12 February 2024 | Oxford, UK: Velocys, a leading sustainable aviation fuel (“SAF”) technology company, announces that it has begun a new chapter following the completion of its take-private on 18 January 2024. As part of the transaction, a new consortium of growth investors, including Carbon Direct Capital, Lightrock, GenZero and Kibo Investments, has infused Velocys with US$40 million of growth capital. The funds will be used to accelerate the delivery of Velocys’ proprietary technology to customer projects whilst further building its technology leadership, scaling its production and enhancing the breadth and depth of the team’s expertise.
Decarbonising aviation is a critical climate challenge given the 800 megatonne annual carbon footprint from airline travel.[1] Velocys expects demand for sustainable aviation fuel to accelerate given the confluence of regulatory support and higher readiness levels of drop-in fuel technologies. For instance, new European Union (“EU”) rules will require suppliers to ensure that 2% of fuel made available at EU airports is SAF in 2025, 6% in 2030, 20% in 2035 and 70% in 2050.[2] Airlines are also expected to drive the exponential growth in demand for SAF. In 2023, more than 490,000 flights were partially powered by SAF, from just 500 in 2016.[3]
Velocys is a technology company whose patented catalyst and micro-channel reactor platform provide a scalable, flexible solution particularly suitable for projects that produce SAF. Velocys’ Fischer-Tropsch technology is compatible with multiple project types employing diverse feedstocks, including municipal solid waste, woody biomass, and CO2 & green hydrogen, and has demonstrated performance at commercial scale. Velocys’ experience of integrating its technology into an overall scheme is highly valuable to clients, allowing them to maximise lifecycle carbon savings.
Velocys has invested to scale its reactor facility in Plain City, Ohio, to ensure a stable supply of reactors for delivery to SAF project owner-operators around the world. Velocys’ 52,500 square foot reactor facility will be able to produce an initial 12 reactors per year, which is the typical requirement for the operation of a commercial-scale SAF biorefinery. There are also plans to ramp up capacity of the facility as demand for SAF grows.
Henrik Wareborn will continue to lead Velocys’ management team as the Chief Executive Officer. The new ownership consortium – a global syndicate of climate investors focused on harnessing technology to accelerate decarbonisation – has combined expertise, networks, and specialist scaling support that will better equip Velocys to contribute meaningfully to the decarbonisation of the aviation industry.
Josh Dienstag, Chief Investment Officer of Carbon Direct Capital, said: “We believedrop-in fuels are the most promising, scalable solution to decarbonize aviation and to deliver climate impact the soonest. Velocys is a scarce supplier with the technology readiness, production capacity, and leadership team to deliver for SAF project partners. We are pleased to be part of this investor consortium and to support Henrik and the Velocys team.”
Kevin Bone, Partner at Lightrock, said: “We are delighted to be partnering with Velocys as it takes the next steps in its journey to becoming the leading provider of SAF solutions to the aviation industry. This critical objective requires long-term backing with the requisite experience of supporting industrial companies as they seek to realise their potential. I have no doubt that this consortium is best placed to do just that.”
May Liew, Investment Director at GenZero, said: “Decarbonising the global aviation industry will require innovative solutions that can be adopted with ease and at scale. This is where Velocys’ pioneering Fischer-Tropsch reactor is relevant, with its modularity and efficiency to support the development of advanced biofuel applications. By leveraging technology to transform waste materials into sustainable aviation fuel, Velocys is well positioned to play a key role in scaling the use of low-carbon fuels to pave the way towards net-zero aviation.”
Henrik Wareborn, Chief Executive Officer of Velocys, said: “The deal secures the future of Velocys, our pioneering technology and our industry leading talent, allowing us to keep our foot on the accelerator as we continue to lead the way in innovative sustainable aviation fuel solutions as we enter an inflection point for our industry. For the past twenty years Velocys has had a critical role in the development of reactors, technology and processes which enable the efficient production of lower carbon SAF, and we and our new partners are excited to see what the next twenty will bring.”
END
[1] https://www.iea.org/energy-system/transport/aviation
[2] https://www.reuters.com/business/aerospace-defense/airlines-look-sustainable-aviation-fuel-meet-carbon-targets-2023-11-28/#:~:text=SAF%20makes%20up%20only%20around,accounting%20for%2065%25%20of%20fuel.
