As announced on 24 March 2020, Velocys has responded well to the Covid-19 related lockdowns in the UK and the US, implementing procedures which have allowed the Company to operate close to “Business as usual” during this period. Progress has been made on all aspects of the business and all critical milestones have been met. Manufacturing of reactors for Red Rock Biofuels has progressed as per the agreed schedule and we anticipate being able to complete the delivery of all four reactors by the end of June 2020. The ongoing work on our reference projects and our customers’ projects is also on schedule. We have announced an extension of our JDA with British Airways and Shell as well as Planning Permission for the Altalto project in the UK during this period. We have received grants and subsidised Payroll Protection loans from the UK and US governments respectively in recognition of our continued commercial progress and absence of redundancies or furlough of any employees.
Due to the logistical difficulties involved in completing the audit while operating under lockdown restrictions, the Company believes that it will not be possible to complete the annual audit in time for an Annual General Meeting and presentation of the Annual Report and Accounts prior to 30 June 2020. The London Stock Exchange and the Registrar of Companies have approved a delay to the filing and publication of the Company’s audited annual accounts for the financial year ended 31 December 2019 and the holding of its 2020 AGM by three months in line with current broad industry practice due to the restrictions imposed by the Covid-19 pandemic. The Company confirms that it now expects to release the Annual Report and audited accounts during early August 2020.
Given this delay, the Company is today providing shareholders with an unaudited update on trading for the year ended 31 December 2019, details of which are set out below.
Headline Financial Results for year ended 31 December 2019 (Unaudited)
Today, Velocys is delivering the technology to provide the next generation of sustainable fuels for difficult to decarbonise sectors, particularly for aviation and heavy goods transport. Our technology converts biogenic sustainable waste materials, to cut net greenhouse gas emissions and improve air quality.
Combining transformative technology, operational expertise and a partnership approach, we are enabling commercial biorefinery projects, today, that will deliver the sustainable fuels required that will allow our clients to advance towards their net zero objectives.
Our technology can reduce the impact aviation has on the climate – the toughest area of transport to decarbonise – by delivering aviation fuel with a low or even carbon-negative footprint.
Velocys’ commercial strategy and future revenue generation is derived in three ways:
1) The sale of engineering services, FT reactors, catalysts and FT technology licences to commercial customers;
2) The limited initiation, design and development of joint venture biorefineries and sale of related engineering and technology services to the two Reference Projects.
3) The sale of integrated technology packages for end to end solid waste biomass to liquid synthetic fuels earning revenues from engineering, technology hardware including the FT reactors and catalysts and from technology licenses and decarbonisation royalties.
Commercial
Red Rock Biofuels, Oregon biorefinery (“RRB”)
This wood chips to sustainable fuel biorefinery commenced construction during 2018. During 2019 we reached agreement on a series of amendments in our licensing contracts with RRB, seeing the delivery of the first of four reactors and the first four charges of catalyst, reducing the commitment for reactors from six to four. Manufacturing the reactors and catalyst for this £9.2m order was commenced in 2019. During the year we invoiced £1.2m for the delivery of one reactor and four loads of catalyst and have £5.6m deferred revenue awaiting the completion of the delivery of the three remaining reactors, which will be completed in June 2020 and the commissioning of the FT process once the customer’s plant is fully constructed later this year.
Toyo Engineering Corporation
During 2019 we secured a purchase order and technical service agreement with Toyo Engineering Corporation (Toyo) for the use of Velocys technology in a publicly funded demonstration facility in Nagoya, Japan, as well as an advance deposit for the use of the Velocys technology by Toyo in a subsequent commercial plant.
The Toyo order with Velocys, worth approximately £0.4 million is for the supply of Velocys’ FT technology, equipment and catalyst for a biomass-to-jet fuel demonstration facility currently under construction by a consortium of Japanese companies.
In addition, Velocys has agreed that it will grant an exclusive right for Toyo to secure and use the license and technical services of the Velocys FT technology for a future potential commercial plant in Japan with an advance deposit of £3.2 million. The deposit was paid in a non-refundable tranche of $0.5 million (£0.4 million) and a further tranche which is potentially refundable and subject to milestones.
