FOAKBall: Creating First-of-a-Kind Projects that Succeed, a New Paradigm

by Jim Lane (Biofuels Digest) ... The spreadsheet worked. The chemistry was sound. The model penciled. And yet the project stalled, downsized, or died somewhere between final investment decision and steel in the ground.

If you’ve worked on a first-of-a-kind (FOAK) project in the bioeconomy, this story will feel familiar. The usual explanations follow: demand softness, policy uncertainty, buyer hesitation, macro headwinds. All true. And all insufficient. Because the real problem is more basic—and more structural: Nth-plant economics answer the wrong question for FOAK reality.

The quiet assumption inside every TEA

Techno-economic analysis (TEA) is one of the bioeconomy’s great strengths. Done well, it is rigorous, disciplined, and honest about costs, yields, and scale. It tells us what could work if technology performs as designed. But every TEA—especially the gold-standard “nth-plant” variety—contains a powerful implicit assumption: That the market conditions required for the model will persist long enough for the modeled cash flows to materialize. This assumption is rarely stated, but it is everywhere.

None of these are engineering assumptions. They are persistence assumptions. And persistence is precisely what FOAK projects lack.

FOAK projects don’t fail gradually—they fail suddenly

Classical sensitivity analysis treats uncertainty as smooth and continuous. Prices move ±20%. Yields slip. Capex creeps. But FOAK failures almost never look like that. They look like cliffs. A buyer steps back. A sustainability premium evaporates. A policy signal wobbles. A lender pauses. A board loses confidence. The project doesn’t become slightly worse. It becomes unfinanceable overnight. That’s because the failure isn’t in slope—it’s in participation.

When the relationships that hold a market together weaken, the whole structure can decouple long before the numbers look “bad.”

What TEA assumes—and FOAK reality violates

Nth-plant economics assume that key coordination problems have already been solved:

FOAK projects, by definition, operate before those conditions are proven. They don’t just face higher costs. They face weaker persistence.

Persistence is not demand—and not sentiment

When projects stall, we often describe the problem as “weak demand” or “soft sentiment.” That language hides what’s really happening. Demand is about willingness to buy now. Persistence is about willingness to stay coupled over time—through volatility, scrutiny, and doubt.

Early markets for sustainable fuels, chemicals, and materials are often rich in expressed demand but poor in durable commitment. Buyers want optionality. Policy wants flexibility. Capital wants exits. Those are rational positions individually. Collectively, they produce a system that cannot hold.

The missing variable: persistence (Ψ)

A more useful way to think about FOAK risk is not price uncertainty, but a persistence state—call it Ψ (Psi). Ψ measures the fraction of a market that is actually active and willing to remain engaged through time. Classical economics still applies—but only to the portion of the market that shows up. If you’ve taken a few economics courses, you’ll known about the basic Demand Equation:

Well, it’s not much different with Persistence in the mix. Formally, demand can be written as:

So, this doesn’t alter supply-and-demand mechanics. Price and elasticity behave exactly as classical theory predicts—but only for the fraction of the market that remains coupled. When Ψ is high, markets behave like nth-plant models. When Ψ weakens, markets thin. When Ψ collapses, the spreadsheet still works—but nobody shows up. FOAK is the low Ψ neighborhood.

Why “the math worked” isn’t the same as “the project worked”

This distinction explains a familiar frustration in the bioeconomy. Developers feel punished for being early. Investors feel misled by models that were “technically correct.” Policymakers wonder why incentives didn’t catalyze build-out. No one is wrong.

They are using tools designed for mature systems to navigate immature ones. Nth-plant TEA is a map of the destination. But FOAK projects die on the road there.

Most FOAK models answer: “Is the project profitable if everything goes right?” A FOAK audit must answer a different question: “Does the project stay together when things go wrong?” READ MORE