[3] https://corporate.virginatlantic.com/gb/en/business-for-good/planet/fuel.html
Media Enquiries:
Sam Cartwright, sam.cartwright@h-advisors.global / +44 207 379 5151
Jonathan Cook, jonathan.cook@h-advisors.global
About Carbon Direct Capital
A new generation of transformative, growth companies has emerged from the carbon management ecosystem. Carbon Direct Capital partners with leading companies in this space. The firm believes that selective investing with a science-focused approach maximizes both climate impact and financial returns. Carbon Direct Capital is headquartered in New York City. For more information visit www.carbondirectcapital.com.
About Lightrock
Lightrock is a global impact investing platform that backs purpose-driven companies tackling the world’s biggest challenges. Lightrock funds invest in companies that pursue scalable and tech-driven business models around the key impact themes of people, planet, and productivity/tech for good. Lightrock’s portfolio includes more than 90 high-growth companies across Europe, US, Latin America, India, and Africa, supported by more than 105 Lightrock professionals based in 6 global offices. Lightrock is backed by LGT, the international private banking and asset management group, and other leading global institutions. For more information, please visit www.lightrock.com
About GenZero
GenZero is an investment platform company focused on accelerating decarbonisation globally. Founded by Temasek, we seek to deliver positive climate impact alongside long-term sustainable financial returns by investing in opportunities with the potential to be nurtured into impactful and scalable solutions.
Driven by a common purpose to decarbonise for future generations, we recognise the need for a holistic and integrated approach to achieve a net zero world. At GenZero, we adopt a flexible investment approach across three focus areas to drive climate impact: (i) nature-based solutions that help protect and restore our natural ecosystems while benefiting local communities and biodiversity; (ii) technology-based solutions that deliver deep decarbonisation impact; and (iii) carbon ecosystem enablers which refer to companies and solutions that support the development of an effective, efficient, and credible carbon ecosystem.
For more information on GenZero, visit www.genzero.co
About Kibo Investments
Kibo Investments is a Singapore-based private investment office with a focus on climate technology.
OHIO: Velocys, the sustainable fuels technology company, is delighted to announce the launch of its new 52,500 sq. ft technology facility in Plain City, Ohio that will house the reactor core assembly and catalysis operations which form a critical part of the production process for sustainable aviation fuel (“SAF”).
The new site enables the consolidation of Velocys’ catalysis services, microchannel reactor core assembly and technology licensing under one roof. The building’s construction began in mid-2022 and was finished by the end of the year with fit out completed over the winter.
Following the completion of an Enterprise Zone agreement signed with Union County and Jerome Township, Ohio, for a package of investment incentives and a grant received from JobsOhio, Velocys has already hired a number of senior personnel.
The Company is currently occupying the space with 20 employees and installing equipment which is expected to be fully commissioned for production from mid-2024. Eventually the facility will house approximately 35 employees when in full production.
The new site has the capacity to produce approximately 48 cores per year, enough to support 12 reactors which is the typical requirement for the operation of a single commercial scale SAF biorefinery, with a capacity to convert approximately 1TWh per year of energy.
It is expected that the facility will have sufficient production capacity to meet projected orders until 2028, including those from Velocys’ two biorefinery reference projects – Bayou Fuels, Mississippi and Altalto, Immingham, UK.
As part of a 15 year lease agreement, Velocys contributed $2m towards the construction with the remaining $8m being contributed by the developer, Warner Industrial Corporate Centers 2 LLC, a subsidiary of Ohio-based developer, The Pagura Company.
The launch event will take place at 10.00am local time on Tuesday 24 October, 8520 Warner Road, Plain City, Ohio 43064 in the presence of Velocys executives, clients, board members, local stakeholders and colleagues.
Henrik Wareborn, Velocys CEO, said: “The completion of this state of the art facility is a real milestone both for Velocys and for the move to decarbonise the aviation industry. It is another critical piece in the jigsaw to go alongside the support we are receiving from regulatory and policy initiatives in all of our core markets. I would like to offer my thanks to the State of Ohio along with the many contractors who have completed this project in such a short time frame. To move from planning permission to completion in two years is a testament to all those involved and takes us a big step closer to enable our clients to produce SAF with ultra-low carbon intensity at commercial scale.”
To attend the launch or request interviews and imagery please contact:
Rae Baker / rae.baker@velocys.com
About Velocys
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
Two reference projects (Bayou Fuels, US, and Altalto Immingham, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (“FT”) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.
Velocys, the sustainable fuels technology company, is please to announce its interim results for the six months ended 30 June 2023.
Velocys, the sustainable fuels technology company, is pleased to announce its unaudited preliminary results for the year ended 31 December 2022 (“FY22”).
