Velocys provides update on development of US, UK SAF projects

Velocys plc on Sept. 21 released financial results for the first half of 2022. The company’s half year report includes an update on the progress of sustainable aviation fuel (SAF) projects under development in the U.S., U.K. and Japan. The company is also developing a new technical center in Ohio.

In the U.S., Velocys is currently developing the Bayou Fuels plant, a 35 MMgy woody biomass-to-SAF project near Natchez, Mississippi. According to Velocys, the local development authority in Mississippi is finalizing the levee construction protecting the biorefinery site. The company said this is a critical milestone required for insurance purposes and de-risking the site.

The project is being optimized to achieve an even lower carbon intensity to take advantage of new tax credits established by the Inflation Reduction Act, including the SAF production tax credit and the clean fuel production tax credit. Velocys also reported that the feedstock capability and the power supply to the biorefinery are being further assessed to ascertain optimal output.

The company said it is working to complete fuel offtake agreements, taking into account the specific tax credit mechanics set out in the IRA. Velocys also said it intends to confirm appointment of its U.S. investment banks to lead the front-end engineering design (FEED) funding during the fourth quarter of 2022, with a view of having FEED project funding in place in mid-2023.

Also in the U.S., Velocys has entered an agreement to construct a 52,000 square foot site in Columbus, Ohio, that is suitable to house the company’s reactor core assembly operations alongside its renewable and development activities. Construction on the project began in May and is expected to be complete next spring.

In the U.K., Velocys is developing the Altalto project, a 20 MMgy facility located in Immingham that will convert municipal solid waste (MSW) into SAF and renewable naphtha. According to Velocys, site engineering and geotechnical work is continuing to allow the project site to connect to the East Coast Carbon Capture and Storage cluster. The company earlier this year announced Foresight Group LLC has become a project partner. Velocys also noted that it is actively pursuing funding opportunities offered by the U.K. government.

In Japan, Velocys is collaborating with TOYO on biomass-to-SAF and power-to-SAF technology solutions. A commercial scale project, NEDO2 BtL, is currently in the FEL2 stage. The company also said a power-to-liquids demonstration project is progressing as planned.

Velocys reported revenue of £48,000 during the first half of 2022 from revenues and consulting services in respect to feasibility studies, compared to £8.2 million during the same period of last year. Last year’s revenues were mainly from supplying reactors and catalyst to the company’s first commercial client in the U.S. Velocys reported a loss before income tax of £5.7 million, compared to a £2.2 million loss reported during the same period of last year.