beginning. It carries the aromatic and lubricity characteristics that neat paraffinic fuels lack, and it stays inside the existing specification envelope. Applying that chemistry to biogenic CO2 and green hydrogen produces a neat eSAF, not a blend stock.

That is the technical link between Stage 1 and Stage 2. Stage 1 proves the chemistry on fossil carbon. Stage 2 applies the same chemistry to renewable carbon. The carbon source changes. The neat fuel property does not.

Stage 2 Market Context

The eSAF market is real, early, and priced at a structural premium.

The premium reflects the cost of compliance. The EU ReFuelEU Aviation regulation mandates eSAF blending from 2030. The UK SAF mandate includes a 2028 eSAF obligation. Airlines with EU and UK exposure must buy eSAF to comply. That is binding demand.

The cost curve is also falling. SOEC, solar and BESS are all on downward trajectories. A project built in the early 2030s procures SOEC at or near 2030 cost targets, solar at GEA-4 prices, and BESS at today's turnkey rates. Captive power removes the electricity price risk that would otherwise dominate the operating cost.

4. Captive Solar and Falling Input Costs

Captive Solar PV and BESS Strategy

The Philippines has among the highest residential electricity prices in Southeast Asia. Utility-scale solar, however, is now among the cheapest in the region. The Green Energy Auction Program (GEA-4) established ground-mounted solar reserve prices at approximately PHP 4.4832 per kWh (about US$0.079 per kWh), with integrated solar plus storage at PHP 5.4028 per kWh.

By building captive solar PV and BESS, Stage 2 will:

• Avoid grid price volatility. The project will not be exposed to Meralco retail rates, which have risen 10 percent since early 2026.
• Lock in low-cost renewable power. Captive generation at GEA-4-equivalent prices provides a stable, low-cost electricity supply for the electrolyzer and the plant load.
• Reduce lifecycle emissions. Captive solar power reduces the carbon intensity of the hydrogen and, therefore, of the eSAF product.
• Strengthen the sustainability case. A captive renewable power supply is a verifiable environmental attribute that supports premium pricing.

The Philippines is experiencing a solar boom. The country has become the world's biggest spender on solar panels since early 2026, with US$407 million in panel imports in the three months through May, a 145 percent increase year on year. Distributed solar capacity could nearly triple to 3,500 MW in two years. This scale of deployment creates a competitive supply chain for Stage 2's captive solar build.

The ACWA Power 500-MW solar-plus-storage project at New Clark City confirms the cost benchmark for utility-scale solar in the Philippines: an initial investment of at least US$400,000 per megawatt for integrated solar PV and BESS.

Falling Input Cost Curves

SOEC Cost Trajectory

SOEC is currently the most expensive electrolyzer technology, but it has a structural advantage for this project. It operates at high temperature and can be integrated with the exothermic CO2 hydrogenation reaction, reducing electrical demand.

Solar Power Cost Trajectory (Philippines)

BESS Cost Trajectory

Grid-scale battery storage costs have decoupled from cell price headlines and now sit at US$115 to 125 per kWh turnkey for utility-scale systems.

Addressing the Electricity Constraint

eSAF is electricity-intensive. For a biomass gasification-based eSAF route, a 1 MW fuel output requires approximately 1.2 MW of electricity. For a 3,000-bpd eSAF plant, the renewable power requirement is substantial.

The captive solar and BESS strategy directly addresses this constraint. Rather than relying on grid power at volatile prices, DM-XTech will build dedicated generation. The Philippines has abundant solar resources, a competitive supply chain, and GEA-4 prices that are among the lowest in Southeast Asia. With a long-term solar PPA at or near GEA-4 prices and appropriately sized BESS, the electricity cost case for eSAF in the Philippines is stronger than in most competing jurisdictions.

5. Financing Structure

IFC Precedent: Tupras (Turkey)

IFC's 2017 investment in Tupras (Turkey), Project 36388, provides a direct precedent for downstream oil refining investment. IFC provided a US$100 million A loan to an existing oil refining company for sulphur recovery units, research and development, and capacity increase of a continuous catalyst regeneration platformer. The project was classified as Environmental Category B, limited. Stage 1 tLCAF is a comparable downstream upgrading investment with a materially stronger non-CO2 climate case.

