Velocys PLC Update on climate legislation (9407V)
August 15 2022 - 1:00AM
UK Regulatory
TIDMVLS
RNS Number : 9407V
Velocys PLC
15 August 2022
15 August 2022
News Release
Velocys plc
("the Company")
Update on Climate legislation
US Climate legislation will encourage sustainable fuels
investment
Legislation expected to underpin the financing of Velocys' US
sustainable aviation fuel reference project
Velocys plc (VLS.L), the sustainable fuels technology company,
welcomes the passing of the "Inflation Reduction Act of 2022" by
the US Congress in relation to key legislation tackling climate
change. Velocys notes that the legislation is expected to be signed
into law by President Biden shortly.
Subject to becoming law, this landmark piece of legislation
allocates approximately $369 billion to reducing greenhouse gas
emissions and incentivises expanded production and use of domestic
clean energy. Sustainable Aviation Fuel ("SAF") tax credits are an
integral part of the Act, together with other incentives and
mechanisms to accelerate the deployment of advanced fuel
technologies, generating non-fossil fuels with a significantly
reduced carbon intensity.
SAF is the only current commercially scalable decarbonisation
route for the aviation sector. Multiple pathways to SAF production
are needed to satisfy the aviation industry's decarbonisation
targets towards "net zero". Velocys continues to provide its
clients with integrated extensive IP-protected technology enabling
the production of synthetic aviation fuel from a variety of
sustainable feedstocks with ultra-low to negative carbon
intensity.
The SAF tax credits and associated incentives are expected to
underpin the financing of Bayou Fuels, Velocys' advanced SAF
reference project in Natchez, Mississippi, US. Bayou Fuels is a
planned cellulosic biofuels plant enabling the production of carbon
negative fuel through the use of biogenic feedstock, renewable
power, and carbon sequestration. The biorefinery will convert 3,000
tons/day of woody biomass forestry residues into 36 million
gallons/year (nameplate) of renewable transportation fuels,
predominantly SAF, with a negative carbon intensity. The biofuels
produced will adhere to both the US Renewable Fuel Standard ("RFS")
and the Low Carbon Fuels Standard ("LCFS") and earn additional
incentives via the associated Renewable Identification Number
("RIN") and LCFS credits.
As announced in November 2021, Velocys has already secured
long-term offtake arrangements for 100% of the SAF output expected
from the Bayou Fuels facility with Southwest Airlines (a 15-year
agreement) and IAG/British Airways (MOU for a 10-year agreement)
avoiding 8.8 million tonnes of CO(2) over the term of the
off-takes. This new climate legislation is expected to allow
finalisation of conversion of the MOU to a full offtake
agreement.
This critical legislative development in the US follows last
month's launch by the UK Government's Department for Transport of
its Jet Zero Strategy, setting out the Government's approach for
achieving net zero aviation by 2050. This includes an ambition for
a minimum of five commercial-scale SAF plants to be under
construction in the UK by 2025, and a mandate for the equivalent of
at least 10% SAF to be blended into conventional aviation fuel by
2030. Velocys and British Airways are jointly developing the
Altalto project, which is to build a full scale plant in Immingham,
UK, to make SAF from commercial and residential residual waste, in
anticipation of UK policy incentives competitive with those
announced by the US. Importantly, the UK mandate is to be expressed
in terms of greenhouse gas reductions, rather than simple volume,
which will benefit Altalto due to its ultra-low carbon
intensity.
Henrik Wareborn, CEO, said:
"The legislation passed in the US is of historic significance,
putting the United States on a path to lower its emissions
significantly by 2030, and beyond. We believe this landmark
legislation represents a compelling model which other governments
will seek to follow, in particular in its focus on total amount of
avoided carbon instead of volume of sustainable fuel supplied, thus
prioritising those technologies which offer routes to negative
carbon intensity fuels.
"This development, coupled with the UK's launch of its Jet Zero
strategy, represents a major endorsement of Sustainable Aviation
Fuel, and Velocys' proprietary technology to produce it."
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
Lak Siriwardene, Director of Communications +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.
www.velocys.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDUSSARUKUWAUR
(END) Dow Jones Newswires
August 15, 2022 02:00 ET (06:00 GMT)
Velocys (LSE:VLS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Velocys (LSE:VLS)
Historical Stock Chart
From Apr 2023 to Apr 2024