UK Government confirms results of Advanced Fuels Fund competition in which Velocys has been awarded £29.5m
22 Dec 2022
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:
Henrik Wareborn, CEO
Philip Sanderson, CFO
Lak Siriwardene, Director of Communications
+44 1865 800821
Buchanan (Financial PR)
+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.