Our Reference Projects
Henrik Wareborn, CEO of Velocys, observed:
“Velocys is now within reach of being able to offer a tangible solution to support decarbonisation of air travel; a critical sector supporting the global economy with very stringent fuel criteria and few alternatives to hydrocarbon fuels. The aviation sector needs renewable fuels which meet the complex standards of fossil fuels for engine safety and performance reasons. I believe Velocys is well positioned to create significant shareholder value from our unique position at the cutting edge of sustainable aviation.
“Velocys has entered into an exciting period of its commercial development as we are progressing with the Altalto Immingham Project with our partners British Airways and Shell, having appointed Worley as our engineering contractor for the FEED stage. We announced a groundbreaking development in our Mississippi Biorefinery Project with its Carbon Capture and Storage contract with Oxy Low Carbon Ventures, which means that the fuel produced from this plant will have a negative carbon intensity. We expect negative carbon intensity to be required for competitive sustainable fuels in the future to assist our clients to progress towards their “net zero” objectives.
“Whilst developing these two reference projects for our technology we have reached agreement with our technology partners to work with us to bring their technologies into our integrated package solution providing a standardised conversion process from solid waste feedstocks to liquid synthetic fuels, which burn cleaner than conventional fuels and have low or negative Carbon Intensity.”
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821
Numis Securities (Nomad and joint broker)
Stuart Skinner
Emily Morris
Alamgir Ahmed
+44 20 7260 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O’Connor
James Asensio
+44 20 7523 8000
Radnor Capital (Investor relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Field Consulting (PR)
Robert Jeffery
+44 20 7096 7730
Notes to Editors
Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licences proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and transport fuel from municipal solid waste and waste woody biomass.
Velocys is currently developing projects in Natchez, Mississippi, USA (incorporating Carbon Capture Use and Storage) and Immingham, UK to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the company acquired a US company based on complementary technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce that it has secured a further £0.5m of grant funding for the Altalto waste-to-fuels project from the Department for Transport (DfT), under the Future Fuels for Flight and Freight Competition (F4C).
The proposed Altalto Immingham plant is planned to convert hundreds of thousands of tonnes per year of residual waste into sustainable fuels, mainly aviation fuel.
Velocys was awarded a grant of £0.4m in Stage One of the F4C in 2018, and was shortlisted to receive an award in Stage Two. The DfT has now made £0.5m of the Stage Two grant available to Velocys. Velocys is one of the two remaining companies expected to receive the balance of funding in Stage Two, subject to completion of future project milestones.
Henrik Wareborn, Velocys CEO, said:
“We are very pleased to have the continued support of the Department for Transport for this project. The Altalto project is a key step towards a substantial supply of Sustainable Aviation Fuel in the UK, which is essential for meeting net zero carbon targets. This grant, particularly at the present time, underlines the importance of our project to the Government’s plans for a green recovery.”
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821
Numis Securities (Nomad and joint broker)
Stuart Skinner
Emily Morris
Alamgir Ahmed
+44 20 7260 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O’Connor
James Asensio
+44 20 7523 8000
Radnor Capital (Investor relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Field Consulting (PR)
Robert Jeffery
+44 20 7096 7730
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
Notes to Editors
Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licenses proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and road transport fuel from municipal solid waste and residual woody biomass.
Velocys is currently developing two reference projects: one in Natchez, Mississippi, USA (incorporating Carbon Capture, Utilisation and Storage) and one in Immingham, UK, to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the company acquired a US company based on complementary technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce that a formal notice of the decision to grant planning permission for the Altalto Immingham plant has now been issued by North East Lincolnshire Council. This is further to the resolution of the Planning Committee which was announced on 20th May 2020.
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821
Numis Securities (Nomad and joint broker)
Stuart Skinner
Emily Morris
Alamgir Ahmed
+44 20 7260 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O’Connor
James Asensio
+44 20 7523 8000
Radnor Capital (Investor relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Field Consulting (PR)
Robert Jeffery
+44 20 7096 7730
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
Notes to Editors
Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licenses proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and road transport fuel from municipal solid waste and waste woody biomass.
Velocys is currently developing two reference projects: one in Natchez, Mississippi, USA (incorporating Carbon Capture, Utilisation and Storage) and one in Immingham, UK, to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the company acquired a US company based on complementary technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.
At this afternoon’s COVID-19 press conference, Secretary of State for Transport, Grant Shapps, announced the establishment of a new Jet Zero Council and confirmed Government support for Velocys.
Velocys, the sustainable fuels technology company, today welcomed the announcement from Secretary of State for Transport, Grant Shapps, on the establishment of a new Jet Zero Council.
