Our biorefineries will convert residues from forestry operations into renewable transportation fuels. Our process makes diesel and jet fuel through gasification and catalytic synthesis. The main chemical process is called the Fischer-Tropsch (FT) process. We have become experts over the many years of developing our smaller scale microchannel FT technology and we maintain a large intellectual property portfolio in the field. At ENVIA, we and our partners built the world’s first smaller scale commercial gas-to-liquids plant and we are now using our expertise to extend the process for the biomass-to-liquids market.
We make fuels from truly renewable resources. Fuels produced in this way can yield net greenhouse gas reductions of 60% and burn cleaner than petroleum-derived diesel and jet fuels, resulting in lower emissions of particulates, sulphur oxides and nitrogen oxides, improving air quality.
Unlike some other renewable fuels, FT-derived fuels are fully compatible with current engines and fuelling infrastructure, and they can be blended at high percentages with conventional fuels.
Fuels made from eligible feedstocks and synthesised using the FT process are eligible for the highest level of Renewable Identification Number (RIN) credits in the US under the Renewable Fuel Standard (RFS). In the UK, Renewable Transport Fuel Certificates, RTFC, will apply to our renewable fuels. Other governments globally are working on similar fuel standards, expected to be implemented in the next few years.
There is an abundant supply of woody biomass in the United States from entirely sustainable sources that do not compete with food crops for land. We are energising the forestry industry that has been in decline from falling demand for newsprint and paper. We will be using those forest by-products that were once used for paper and pulp production and converting them into fuel. Infrastructure networks are already in place in many locations in the Southeastern United States.
As evidenced by, for example, the US Department of Energy’s 2016 Billion Ton report, there will be over 200m dry tonnes/year of economically-accessible non-federal timberland forestry biomass by 2030 – enough to support dozens of Velocys plants in the US. There are significant supplies of sustainable woody biomass in many diverse geographies around the world. Furthermore, Velocys’ technology route via gasification and Fischer-Tropsch enables diversification of feedstocks, including agricultural and municipal waste.
This market in the US is the first of a number of potential applications for our technology.
For details on the stages involved in the biomass-to-liquids process click here.
We build strategic alliances to augment our own capabilities and experience in order to deliver our vision. With our strategic partners, we have the resources, scale and capabilities required to deliver biorefineries on a repeatable basis.
Our strategic partners include ThermoChem Recovery International. TRI is Velocys’ preferred supplier of gasification systems for our woody biomass plants (read more). The two companies are undertaking an integrated gasification / Fischer-Tropsch technology demonstration in Durham, North Carolina.
ENVIA is a joint venture, of which Velocys is a member, which was set up to produce renewable fuels and chemicals from landfill gas and natural gas using gas-to-liquids. The plant is located adjacent to the East Oak landfill site. Finished products (renewable waxes, diesel and naphtha) are being produced and sales are being made to product offtakers. In October 2017 the plant reached an operational capacity of 200 barrels per day (read more).
The performance data that are available from the commercial scale ENVIA plant (for example, methane selectivity, carbon monoxide conversion, activity index and liquid production) meet the performance expectations set using models based on laboratory and pilot studies. Targets for the conversion of syngas to FT products and the yield of liquid products were achieved within 12 hours of the first start-up of the FT modules.
The RINs (Renewable Identification Numbers) produced at the plant have been verified by Weaver, an independent third party auditor, under the Quality Assurance Program (QAP) approved by the US Environmental Protection Agency. Subject to the plant running within the required efficiency range it is expected to continue to produce verified RINs (Q-RINs) (read more). ENVIA has signed a RIN purchase and sale agreement with TransMontaigne Product Services, LLC, which will purchase, at a fixed price, all of the available RINs generated at the plant for a six-month term beginning in April 2018.
The verification of RINs at ENVIA itself represents a significant commercial validation of Velocys’ technology.
The Velocys technology being used at ENVIA will be deployed in our future biorefineries.
Velocys has been offered an attractive package of economic development incentives to locate the plant at this advantaged site (read more).
In June 2017 the US Department of Agriculture (USDA) invited Velocys to submit a Phase II Application to obtain a loan guarantee for a commercial-scale renewable fuels plant. The loan guarantee could apply to up to $200 million of debt as part of the total installed cost of the project (read more).
The USDA loan guarantee would significantly reduce the technology risk for the debt providers. Velocys has engaged a global leading project finance bank, Sumitomo Mitsui Banking Corporation (SMBC), as the lender of record and as its financial advisor.