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce that further to the award of the grant from the UK Government’s Department for Transport (“DfT”) Advanced Fuel Funds of up to £27 million for the Altalto Immingham Sustainable Aviation Fuel (“SAF”) Project, announced on 12 December 2022, Altalto Ltd* has completed the work necessary to claim the first tranche (£7 million) of the grant up to 31 March 2023. In addition, as planned, the project has obtained the first tranche of private funding for the period from 1 April 2023 from its existing private sector participants.
The Altalto project’s aim is to deliver a commercial waste-to-SAF plant in Immingham, UK. The DfT grant and matched funding will enable Altalto to complete the Front-End Engineering Design (“FEED”) stage of the project. Following the completion of FEED and a successful final investment decision, construction will commence in 2025 with full commercial operation expected in 2028.
Since the award of the DfT grant in December, the Altalto Immingham Project has entered into a number of technology license and engineering services agreements with project technology licensors and the FEED contract with Bechtel Limited, utilising the first tranche of grant funds provided by the DfT. Pursuant to the terms of the grant, further draw down of the grant is subject to demonstration of project milestones with matched funding requirements to be met over the two years to 31 March 2025.
In March 2023, the Company announced the appointment of a leading global investment bank to advise on the financing of Velocys’ Reference Projects and to assist in obtaining the matched funding from private sector investors, which is on track to be in place during Q4 2023.
As previously announced, Velocys’ cash contribution to the Altalto Project over two years from April 2023, including its contribution to the first tranche of private funding of £1 million, is not expected to exceed £8 million, with Velocys intending to recover any funding it provides at the earlier development stages (as from 1 April 2023 onwards) following receipt of third party project investment.
* a wholly owned subsidiary of the Company.
This announcement contains inside information for the purposes of the UK Market Abuse Regulation.
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
+44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
+44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
+44 20 7408 4090
Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton
+44 20 7466 5000
— Ends —
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
Two reference projects (Bayou Fuels, US, and Altalto Immingham, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (FT) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.
Velocys plc (VLS.L), the sustainable fuels technology company, welcomes yesterday’s consultation paper from the UK Government which contains a number of proposals aimed at supporting and financing the development of the sustainable aviation fuel (“SAF”) industry. Velocys believes this will help to support the further development of its UK reference project, Altalto Immingham and other UK pipeline opportunities, building on the recent UK government grants awarded from the Advanced Fuel Fund.
The Government has confirmed its desire to establish the UK as a global leader in the development, production and use of SAF by creating secure and growing SAF demand, kickstarting a domestic SAF industry and working in partnership with industry and investors to build long term supply. Yesterday’s consultation comes amid growing support for decarbonisation and further supports the UK Government’s ambition of reaching net zero by 2050 and its Jet Zero strategy. The Gasification plus Fischer Tropsch (FT) process has been identified as the main pathway to sustain SAF uptake to 2030 and beyond. Velocys’ patented FT process is well positioned to fulfil this demand.
The proposed SAF mandate offers a guaranteed level of demand and creates a long-term requirement to supply SAF, provides incentives to SAF producers in the form of tradeable certificates and signals the vital role SAF will play in the future of UK aviation. The tradable certificates are intended to close the gap between the cost of jetfuel and the cost of SAF, with additional certificates awarded in proportion to avoided carbon dioxide emissions.
The proposals in this consultation will help support the ongoing development and financing of the Company’s Altalto Immingham reference project. As announced in December 2022, Altalto Immingham was awarded £27 million from the Department for Transport’s Advanced Fuel Fund to support Front End Engineering Design, the final engineering phase required prior to construction, subject to matched funding.
Due to begin commercial operation in 2028, the biorefinery is expected to be one of the first commercial scale waste-to-jet fuel facilities in the UK. It will convert over half a million tonnes per day of commercial, industrial and municipal solid waste into 20 million gallons per year of sustainable fuel, with an overall lifecycle emissions saving of more than 300,000 tonnes carbon dioxide per year, equivalent to taking 140,000 cars off the road.
Henrik Wareborn, CEO, said: “Velocys’ technology is immediately ready to support commercial scale production of SAF with ultra-low carbon intensity and input from a range of feedstocks.
“There is a clear groundswell of legislative and policy support for the use of sustainable aviation fuel with the Inflation Reduction Act in the US, the ReFuelEU initiative in Europe and now today’s news from the UK. This level of government support is critical, so that industry and policy can work in parallel and at speed to reduce emissions. There is still a need for a clear mechanism to ensure price stability for SAF, but the proposed mandate is an important step in the right direction.
