We have been experts in converting natural gas into liquid fuels and other products for many years. Now we are using that expertise to create renewable fuels that are fully compatible with today’s engines and existing fuel infrastructure.
There is urgent and increasing demand in the market. In California alone, the consumption of renewable diesel in 2016 was an estimated 300 million gallons. By 2030, the state will need some 1 billion gallons of renewable diesel to meet its own obligations.
Using our technology, renewable fuels can be made cost-effectively from abundant reserves of biomass feedstock. Using this route, fuel supply is not constrained by the amount of feedstock available. Feedstock comes from sustainable sources available in areas that have not seen the benefits of the energy revolutions of the past. In these places, the infrastructure servicing the forestry industry has spare capacity.
In the US these fuels generate renewable fuel credits under the federal Renewable Fuel Standard program. The RFS was designed to promote the uptake of advanced biofuels. In 2016 alone, more than 18 billion gallons of renewable fuels were produced or imported into the USA that qualified under the RFS. The renewable fuels made by Velocys have the highest level of RIN (Renewable Identification Number) credits with an indicative current value of around $4½ – $5 per gallon. Renewable diesel sold in California also qualifies for State Low Carbon Fuel Standard credits worth around 50 cents – $1 per gallon.
This market in the US is the first of a number of potential applications for our technology.