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On 5 September 2023, Velocys plc welcomed the UK Department for Transport's (DfT) confirmation to introduce a revenue certainty scheme for Sustainable Aviation Fuel (SAF) and to launch a consultation on its design. The DfT previously awarded the Altalto Immingham project a £27 million grant in December 2022, with discussions ongoing for private sector matched funding by the end of 2023. The DfT's announcement also stated an intention for five UK SAF plants to be in construction by 2025.
| Date | 5 Sept 2023 |
| Time | 10:58:01 |
| Category | Miscellaneous |
| ID | 4436L |
News release
Velocys plc
("Velocys" or "the Company")
5 September 2023
UK Government SAF Revenue Certainty Scheme Update
Velocys plc (VLS.L), the sustainable fuels technology company, welcomes yesterday's announcement by the UK Department for Transport ("DfT") confirming its commitment to introduce a revenue certainty scheme ("Scheme") for Sustainable Aviation Fuel ("SAF"). The DfT will launch a consultation on the design and delivery of the Scheme, which should attract further investment into the UK SAF industry.
A SAF Scheme is expected to be highly beneficial to the Altalto Immingham project as it sends a positive long-term signal to investors which will underpin the financing of plant construction. The project is making good progress through its Front End Engineering Design (FEED) stage, including the conclusion of license and engineering service agreements with key technology licensors, supported by a £27 million grant from the DfT under the Advanced Fuels Fund as announced in December 2022. Discussions remain ongoing with private sector investors to obtain the required remaining matched funding to be in place by the end of the year.
The DfT's announcement also states that the Scheme will work alongside the SAF mandate to be introduced in 2025 and reaffirms the Government's intention to have five UK SAF plants in construction by that year.
Henrik Wareborn, Velocys CEO, said:
"Yesterday's announcement is very positive for the UK SAF industry and especially for the Altalto project. Thanks to our progress with engineering and licensor engagements, Altalto is leading the way as the furthest developed within the group of projects supported under the Advanced Fuels Fund. It stands to benefit from the revenue certainty scheme as well as from the SAF mandate.
This commitment from the Government is a major step towards unlocking the capital required to further fund SAF projects in the UK. As noted by the Department for Transport (DfT), this revenue certainty will provide SAF producers greater assurance over the earnings from the SAF produced in projects such as Altalto, enabling projects to attract the necessary finance. We look forward to engaging further with the DfT and seeing more detail on the mechanism and the timescale in order for the Government target of five plants in construction by 2025 to be met."
https://www.gov.uk/government/news/new-measures-to-support-sustainable-aviation-fuel-industry
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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 Immingham, 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.