“Today’s news further underpins the investment case for our Altalto reference project in Immingham. The project will put the UK firmly at the forefront of the global move to decarbonise the aviation sector.”
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
+44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
+44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
+44 20 7408 4090
Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton
+44 20 7466 5000
— Ends —
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
Two reference projects (Bayou Fuels, US, and Altalto, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (FT) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce that it has completed the appointment of a leading global investment bank to advise it on the financing of its two key technology reference projects; the Bayou Fuels project in Natchez, Mississippi, and the Altalto Immingham project in the UK.
Henrik Wareborn, CEO, said:
“Following the recent announcement of our master relationship agreement with Bechtel, today’s announcement further supports the acceleration of our commercial and strategic vision for Velocys.”
For further information please refer to the Notes to Editors or please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
+44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
+44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
+44 20 7408 4090
Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton
+44 20 7466 5000
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
Two reference projects (Bayou Fuels, US, and Altalto, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (FT) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.
Velocys plc (AIM: VLS), the sustainable fuels technology company, is pleased to provide the following business and post close update for the 12 months ending 31 December 2022 (“FY22”).
Based on unaudited accounts for FY22, the financial performance of the Company was in line with market expectations. As of 31 December 2022, Velocys had a cash balance of £13.4 million (2021: £25.5 million). The Company expects to report its results for the year to 31 December 2022 in May 2023.
During 2022, Velocys saw the achievement of a number of key milestones and objectives which put the Company in a strong position to progress its reference projects through to key valuation inflection points and build its commercial pipeline.
Business Scale-up and Delivery
Bayou Fuels Project (US)
Altalto and e-Alto Projects (UK)
Post year-end, Velocys has entered into a Master Relationship Agreement (“MRA”) with Bechtel Limited, one of the world’s most respected engineering companies. The MRA, which will be instrumental in delivering the next important milestones for the reference projects and future commercialisation, sets out a framework and roadmap for the parties to collaborate with each other with the objective of developing an EPC execution model for sustainable fuel plants.
The Company is also in the final stages of appointing a global investment bank as Financial Adviser to assist with, and advise on, the delivery of development capital into the Bayou Fuels (US) and Altalto (UK) projects. As this activity accelerates, we have commenced a broader recruitment programme with a focus on increasing our project engineering and business development capability.
Operations and Business Development
Bayou Fuels Project
With the support of the Financial Adviser, the Company expects the Series A funding for the development capital for the Bayou Fuels project to be launched in Q2 2023, with an aim to enter in to FEED by Q4 2023, delivering a pathway to Financial Investment Decision (“FID”) in Q1 2025. Once the project enters FEED, the Company expects to generate revenues for its technology license and engineering service. Velocys expects to retain a reduced equity position in the Bayou project post the Series A fundraising.
Following FID in early 2025, the Company expects to enter into construction with commissioning and start up anticipated in 2028, at which point Velocys expects to be generating revenue from reactor and catalyst sales, engineering services and technology licensing.
The 15-year, fixed price, offtake agreement remains in place with Southwest Airlines, amended recently to reflect the updated project schedule, as well as a Memorandum of Understanding with IAG for a 10-year fixed price offtake for 100% of the SAF produced at the biorefinery.
As previously announced, the project has significantly improved its carbon intensity score from -144g CO2e/MJ to -375g CO2e/MJ through the provision of a biomass boiler renewable power solution with CCS integration. This improvement has the potential to increase future revenue for Bayou Fuels and further support third party project funding. The Inflation Reduction Act of 2022 supports the project greatly as the 45Z tax credits incentivises the total amount of avoided carbon rather than the volume of sustainable fuel supplied, therefore prioritises our technology which offers a direct route to negative carbon intensity fuels.
Altalto Project
A grant award of £27 million was received for this project from the DfT’s Advanced Fuels Fund, the highest such award from the DfT to any party involved in the competition. This award, along with private sector matched funding, will be used for the completion of the project FEED and places Altalto on a clear pathway to FID by the end of 2024 and recognises the progress that has been made in advancing the project. Altalto expects to enter into construction in 2025 with commissioning and start up anticipated in 2027, at which point Velocys expects to generate revenue from reactor and catalyst sales, engineering services and technology licensing.
Licensor and engineering service agreements are being finalised and, subject to contract, it is expected that Bechtel will commence FEED in Q2 2023. With the support of our Financial Adviser, matched funding will be sought in Q2 2023. This will provide an opportunity for new partners to participate in the early development capital ahead of FID, as well as the development of offtake arrangements. Velocys expects to retain a reduced equity position in the Altalto project post the funding. The project is being jointly developed with British Airways.