IFC Track: Stage 1 Financing Request

This note requests a US$50 million financing package for Stage 1 for IFC consideration, structured as a private-sector industrial efficiency investment.

FEED is the first use of proceeds. Site development, licensing, equipment, utilities, storage, construction, commissioning and working capital follow. Final allocations will be confirmed through feasibility, FEED, site definition, licensing terms, utility configuration and contingency assessment. Stage 1 proceeds will fund no fossil capacity beyond the dedicated refinery.

Financing will be sequenced against defined gates: validated product and TERC evidence; independent verification of pilot run hours, operating logs, product-quality records and scale-up methodology; FEED; site, permits and technology packages; EU customer engagement and offtake; equity close; debt close; construction and commissioning. At a nameplate capacity of about 140,000 tonnes per year, the proposed US$50 million capital requirement is about US$360 per annual tonne, low relative to the roughly US$700 to 1,000 per annual tonne implied by the SAFCO financing package. FEED and lender technical review must validate these assumptions, including the single-train or parallel-train configuration for the 30x scale-up.

ADB Track: Technical Assistance Grant and Stage 2 Financing

This note requests a separate US$500,000 to US$1.0 million technical assistance grant for ADB consideration, organized in two routed workstreams:

Government-counterpart work through DOE and NBB for policy integration, MRV protocol development, SAF roadmap work and the staged tLCAF-to-eSAF implementation plan.

Transaction-attached work for bankability, EU market development, offtake development and a study quantifying airline willingness to pay for the neat fuel property and for measured non-CO2 evidence. FEED is excluded from the TA grant and funded as the first use of proceeds under the Stage 1 financing package.

ADB financing engagement is also requested for Stage 2, the US$1.0 billion neat eSAF plant, subject to qualification and certification. Stage 2 is aligned with ADB's 2021 Energy Policy as amended in November 2025, which supports renewable energy, circular economy, climate mitigation, and clean energy technology manufacturing.

Risk-Sharing Structure for the Stage 2 Ask

The Stage 2 ask is structured as blended finance with explicit first-of-a-kind risk-sharing. Early movers in eSAF are structurally exposed to higher costs and to the risk that their production becomes uncompetitive as later projects benefit from technology learning. The financing structure is designed to absorb this early-mover cost penalty while the cost curve falls.

What the Stage 2 estimate covers:

• Biomass gasification and gas cleanup
• CO2 separation and concentration
• Captive solar PV and BESS
• SOEC electrolyzer capacity
• Direct catalytic hydrogenation and upgrading
• Feedstock logistics and pre-treatment
• Site infrastructure and utilities

What Must Be Demonstrated Before Credit Approval

1. Long-term solar PPA at or near GEA-4 prices
2. Grid connection capacity confirmed for backup and export
3. Feedstock supply agreements for rice husks and crop residues
4. Offtake letters of intent from EU and UK-exposed airlines
5. Populated financial model showing a path to cashflow positive
6. Environmental and social impact assessment scoping completed
7. Technology partner confirmed for SOEC and direct CO2 hydrogenation

6. Financial Framework

A populated management model is not presented at concept-note stage because the feedstock slate, product yields, site, utility balance, solvent-recovery design, offtake terms and financing conditions have not yet been validated. Rather than fill those gaps with unsupported assumptions, this note sets out the model architecture, benchmark context and decision gates. The populated management case, downside case and sensitivities are committed FEED and transaction-attached technical-assistance deliverables and must be completed before credit approval.

Model architecture

The Stage 1 model will calculate annual throughput and product yields; tLCAF and mixed-aromatic-solvent revenue; feedstock, solvent make-up, utilities, logistics, laboratory, labor, maintenance and other OPEX; working capital; EBITDA; taxes; free cashflow; debt service; DSCR; covenant headroom; and equity returns. Sensitivities will cover feedstock price and quality, tLCAF netback, mixed-aromatics yield and netback, capacity utilization, utilities, foreign exchange, CAPEX, schedule, interest rate and ramp-up. No investment decision will rely on Jet A-1 parity alone without a validated feedstock-to-product margin and contracted or evidenced sales terms.

