REG - Velocys PLC - UK Government SAF Policy Update

VelocysAnnouncement

31/03/2023 07:00

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RNS Number : 8527U  Velocys PLC  31 March 2023

 

31 March 2023

News Release

 

Velocys plc

("the Company")

 

 

UK Government SAF Policy Update

 

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                                               +44 1865 800821

 Henrik Wareborn, CEO

 Philip Sanderson, CFO

 Panmure Gordon (UK) Limited (Nomad and Joint Broker)  +44 20 7886 2500

 Hugh Rich (Corporate Broking)

 Emma Earl (Corporate Finance)

 John Prior (Corporate Finance)
 Shore Capital Stockbrokers Limited (Joint Broker)     +44 20 7408 4090

 Henry Willcocks (Corporate Broking)

 Toby Gibbs (Corporate Advisory)

 James Thomas (Corporate Advisory)
 Radnor Capital (Investor Relations)                   +44 20 3897 1830

 Joshua Cryer

 Iain Daly
 Buchanan (Financial PR)                               +44 20 7466 5000

 Helen Tarbet

 Simon Compton

 

 

--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.

www.velocys.com (http://www.velocys.com)

 

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