Making the announcement at the daily briefing in Downing Street, the Secretary of State referenced Velocys’ Altalto waste-to-jet-fuel project and said:
“Our goal – within a generation – will be to demonstrate flight across the Atlantic, without harm to the environment.
“And today we’re backing a company called Velocys who are building a plant for aviation biofuels in Lincolnshire.”
Responding, Henrik Wareborn, Velocys CEO, said:
“Today’s announcement on the formation of a Jet Zero Council shows that a new era of net zero carbon flying is on a credible path, at a time when we need it more than ever. This follows news earlier today that our Altalto waste-to-jet fuel facility – the first of its kind in the UK – has received additional funding from Government and formally received planning permission, meaning it could be producing sustainable aviation fuel in commercial scale by the middle of this decade.”
Velocys has appeared on Sky News’ flagship daily business programme Ian King Live.
During a live interview, CEO Henrik Wareborn outlined Velocys’ sustainable fuels technology and the waste-to-jet-fuel process that will take place at the planned Altalto facility in Immingham, North East Lincolnshire. The Altalto project will utilise unwanted household waste (destined for landfill) by unlocking its trapped energy to turn it into sustainable aviation fuel. The project recently gained resolution to grant planning permission from North East Lincolnshire Council.
During the segment, which also showcased a 3D animation of the proposed plant, Henrik Wareborn said that technology such as Velocys’ will be key to the decarbonisation of the aviation industry, and more broadly support the green recovery.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce that resolution to grant planning permission has been given to Altalto Immingham, the UK’s first commercial waste-to-jet-fuel plant, by North East Lincolnshire Council (NELC)’s Planning Committee. A formal decision notice will then be issued subject to the completion of standard legal agreements with NELC. All statutory consultees have indicated their acceptance of the plan.
The proposed Altalto Immingham plant is to convert hundreds of thousands of tonnes per year of non-recyclable everyday household and commercial waste, otherwise destined for landfill or incineration, into cleaner burning sustainable aviation fuel (SAF). The project is a collaboration between Velocys, British Airways PLC and Shell International Petroleum Company Limited (“Shell”). It is expected to create 130 permanent skilled jobs and many more during construction.
The fuel, based on technology supplied by Velocys, offers net greenhouse gas savings of around 70% for each tonne of conventional jet fuel it displaces. It would also improve air quality, with up to 90% reduction in particulate matter (soot) from aircraft engine exhausts and almost 100% reduction in sulphur oxides.
Subject to additional funding and financial close, construction is targeted to begin in 2022, and the facility could be producing fuel from 2025.
Henrik Wareborn, CEO at Velocys, said:
“It’s fantastic news that the Planning Committee has approved our waste-to-jet-fuel project, which will be a first for the UK. Sustainable aviation fuels are essential for decarbonising this challenging sector and achieving net zero emissions by 2050. That’s why Velocys are calling on the Government to co-ordinate policy between departments to help us fund a fleet of world leading sustainable aviation fuel facilities in the UK.”
Aviation Minister Kelly Tolhurst said:
“It’s great to see the industry leading the way in creating new technologies to help achieve our target of net zero emissions by 2050, while also bringing new jobs to the local area.
“Innovative technologies – like the development of Sustainable Aviation Fuels – firms up the UK’s position as a leader in aviation, and shows the determination the industry has in continuing to operate, but in a more environmentally-friendly way.”
Cllr Philip Jackson, Leader, North East Lincolnshire Council, said:
“This development cements North East Lincolnshire’s place at the heart of the UK’s green industrial revolution, an area already renowned for its fuels production and offshore wind industry.
“For such a high profile project to choose North East Lincolnshire just shows how competitive we are for the investment market, and with projects like this choosing our patch just shows how we can work with the private sector to make locating here an easy choice.
“I look forward to seeing what this will mean in terms of real jobs for local people, both during the construction phase and when the project is operational in the longer term.”
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821
Numis Securities (Nomad and joint broker)
Stuart Skinner
Emily Morris
Alamgir Ahmed
+44 20 7260 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O’Connor
James Asensio
+44 20 7523 8000
Radnor Capital (Investor relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Field Consulting (PR)
Robert Jeffery
+44 20 7096 7730
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
Notes to Editors
Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licenses proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and road transport fuel from municipal solid waste and waste woody biomass.