External benchmark context

Commercial margin logic and model deliverable

The qualitative margin thesis is transparent. tLCAF is priced at Jet A-1 parity in the base case. Recovered mixed aromatic solvents provide a second potential revenue stream. The narrow solvent-extraction scope is expected to support lower capital intensity. Each element remains subject to FEED, market testing and lender technical review. The populated model will include base, downside and break-even cases, one-way and combined sensitivities, and a reconciliation from concept estimate to FEED estimate. It must close the financing case before credit approval.

Stage 1 Scope 1 and Scope 2 greenhouse-gas emissions will be quantified and disclosed through FEED and due diligence using a documented GHG accounting methodology consistent with DFI requirements for fossil-fuel projects. The assessment will define the operating boundary, energy inputs, emission factors, calculation method, baseline, assurance approach and measures to reduce project emissions.

The program will establish an environmental and social safeguards framework aligned with the ADB Safeguard Policy Statement and IFC Performance Standards, subject to each institution's appraisal requirements. The TA and FEED workstreams will scope the ESIA and related management plans. Pollution prevention and resource efficiency will be addressed under IFC Performance Standard 3, and community health, safety and security under IFC Performance Standard 4. The framework will also cover labor and occupational safety, stakeholder engagement, grievance handling, gender and social inclusion, and monitoring. Gender-responsive consultation, employment and training measures will be defined with indicators during preparation. Stage 2 preparation will include smallholder participation in feedstock supply chains and early engagement with affected communities.

7. Government Integration

Government coordination should distinguish the fuel available now from the renewable end state. tLCAF is fossil-based and scalable today. The public-development case rests on using Stage 1 to establish Philippine production, testing, export and operating capability, then moving to Stage 2 through a separately financed program.

8. Development Impact

• Foreign-currency earnings: EU non-CO2 reporting creates an evidence need that Philippine production can serve, subject to customer validation. Exports of tLCAF now, and eSAF later at scale, can generate foreign-currency earnings for the Philippines.

• Occupational health and safety: EcoGuard Jet A-1 is engineered to contain no more than 100 ppm naphthalene, a toxic aromatic classified by IARC as possibly carcinogenic to humans. The ASTM D1655 naphthalenes ceiling of 3.0 vol% permits levels roughly 300 times the EcoGuard design target. Helicopter operations can concentrate exposure because engines run during boarding and ground handling while flight and ground crews work within meters of exhaust, including on confined shipboard decks. EcoGuard targets that exposure while remaining within the Jet A-1 specification envelope, extending the program's contribution from climate and safety to the health of aviation personnel.

• Climate performance as market access: TERC data indicate lower nvPM than the Jet A-1 baseline. Documented non-CO2 performance, including nvPM and contrail-related inputs, can support EU market access for Philippine-produced fuel. The program will generate operating evidence relevant to non-CO2 MRV without representing that the evidence guarantees regulatory compliance.

• Industrial capability and jobs: Stage 1 creates refinery operations, laboratory, quality, maintenance and export roles. Stage 2 can add gasification, direct CO2 hydrogenation, upgrading, solar, storage, fabrication, feedstock logistics and process-integration jobs.

• Lower installed cost: Local fabrication can reduce capital and maintenance costs while keeping more project spending in the Philippines. Any claim will be tested through engineering and vendor qualification.

• Rural value creation: Rice husks, rice straw, coconut residues and other qualified waste biomass can supply Stage 2, creating feedstock supply chains and rural income, subject to sustainability and logistics assessment.

• First-mover positioning: An early standards-compliant tLCAF refinery, followed by a qualified neat eSAF pathway, can place the Philippines ahead of regional competitors in a market shaped by EU and UK regulation.