Henrik Wareborn, CEO, said:
“The progress and partnerships outlined in this business update reflect the significant achievements made in 2022 and Velocys’ position of strength in a rapidly evolving global market for advanced synthetic fuels technology.
“We have the here-and-now technology to enable SAF production close to sustainable feedstock sources to decarbonise the aviation industry at scale. In order for SAF production plants to be successful, several threads need to be in place, such as government regulatory support, abundant and sustainable feedstock, carbon capture and sequestration, supply of renewable power, and most of all, a technology that works. Velocys provides a uniquely integrated package with its IP-protected technology at its core.
“The progress we continue to make, supported by these new developments and the policy tailwinds, means we have a solid platform to deliver. Consequently, we are confident about the years ahead and our commercialisation strategy.”
This announcement contains inside information for the purposes of the UK Market Abuse Regulation.
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
Lak Siriwardene, Director of Communications & Sustainability
+44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
+44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
+44 20 7408 4090
Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton
+44 20 7466 5000
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
Two reference projects (Bayou Fuels, US, and Altalto, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (FT) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce the execution of a master relationship agreement (“MRA”) with Bechtel Limited (“Bechtel”), one of the world’s most respected engineering companies. The MRA sets out a route map for the parties to collaborate with each other with the objective of developing an EPC execution model for the Company’s sustainable fuels projects.
This collaboration will initially focus on Velocys’ two main reference projects – Altalto Project in Immingham, UK and Bayou Fuels Project in the US – and the recently announced e-Alto power-to-liquids project in the UK, all subject to the terms of future contracts. However, the MRA also covers other third-party projects that may be introduced by either Bechtel or Velocys.
Under a separate continuing technical services agreement, Bechtel is providing front end project engineering and other technical services to support the development of Velocys’ Sustainable Aviation Fuel (“SAF”) project portfolio. In particular Bechtel is preparing to commence work on delivery of the Altalto Project Front-End Engineering and Design phase (“FEED”) following the recent UK government grant funding of up to £27 million awarded to Velocys.
Henrik Wareborn, CEO of Velocys, said:
“The master relationship agreement with Bechtel is an important step towards the provision of world class EPC capability and capacity to the expanding Velocys project portfolio. Bechtel is one of the world’s most respected engineering companies. Working with Bechtel will give added value to current and future clients with respect to successful project delivery.”
Paul Marsden, President, Bechtel Energy, said:
“We are committed to supporting revolutionary energy transition projects designed to reduce global carbon emissions. As part of Bechtel’s portfolio in sustainable fuels, we are excited to collaborate with Velocys and look forward to realising the potential of these facilities to introduce sustainable fuel options for global markets.”
Certain information contained in this announcement may constitute inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
For further information please refer to the Notes to Editors or please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
Lak Siriwardene, Director of Communications & Sustainability
+44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
+44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
+44 20 7408 4090
Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton
+44 20 7466 5000
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
Two reference projects (Bayou Fuels, US, and Altalto, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (FT) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.
Altalto Project, Immingham, UK
The Altalto Immingham Project is a joint development between Velocys and British Airways. The plant will have a nameplate capacity of approximately 80 million litres/year of SAF and naphtha, with negative Carbon Intensity, made from residual commercial and municipal solid waste. Altalto Immingham will also produce a concentrated stream of carbon dioxide ready for sequestration. In December 2022, Altalto was awarded a grant of up to £27 million by the UK Department for Transport (“DfT”), subject to matched funding, to deliver the Front End Engineering Design stage of the project, ahead of construction to begin in 2025.
Bayou Fuels Project, Natchez, Mississippi, US
This plant is expected to produce approximately 125 million litres/year of sustainable aviation fuel (SAF) and naphtha, with negative Carbon Intensity, made from woody biomass residues from the pine plantations in the counties surrounding Natchez, Mississippi. The project includes the use of renewable power and sequestration of the plant’s by-product carbon dioxide. The sustainable fuels produced from the facility will meet all requirements and regulations to be sold in the US generating Federal and State credits under RFS-2 and the relevant State Low Carbon Fuel Standards.
