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Diederik Francoys

Full Name: Diederik Francoys
Job Title: Business Development Director, Renewable Gas
Location: Gothenburg
Nationality: Dutch
Years at STX: 2+ years

STX recently teamed up with the Hapag-Lloyd and Titan Clean Fuels to execute the largest ship-to-ship delivery of liquefied biomethane (LBM) to date, marking a significant step in sustainable shipping fuel adoption. Can you describe the most exciting and challenging moments you faced during this project and how you overcame it?

With novel deal structures and collaborations, like this one, we’re always solving for multiple variables at the same time. Among these variables are aligning diverse internal and external stakeholders, crafting a compelling business case, setting up new contract structures and lining up physical capacities and assets. Aligning the stars is no easy feat and requires a lot of teamwork, but when innovative structures come to life, it’s very rewarding. Those type of innovations not only lay the groundwork for future growth of STX but they also inspire others to scale these solutions, further accelerating decarbonization. The highlight of this specific deal for me was visiting the massive container vessel in Port of Rotterdam to witness the bunkering in real life!

As someone who regularly acts as the point of contact between STX and many highly successful companies, what can a purpose-driven professional joining STX in a client-facing role expect in terms of work? In your experience, what skills have been most instrumental in creating value for them and thrive within STX?

To succeed in our markets, it’s important to be agile, flexible and prepared to educate others. Be resourceful, take smart risks and perhaps most importantly, be passionate about your work – as it will give you the energy to always keep pushing (challenging) things forward. The environmental commodity space is still relatively nascent but rapidly evolving. Its parameters are constantly changing due to new regulations and policies as well as dynamic client and competitor landscapes.

This means that we must constantly challenge our understanding and priorities, educate other actors in the ecosystem and absorb some risk to enhance liquidity and investment, ultimately accelerating the uptake of renewables. This makes working in our markets both rewarding and challenging. Lastly, we need team players at STX. Every milestone we achieve at STX is a big team effort, with many teams and individuals coming together, so beyond plenty of grit, we need team players.

Generally speaking, what advice would you give to someone considering joining the environmental commodities and climate solutions sector?

Stop considering that stodgy AI/SaaS/web3 scale-up and come join to make some actual impact! Kidding aside, I genuinely believe this is the single most exciting sector to work I could think of.

You’ll be working in a field that’s rapidly developing and extremely dynamic, with significant societal impact and a focus on creating a more sustainable future. Additionally, you’ll be surrounded by great talent, both young as well as with decades of experience. And because the sector is growing so rapidly, there’s also great (career) development potential. Furthermore, but this is of course personal, you work with “real stuff”, as in environmental commodities, there’s always a big biofuel/biomethane/liquefaction facility, wind/solar/hydro project or ship or truck involved, and I really like that physical aspect. Nothing like the smell of an anaerobic digestor…

How has your previous experience at a leading consulting firm like McKinsey and Company prepared you for your role as BD Director at a mission-driven scaleup like STX Group?

There are many skills from consulting I can transpose into my current role: global energy market experience, structuring complex topics, analytics, stakeholder management, managing teams and of course how to put together a shiny PowerPoint Presentation… However, at STX I also learnt to quickly build new knowledge and skills to convert ideas into real action and deals. I came in with limited trading background, contracting experience and hands-on sales and negotiation experience – three areas that are now core to my day-to-day work and that I very much enjoy. Additionally, I love the variety of my work. One day you’re negotiating a biomethane offtake with a farmer in a construction cabin in a remote rural area, while the next you’re discussing with a large corporate on how to best decarbonize all their sites across a country.

You have worked on Strategy and M&A in the Energy industry and currently focus on promoting the biomethane space. How did these experiences shape your approach to high-profile projects like the BioValue biomethane financing deal we recently announced?

Such a background is of course very useful but, in all honesty, given the specificity of the upstream biomethane sector (i.e. plant developers/owners/operators), there’s a lot of opportunity specific factors to consider. Deals are typically fit for purpose and require a lot of tailored deal making and ad-hoc problem solving, which is what makes it fun. Generally though, we believe our ability to tailor structures and (co-)finance and for farmers or biomethane developers is a strong value proposition as we can be more flexible than others and don’t require the same stringent requirements typical off-takers or financiers like banks or infra-funds. Unlike traditional financiers such as banks or infra-funds, we offer flexible solutions beyond the standard 7-10-year fixed-price offtake. We can step in and provide tailored financing and route to market, enabling more renewable projects to come to life. A win-win-win for the producer, STX and the environment.

What’s the aspect of your role you enjoy most?

I like building things (which explains my love for LEGO) and with STX, I can do exactly that as we have a genuinely entrepreneurial culture. I can build new products, new value propositions, build teams, coach/guide talented individuals and overall, help build and shape STX into the globally leading environmental commodity trader that I’m convinced we will be (if we aren’t already). I know where we were as a company 2.5yrs ago and I see where we are now. And although the company had already gone through a tremendous growth journey when I joined, I get a lot of energy from seeing what happened during the part of the journey I was part of, where I can tangibly see how my thinking and efforts contributed to that growth. Next to that, I see what further opportunity lies ahead of us if we continue this trajectory, which I find very motivating.

More and more companies are understanding that decarbonization makes business sense and embracing the variety of available instruments (e.g. ETS, biofuels, biomethane, energy efficiency). From your frequent interactions with corporations, how do you see this change in paradigm and evolving interest?

To accelerate decarbonization, we need all available products across the three levers to decarbonize (fuel switching, increasing efficiency and offsetting) and it is encouraging to see that most companies are increasingly leveraging various products in their decarbonization efforts. Regulation and compliance schemes are driving industries towards decarbonization, but we also need to foster greater momentum for voluntary corporate efforts.

Each corporate has a different decarbonization ambition and agenda depending on various (economic) interests and this is also a difficult space for them to navigate given the constantly developing regulation and policy, wide variety of products available and intransparency/illiquidity of many of the markets. STX partners with corporates to educate them and help them navigate this space to ensure they can competitively access the right mix of high quality decarbonization solutions. Given the complexity of these markets, STX and others fulfilling this role as the bridge between corporates and environmental commodity markets, have a critical role to play in facilitating the acceleration of the uptake of renewables.

The EU has set an ambitious target to achieve 35 bcm of sustainable biomethane production by 2030 as part of REPowerEU. To progress in that direction, what should be the next climate regulation and industry priorities?

Several factors can drive a faster uptake of biomethane. Its potential for decarbonization and reducing energy dependency in Europe, combined with relying on proven technology, has led to substantial capital inflow into the sector over the past years. Although production capacity is rapidly growing, deploying all that capital is not always easy. To create an attractive investment opportunity, it’s essential to secure feedstock supply, grid connection, various permits and viable offtake contracts. While policies like RED III, FuelEU Maritime and local subsidy schemes and blending obligations help stimulate production, more action is needed, particularly in regions where substantial feedstock is available but not yet being utilized. Furthermore, local authorities and institutions need to better prioritize permitting and grid connections for biogas plants, a topic that somehow still sometimes is controversial in countries. Producers themselves also constantly need to seek to improve plant economics and overall decarbonization impact, to make their business case more attractive. One example of this is incorporating CO2 capture in their facilities to allow for improving biomethane product quality and monetizing the liquid CO2 stream by e.g. supplying e-fuels producers (CCU) or transporting the product into permanent storage (CCS).