• Transition integrity: The project defines a funded, testable sequence from fossil-based tLCAF to neat eSAF. It does not describe the current fuel as renewable, and it does not assert completed ASTM qualification for neat use of the future eSAF product. Stage 1 de-risks the Stage 2 product chemistry as well as its commercial platform.

• Scale: Stage 1 is not constrained by finite waste-lipid supply. Stage 2 broadens the resource base to Philippine waste agricultural biomass through gasification and direct CO2 hydrogenation.

Domestic market relevance would follow only if Philippine fuel and aviation regulations move in the same direction. The NBB SAF roadmap work is at an early stage and is not assumed in the base case.

9. Requested Action

DM-XTech requests:

IFC Track:

1. IFC engagement on the US$50 million financing structure for the dedicated 3,000-bpd Stage 1 tLCAF refinery, structured as a private-sector industrial efficiency investment. The Tupras precedent (Project 36388) provides a direct comparator for downstream oil refining investment.

2. IFC technical advisory support for equity structuring, technology licensing, commercial agreements, governance and later capital-raising readiness.

ADB Track:

3. An ADB technical assistance grant of US$500,000 to US$1.0 million organized in two routed workstreams: (a) government-counterpart work through DOE and NBB for policy integration, MRV protocol development, SAF roadmap work and the staged tLCAF-to-eSAF implementation plan; and (b) transaction-attached work for bankability, EU market development, offtake development and a study quantifying airline willingness to pay for the neat fuel property and for measured non-CO2 evidence. FEED is excluded from the TA grant and funded as the first use of proceeds under the Stage 1 financing package.

4. ADB financing engagement on Stage 2, the US$1.0 billion neat eSAF plant, including captive solar and BESS. Stage 2 is aligned with ADB's 2021 Energy Policy as amended in November 2025, which supports renewable energy, circular economy, climate mitigation, and clean energy technology manufacturing.

Joint:

5. Joint engagement with DOE, DOST, NBB, BOI and CAAP to define the regulatory route for Stage 1 tLCAF deployment and the later Stage 2 eSAF program.

6. Support for a Stage 2 pre-feasibility workstream covering Luzon waste-biomass supply and logistics, gasification and direct CO2 hydrogenation integration, captive solar and BESS design, local fabrication, cost, schedule, lifecycle-GHG assessment, sustainability safeguards and fuel qualification. This workstream will prepare a later proposal and will not create a Stage 2 financing request under this note.

7. Support for an airline, customer and verifier engagement plan that preserves DM-XTech's position as an evidence provider, not a compliance guarantor.

Closing position

The immediate proposition is a financeable fuel business: a US$50 million, dedicated 3,000-bpd tLCAF refinery serving the EU market with a superior conventional-grade product, Jet A-1 parity as its base case and measured non-CO2 evidence. It scales an operating 100-bpd pilot plant by 30x. The development proposition is the transition it enables: cashflow, operating history, transferable neat fuel chemistry and investor confidence for a later 3,000-bpd Philippine neat eSAF plant. Keeping these decisions separate makes the present ask clear and the long-term program credible.

APPENDIX A: TERC Comparative Emissions Evidence

On 26 March 2025, the University of Sheffield Energy Innovation Centre and Translational Energy Research Centre (TERC) conducted back-to-back comparative testing of conventional Jet A-1 and DM-XTech fuel on a Honeywell 131-9A auxiliary power unit.

Source-label note: The test reports use "LCAF" for the tested fuel. This note uses tLCAF to distinguish DM-XTech's fossil-derived transition fuel from the later renewable tLCAF and eSAF objectives.

Test platform and sequence

Headline results

All values are raw and uncorrected for atmospheric conditions. They support a direct fuel-to-fuel comparison at the tested APU operating points. The findings demonstrate lower soot-proxy emissions under these conditions. They do not by themselves establish in-flight contrail reduction or regulatory compliance.

Evidence access

Full test reports and supporting material are available in the due-diligence data room. Public evidence pack: https://webapp.dmxtech.co.uk/terc-evidence-pack.html

Disclosure boundary: This appendix reports the test platform, instruments, sequence and emissions outcomes only. Proprietary production chemistry and formulation details are excluded.