Velocys and British Airways extend Altalto option agreement

30 Mar 2021

Agreement extended to 31 March 2022

Velocys, the sustainable fuels technology company, is pleased to announce that it has jointly agreed to extend the current option agreement with British Airways for the Altalto project to 31 March 2022. Exercise of the option would give both parties equal equity ownership (50/50) of Altalto Ltd and the right to appoint a Director. Details of the original option agreement were previously announced on 12 May 2020.

The Company also welcomes the UK Government announcement (16 March 2021) of the launch of a new £15m ‘Green Fuels, Green Skies’ grant funding competition. This funding is intended to support the production of Sustainable Aviation Fuel (SAF).  Altalto Immingham Ltd intends to apply for a grant in this competition, on behalf of Velocys and British Airways. The results of the competition are expected to be announced by the Department for Transport on 31 July 2021.

The Company expects the project will be in a position to launch its front-end engineering design (FEED) later in 2021 subject to confirmed UK Government policy support and the addition of new investment partners in the project.

In addition, on 25 March 2021 the Secretary of State for Transport, the Rt Hon Grant Shapps MP, opened a Consultation into amending the Renewable Transport Fuel Obligation (RTFO) to increase the carbon savings it achieves. Velocys welcomes the launch of this process, fully supports its objectives and will be actively participating in the Consultation. The Secretary of State notes that expanding the RTFO to include recycled carbon fuels would “transform the commercial viability” of waste-to-fuel technology and support pioneering projects in the UK looking to develop sustainable aviation fuel from household waste.

Henrik Wareborn, CEO of Velocys, said:

“I thank British Airways for their renewed commitment to our joint efforts to advance the Altalto waste-to-SAF project. Our announcement today reflects the strength of our partnership and commitment to the project.

“SAF remains critical to the decarbonisation of aviation; it is applicable to all flights including long-haul and can be used immediately with no need for modifications to aircraft fleets or refuelling infrastructure. Velocys has the technology to enable the production of SAF from wastes, avoiding landfill or incineration, and our technology can be coupled with Carbon Capture and Storage (CCS) to achieve net zero fuels. Policy support remains critical to the establishment of UK SAF facilities, but with the right support, we can enable a clean future for aviation. Whilst there is no guarantee that the Altalto project’s application to the Green Fuels, Green Skies competition will be successful, we are delighted to see this new Government initiative to support the production of SAF.”

 Sean Doyle, CEO of British Airways, said:

“Despite the crisis in global aviation, it is vital for our future that we continue to address climate change and we remain focused on playing our part to reduce the impact we have on the planet. For the last 100 years we have connected Britain with the world and the world with Britain, and to ensure our success for the next 100, we must do this sustainably.

“Progressing the development and commercial deployment of Sustainable Aviation Fuel is crucial to decarbonising the aviation industry and to meet our commitment to carbon net zero by 2050.   The UK has the experience and resources needed to become a global leader in the deployment of such sustainable aviation fuel production facilities, and we need Government support to drive decarbonisation and accelerate the realisation of this vision.”

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Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

For further information, please contact:

Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Head of Communications & Sustainability
+44 1865 800821

Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Dan Norman (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)
Sarah Mather (Corporate Advisory)
+44 20 7408 4090

Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly
+44 20 3897 1830

Field Consulting (General PR)
Robert Jeffery
+44 20 7096 7730

Notes to Editors

Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now licenses proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and road transport fuel from municipal solid waste and residual woody biomass.

Velocys is at present developing two reference projects: one in Natchez, Mississippi, USA (incorporating Carbon Capture, Utilisation and Storage) and one in Immingham, UK, to produce fuels that significantly reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out from Oxford University, in 2008 the Company acquired a US company based on complementary reactor technology developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom.