Cielo pre-sells 60K litres of renewable diesel

Cielo Waste Solutions Corp. has received pre-payment in full for 60,000 litres of renewable diesel, which is now being produced at the company’s Aldersyde waste to renewable fuel facility. The renewable diesel will be shipped to a third party of the purchaser’s choice once Cielo reduces the sulphur content of its renewable fuel down to less than 15 PPM sulphur. (See desulphurization update below.)

Cielo has sold small quantities of renewable diesel in the past, however, this sale marks the first commercial pre-sale of 60,000 litres. Cielo received $1.25/litre from the purchaser, which is much higher than the cost to produce the renewable diesel, including the pending projected costs to lower the sulphur content to meet the diesel industry’s spec. Management believes this premium price per litre confirms the purchaser’s confidence in Cielo. The purchaser will be able to resell the renewable diesel they pre-purchased at a significantly higher price early in the new year once the desulfurization equipment is installed and commissioned at the Aldersyde facility. It is the purchaser’s intent to have Cielo remove the sulfur from the renewable diesel and then allow Cielo to sell it as an ultra-low sulfur diesel and the purchaser will receive the upside of the higher margin when sold.

Don Allan, president and CEO of Cielo, stated, “After several years of advancing our waste-to-high-grade-renewable-fuel technology, we feel receiving our first more substantial commercial order, as a pre-payment, is a significant milestone. We are holding our heads up high today and are delighted to say that we are one step closer to achieving positive cash flow.”

Joint venture update and further scale up

On Nov. 17, 2020, Cielo and Renewable U Medicine Hat Inc. held the previously announced engineering kick-off meeting. This meeting was held onsite at the proposed facility just outside of Medicine Hat, Alta., in Dunmore, including the companies that have been awarded contracts to begin work on the Dunmore facility, located between CP Rail’s main line and the Trans Canada Highway, just east of Highway 41. In attendance was Cielo’s management, representatives from Renewable U Medicine Hat, Cielo’s lead engineer company, civil and railroad engineers and Cielo’s primary rail contractor. It was decided to further scale-up the Dunmore facility from 10,000 litres per hour to 12,000 litres per hour or 100 million litres per year. This will allow Cielo to maintain a 4,000 litre per hour module for the Dunmore facility (as well as the other facilitates intended to be built pursuant to Cielo’s previously announced joint ventures) such that one, two or three modules can be constructed to build a single facility. This provides an advantage by allowing the size of the facility in each respective territory to be tailored.

Ryan Jackson, COO of Renewable U Medicine Hat, stated, “It was an exciting day having our first engineering meeting for our Dunmore facility. I was pleased to see so many professionals on site with many of them local residents. In a time where we need it most, this Dunmore facility will bring jobs and economic prosperity to our region and tackling our garbage and waste issues all while creating needed clean, renewable fuels. I am beyond excited and cannot wait for the next steps.”

Allan stated, “We believe we have a very strong group of professionals working with us on constructing our game-changing technology and believe the additional increase in production capacity at the Dunmore facility will simplify the build-out and there is plenty of waste feedstock and fuel purchasers to make this viable. Nov. 17, 2020 marks the day we kicked off the design and pre-construction phase of our Dunmore facility and all parties showed their intentions to move forward with the building of follow-on waste to energy facilities. We anticipate this facility will be able to convert 200,000 tonnes of garbage into 100 million litres a year of high-grade renewable fuel.”

Cielo and the group of companies controlled by Renewable U Energy Inc., including Renewable U Medicine Hat, are in the review stages of the joint venture agreements that are anticipated to form the joint ventures resulting in the next five facilities to be built. Further updates will be provided as they become available.