Velocys is currently developing two reference projects: one in Natchez, Mississippi, USA (incorporating Carbon Capture, Utilisation and Storage) and one in Immingham, UK, to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the company acquired a US company based on complementary technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce that it has secured a further £1m funding for the Altalto waste-to-fuels project from British Airways PLC and Shell International Petroleum Company Limited (“Shell”). This £1m will be payable before 30th June 2020.
The proposed Altalto Immingham plant is to convert hundreds of thousands of tonnes per year of residual waste into sustainable fuels, mainly aviation fuel. The project is being executed under a Joint Development Agreement (“JDA”) between British Airways, Shell, and Velocys. This JDA has now been extended as planned in order to support the continued technical and commercial development of the project.
British Airways and Shell have each now been granted an option to take a one-third share in the equity capital of Altalto Limited (a subsidiary of the Company) at a strike price of £1, as a pre-cursor to a full Shareholders’ Agreement for Altalto Limited in due course.
Henrik Wareborn, Velocys CEO, said:
“We are very pleased to have the continued support of British Airways and Shell as we move forward together with the Altalto project. Their commitment, during these uncertain times for the global economy, underlines the importance of this project for the aviation and fuels industries as we strive together to achieve net zero carbon emissions.”
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821
Numis Securities (Nomad and joint broker)
Stuart Skinner
Emily Morris
Alamgir Ahmed
+44 20 7260 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O’Connor
James Asensio
+44 20 7523 8000
Radnor Capital (Investor relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Field Consulting (PR)
Robert Jeffery
+44 20 7096 7730
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licenses proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and road transport fuel from municipal solid waste and waste woody biomass.
Velocys is currently developing two reference projects: one in Natchez, Mississippi, USA (incorporating Carbon Capture, Utilisation and Storage) and one in Immingham, UK, to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the company acquired a US company based on complementary technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.
Forbes discusses green power and the impact COVID-19 is having on waste and recycling collections in the UK. The article proceeds to comment on the development of greener fuels and the efforts of the airline industry. Velocys’ Immingham project (Altalto) is highlighted, as part of IAG’s overall investment in this field through British Airways.
Altalto would host the technology process to enable the production of sustainable aviation fuel from household waste.
The full Forbes magazine article can be read here.
Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce the approval of a $709,000 loan from the Pay-check Protection Program awarded by the Small Business Administration (SBA), a US Federal Agency.
The SBA program is part of the Federal stimulus package known as the CARES (Coronavirus Aid, Relief and Economic Security) Act to offer help to small businesses in the USA during the Covid-19 crisis.
This unsecured loan has been awarded to support Velocys’ US payroll costs in the short-term. It is an unsecured loan with a 2-year maturity and 0.98% interest. No interest or principal payments are due in the first six months. The loan is however eligible for “forgiveness”, becoming non-repayable upon application by Velocys after 60 days from receipt if used for retaining US employees and maintaining US payroll costs of at least this amount in the period until the end of June 2020. Velocys is confident that it will meet the criteria for this “forgiveness”.
Velocys expects to draw down on the loan shortly.
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821
Numis Securities (Nomad and joint broker)
Stuart Skinner
Emily Morris
Alamgir Ahmed
+44 20 7260 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O’Connor
James Asensio
+44 20 7523 8000
Radnor Capital (Investor relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830
Field Consulting (PR)
Robert Jeffery
+44 20 7096 7730
Notes to Editors
Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licences proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and transport fuel from municipal solid waste and waste woody biomass.
Velocys is currently developing projects in Natchez, Mississippi, USA (incorporating Carbon Capture Use and Storage) and Immingham, UK to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the company acquired a US company based on complementary technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.
Velocys continues to progress the planning application on behalf of Altalto Immingham Limited to develop the first commercial scale sustainable aviation fuel facility in the UK.
We have been working closely throughout with North East Lincolnshire Council (NELC) and with all statutory consultees as part of the usual planning process.
As part of this process, an Addendum to the Environmental Statement has now been submitted, providing additional information and technical clarifications to assist in the consideration of the application by consultees. The further information presented in the Addendum will now be subject to the usual 30-day consultation period. Alongside the existing Environmental Statement, it will form part of the formal planning application to NELC and can be viewed on the NELC website here.
Through our positive dialogue with all consultees and the Environmental Statement Addendum we are confident that we have provided all necessary additional information at this stage, and we look forward to completing the planning process.