Technical Due Diligence for New Technologies: Reducing Risk and Driving Success
By Tracy Sadowski with contributions from Rick Hoffman, Joseph Jacobs, Mel Larson, and Andrew Last
Investing in a new technology – whether it’s a renewable fuels process, a carbon capture innovation, or a breakthrough chemical route – is exciting. But with all that potential comes uncertainty. Will the technology scale? Is it economically viable? Are there hidden risks in the business plan or process design?
That’s where Becht comes in. With more than 60 years of experience and a global team of 1,000+ experts, we help clients make informed, confident decisions. Our technical due diligence (TDD) program for new technologies is built to assess feasibility, uncover red flags, and recommend clear next steps, so you can move forward with your eyes wide open.
This blog is part of a two-part series. If you’re looking at operating assets (facilities that are already online), check out our companion post on Technical Due Diligence for Existing Assets.
Why Technical Due Diligence Is Essential for New Technologies
New tech opens doors, but it also brings risks that traditional financial analysis can’t catch. Our TDD process tackles several questions: Is the technology mature enough for commercial deployment? Can it scale economically and operate reliably? Are yield projections and energy assumptions realistic? What’s the regulatory outlook?
And we assess these areas through four key lenses:
• Technology Risk: We look at the technology readiness level (TRL), scaling challenges, operability, and failure modes. If you’re working off a lab-scale prototype or a pilot plant, we help you map out what it will take to get to commercial reality.
• Market Risk: Is the tech solving a real problem? Can it compete on cost and performance? We consider market trends, policy impacts, and the supply chain around feedstocks, equipment, and services.
• Capital Project Risk: How complex will it be to build and commission? What kind of project execution risks are in play? We look at CapEx, OpEx, scheduling assumptions, and more.
• Operational and Performance Risk: We scrutinize the throughput, yield, and energy balances. We model sensitivities and highlight where assumptions might not hold under real-world conditions.
How Becht Approaches Due Diligence for New Tech
We’ve developed a structured but flexible process that fits your timeline and scope. Whether you need a high-level review or a deep-dive validation, we tailor our efforts to fit.
Step 1: Kickoff and Alignment
We start with a kickoff meeting to understand your goals and align on scope. At the same time, we request critical data, including financial models, PFDs, material balances, capital cost estimates, and any available pilot data. We also outline the full project execution plan so there are no surprises.
Step 2: Early Risk Scouting
As we review the initial data, we begin identifying risks and gaps. Our techno-economic team models cost drivers and performance metrics while our technical SMEs assess design assumptions and operability. You’ll get regular Red Flag Reports so you can act fast if anything urgent emerges.
Step 3: Deeper Technical Dive
We go beyond the paper. Our team interviews the technology developers and key stakeholders. If there’s a pilot plant or reference site, we visit it. We also benchmark against other commercial processes or known technologies to understand where your project stands.
Step 4: Final Report and Recommendations
The final report summarizes all findings, from technical feasibility and commercial fit to project readiness and potential mitigations. We lay out a clear path forward and flag what needs to be de-risked before moving to the next phase. A closeout meeting with your leadership team ensures clarity and alignment.
Step 5: Post-Diligence Support
We’re happy to stick around. Some clients ask us to help with early-stage engineering, post-acquisition reviews, or technology optimization. Our team integrates seamlessly into your workflows to help carry the diligence insights forward.
Where We’ve Made a Difference: Case Studies
Specialty Chemical Plant Integration Study
A specialty chemical client sought to assess the feasibility of integrating a new process into their existing facility. Becht conducted a comprehensive due diligence study to evaluate process compatibility, plant layout constraints, and potential retrofit challenges. The resulting report provided clear guidance on operational fit and investment justification.
Evaluating a Waste-to-Energy Investment Opportunity
A private equity group was considering a significant investment in a company developing a novel waste-to-energy solution. The technology was still in a pre-commercial phase, with only pilot plant data available. Given the short timeframe of exclusivity, the client needed a fast, thorough evaluation of both technical and business risks to support their investment decision.
Becht’s consulting team was brought in to perform a rapid yet detailed review during the exclusivity period. Work focused on:
• Reviewing data room materials, including pilot plant operating results, engineering documentation, and commercial projections
• Assessing the technical feasibility of the proposed process and its scalability
• Evaluating the assumptions behind the proposed business model, including feedstock supply, product pricing, and regulatory drivers
• Conducting a sensitivity analysis on key variables affecting financial outcomes, such as throughput rates, operating efficiency, and capital costs
• Identifying technical and commercial risks that could impact long-term viability or require further development
The evaluation revealed significant uncertainties around scale-up risks, feedstock logistics, and unproven economic assumptions. The sensitivity analysis showed a narrow margin for error, with downside scenarios quickly leading to negative returns. Based on these findings, the client ultimately chose not to proceed with the investment – allowing them to avoid a high-risk opportunity and redirect resources toward more promising alternatives.
Independent Technical Observation of Pilot Plant Operations
A technology company was preparing for negotiations with potential investors and commercialization partners. To strengthen its position, the company sought an objective, third-party assessment of its pilot plant demonstration. The goal was to increase transparency and build confidence in the technology’s readiness for scale-up and deployment.
Becht was engaged to observe and evaluate a scheduled pilot plant run. The scope of work included:
• On-site observation of pilot plant operations, startup, and runtime stability
• Review of key process parameters and performance metrics collected during the run
• Discussions with plant operators and technical staff to understand operating procedures, troubleshooting practices, and lessons learned
• Assessment of how closely pilot results aligned with expected outcomes and commercial design targets
• Preparation of a formal, independent report summarizing findings and technical observations
Ultimately, the independent report provided a clear, credible account of pilot plant performance, highlighting operational strengths and areas for continued optimization.
Due Diligence on a Biomass-to-Fuels Investment Opportunity
A private equity firm was considering an investment in a renewable fuels producer utilizing woody biomass to manufacture sustainable aviation fuel and renewable diesel. The opportunity was available under a limited exclusivity period, requiring an expedited, comprehensive due diligence review. The client needed to assess whether the business model, performance assumptions, and proposed capital expenditures supported a viable investment case.
The Becht consultant’s review focused on both technical and economic aspects of the opportunity, including:
• Evaluation of throughput, availability, and yield data from a small number of existing operating facilities
• Assessment of process reliability, feedstock sourcing strategy, and product specification consistency
• Review of proposed capital expenditures, cost estimates, and timelines provided by the project’s general contractor
• Analysis of the business model’s revenue and cost structure, including market assumptions for fuel pricing and credits
• Sensitivity analysis of internal rate of return across key variables including feedstock cost, plant uptime, and yield variability
The findings highlighted several areas of concern, potential cost overruns associated with the proposed capex budget, and throughput risk due to feedstock and product supply chain issues. The sensitivity analysis showed significant downside exposure under even modest deviations from baseline assumptions. Based on these insights, the client chose to walk away from the opportunity during the exclusivity window, allowing them to preserve capital and redirect focus to more viable investments.
Let’s Talk Before You Leap
Whether you’re an investor, a strategic buyer, or a developer looking to scale, technical due diligence helps you understand what you’re really getting into – and how to do it right. To learn more or get started, contact our experts today.
Like what you just read? Join our email list for more expert insights and industry updates.
