News Release

Velocys plc

("the Company")

14 September 2021

US government SAF policy support

White House accelerates critical policy support for SAF production: Velocys' Bayou Fuels reference project in Mississippi well positioned to benefit

Velocys plc (VLS.L) welcomed the US Government announcement last week of a set of comprehensive new policy actions in support for Sustainable Aviation Fuel (SAF) production in the US. Velocys is cited in a White House briefing paper setting out the Biden administration's plans to incentivise commercial scale supply of SAF in the US to meet decarbonisation objectives while stimulating economic growth.

The briefing factsheet can be viewed at:

https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/09/fact-sheet-biden-administration-advances-the-future-of-sustainable-fuels-in-american-aviation/

The central new policy incentive is a Sustainable Aviation Fuel tax credit as part of the Build Back Better Agenda. This credit will help cut costs and rapidly scale domestic production of sustainable fuels for aviation. The proposed tax credit requires at least a 50% reduction in lifecycle greenhouse gas emissions and offers increased incentive for greater reductions.

In addition, the US government plans to make available new and ongoing funding opportunities to support sustainable aviation fuel projects and fuel producers totalling up to $4.3 billion.

This follows on from Velocys' announcement that the UK Government supported the Altalto SAF project in the UK with a grant award of £2.4m to British Airways and Velocys, and the Japanese Government support for our clients in Japan who are expected to use Velocys' patented FT technology for a commercial scale biorefinery producing SAF from woodchips.

Henrik Wareborn, Velocys CEO, said:

"The momentum in the transition away from fossil fuels into sustainable synthetic fuels is growing globally. Velocys proprietary Fischer Tropsch microchannel technology provides the core enabling conversion process for commercial scale production of SAF from a range of abundantly available sustainable feedstocks with no other alternative use.

"The announcement by the Biden administration last week provides critical support for our leading reference project in Mississippi supporting attractive investment returns for energy transition investors driving decarbonisation of aviation."

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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 residual woody biomass and municipal solid waste. The Velocys technology can also enable the production of zero carbon fuels for the airline industry from renewable power and CO₂.

Velocys is at present developing two reference projects: the Bayou Fuels project in Natchez, Mississippi, USA (incorporating Carbon Capture and Storage) and the Altalto project 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.

www.velocys.com