We are now proceeding through the loan guarantee process. Work is underway on Velocys’ integrated technology demonstration with its gasification partner TRI. The company and its engineering partner are continuing to work through the process of cost and value engineering to optimise plant capital cost, operating costs, carbon intensity and the total returns from the project. In August 2018 the USDA issued a Finding of No Significant Impact (FONSI) on the environmental assessment report for the project, which should ease considerably the process for obtaining additional permits (read more).
The plant is expected to convert locally-sourced woody biomass waste into enough renewable fuel to meet the demands of running around 40,000 diesel and gasoline trucks.
Velocys has the goal of completing all work packages required, concluding commercial negotiations such as feedstock supply and off-take agreements, securing project equity funding, and reaching final investment decision early in 2020.
In June 2018 Velocys announced that £4.9m of funding has been secured to deliver the next development phase of the waste-to-sustainable jet fuel project that the company is developing in the UK. As part of the funding package a grant of £434k has been secured from the Department for Transport under the Future Fuels for Flight and Freight Competition. The award of this grant, together with ongoing policy support provided by the Renewable Transport Fuel Obligation, will help this innovative waste-to-fuels project bring jobs and clean growth to the UK. The project is being developed with the financial and technical support of Shell and British Airways. Read more here.
In May 2018 Velocys received a “notice to proceed” to commence manufacturing of the Fischer-Tropsch reactors and catalyst for the Red Rock Biofuels LLC (“RRB”) biorefinery that will be located in Lakeview, Oregon, USA. RRB has commenced construction of the biorefinery, which and produce 15 million gallons per year of low-carbon, renewable fuels. Velocys’ role will be as a licensor for its technology to the project.
RRB’s Lakeview project is expected to deliver around $15 million revenues to Velocys during the construction and early operation stages of the plant, and an additional $30 million or more over the life of the biorefinery. Over $6 million has already been invoiced and received from RRB.
Enough jet fuel will be produced by the plant to fuel 1,800 round trips per year from Portland, Oregon to San Francisco. RRB has in place contracts from several airlines to purchase 100 percent of the jet fuel produced each year.
RRB’s success is a significant milestone for the sector, one that further demonstrates the market’s appetite for renewable transportation fuels. The building of this plant is a validation of the commercial viability and bankability of Velocys’ technology. The licensing of Velocys’ technology to RRB is complementary to the company’s strategy to develop its own biorefineries.
Preparation of synthesis gas or “syngas”, a mixture of carbon monoxide and hydrogen, by the gasification of the solid feedstock.
The Fischer-Tropsch (FT) process converts the syngas into paraffinic hydrocarbons.
Upgrading (hydrocracking, isomerisation and fractionation) produces finished, premium products.
When woody biomass is to be used as feedstock for a biofuels plant, syngas generation is carried out using a gasifier.
Gasification is a process that converts carbon-containing materials into carbon monoxide and hydrogen. This is achieved by reacting the material at high temperatures (>700 °C), but without combustion – using a controlled amount of oxygen and/or steam.
Conventional FT plants are only economically viable when they produce 30,000 barrels per day (bpd) or more. Velocys’ microchannel FT technology is commercially optimal at capacities of as low as 1,400 bpd (around 19 million gallons per year), making it an ideal choice for biorefineries using low density woody feedstock that would be uneconomic to transport over long distances to a large scale central processing facility.
Our technology combines the best aspects of conventional fixed bed and slurry bed FT reactors. The FT process is highly exothermic, or heat generating. Mass and heat transfer limitations reduce the efficiency of conventional FT reactors. In Velocys’ microchannel FT reactors, thousands of process channels with dimensions in the millimetre range and filled with catalyst are constructed immediately adjacent to water-filled coolant channels. The small-size channels dissipate heat more quickly than in conventional FT reactors. As a result, more active catalysts can be used.
Velocys’ FT technology is specifically designed to work at a small scale; but it is not a scaled down version of conventional large-scale technology. We have reinvented the reactors and catalysts, increasing the productivity per unit volume of reactor, delivering superior performance and better plant economics.
The raw FT products are upgraded (by light hydro-cracking, isomerisation and fractionation) to produce a range of possible hydrocarbon products including diesel, jet fuel, naphtha and waxes. Generally, these products are of higher quality (and command a higher price) than those derived by conventional means because they generate very low levels of emissions when combusted (particularly sulphur-containing compounds, particulates and aromatics).
Velocys works with the proven upgrading technology to enable a complete biorefinery solution.