The Bayou Fuels project has a 15-year fixed price offtake agreement with Southwest Airlines, which, together with a further MOU for a 10-year fixed price offtake, account for in aggregate 100 per cent of the SAF produced and underwrites a floor on certain credits.
e-Alto Project, UK
Velocys was also awarded a grant of up to £2.5 million by the DfT for the e-Alto project in December 2022. This allows Velocys and its partners to conduct feasibility, technical validation, site selection and pre-FEED engineering for a plant to produce SAF from carbon dioxide and hydrogen made using renewable (decarbonised) electricity, in the UK.
About Bechtel
Bechtel is a trusted engineering, construction and project management partner to industry and government. Differentiated by the quality of our people and our relentless drive to deliver the most successful outcomes, we align our capabilities to our customers’ objectives to create a lasting positive impact. Since 1898, we have helped customers complete more than 25,000 projects in 160 countries on all seven continents that have created jobs, grown economies, improved the resiliency of the world’s infrastructure, increased access to energy, resources, and vital services, and made the world a safer, cleaner place.
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Velocys, the sustainable fuels technology company, announced on 12 December 2022 that it had received a grant of £27m from the Department for Transport (“DfT”) Advanced Fuels Fund competition for the Altalto Sustainable Aviation Fuel (“SAF”) project, which is being developed under an existing Joint Development Agreement between Velocys and British Airways to deliver a commercial waste-to-SAF plant in Immingham, UK. Velocys also announced that it had received a separate DfT grant of £2.5m to contribute its technology to an e-fuels project in the UK in collaboration with a number of new and existing partners.
This morning’s announcement by DfT confirms the strategic importance of this award as part of UK Government’s drive to have five SAF plants in construction by 2025.
The £165 million Advanced Fuels Fund provides grants to support the development of commercial-scale SAF plants that are at an advanced stage, enabling them to become ready for investment and construction. The key objective of the Advanced Fuels Fund is to kick-start the UK advanced fuels sector with the commercial deployment of innovative fuel production technologies, such as Velocys’ IP-protected technology, that are capable of significantly reducing lifecycle carbon emissions in the aviation industry.
Transport Secretary Mark Harper said:
“Using waste or by-products to refuel airliners sounds like a flight of fancy, but thanks to £165 million of Government funding it’s going to help us make guilt-free flying a reality.
“It’s exactly this kind of innovation that will help us create thousands of green jobs across the country and slash our carbon emissions.”
Jonathon Counsell, IAG’s Group Head of Sustainability, said:
“Investing in sustainable aviation fuels (SAF) is one of the best opportunities our industry has to decarbonise. We’re delighted that Velocys has received crucial financial support in the UK from the Department for Transport Advanced Fuels Fund.
“IAG has committed US$865 million in SAF purchases and investments to date. With the right policy support to incentivise further investment, the UK could see many SAF plants built over the next decade, creating 6,500 jobs, and saving over three million tonnes of CO2 per year as well as improving the UK’s energy security.”
Cllr Philip Jackson, leader of North East Lincolnshire Council, said:
“I’m really pleased to see this announcement for the project. We have been working with Velocys for several years now – investment on this scale will always take a significant length of time, but this will allow the plans to progress to the next stage.
“We have been working to make North East Lincolnshire a top competitor for green energy investment decisions, and we have grown our credentials, both onshore and offshore, greatly in the last few years.
“We will continue to work with Velocys to land this important project, and help create local jobs for local people.”
Henrik Wareborn, Velocys CEO, said:
“We are encouraged to see that the UK Government is taking seriously the urgent need to transition to lower carbon travel and transport, with its stated ambition of having at least five commercial scale SAF plants under construction in the UK by 2025. Velocys’ IP protected technology provides a pathway to large-scale production of SAF, which is an essential element for achieving net-zero-carbon air travel.”
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
Lak Siriwardene, Director of Communications
+44 1865 800821
Buchanan (Financial PR)
Helen Tarbet
Simon Compton
+44 20 7466 5000
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels technology company, traded on the AIM, providing customers with a technology solution to enable the production of negative Carbon Intensity synthetic, drop-in fuels from a variety of waste materials. Synthetic fuel is the only commercially available, permanent alternative to fossil aviation fuels. The Velocys technology is IP-protected in all major jurisdictions.
British Airways has an option to acquire a share of Altalto Limited, the 100% owner of Altalto Immingham Limited, from Velocys.
Two reference projects (Bayou Fuels, US, and Altalto, UK) are designed to accelerate the adoption and standardise the Velocys proprietary Fischer Tropsch (FT) technology with an integrated end to end solution, including renewable power and carbon sequestration.
Velocys is enabling commercial scale synthetic fuel production in response to the clean energy transition, with significant additional positive air quality impacts.