Velocys posts £5.7m loss but the sustainable fuels tech industry future is bright, it promises
Sustainable fuels technology company, Velocys. which is based at Oxford Science Park, has posted losses before income tax of £5.7 million in its interim results for the six months ended 30 June 2022.
But is the company downhearted? No.
Earlier this year, the company announced that its subsidiary, Altalto Immingham Ltd, had sold its 100 per cent interest in Rula Developments (Immingham) Limited to Foresight Group. RDIL owns the site for the proposed Altalto waste-to-sustainable-fuel project, which is being developed in collaboration with British Airways.
Henrik Wareborn, CEO of Velocys, explained: "Our interim results show tangible progress with multiple milestones reached over the course of the period. Our new Ohio Technical Centre is well into its construction phase. Here, our technology and licensing services will be consolidated under one roof, providing a fully integrated client delivery and service offering domestically and globally. The facility is on schedule to be completed and commissioned next year.
"We welcomed Foresight Group who demonstrated their support for Velocys and Altalto through the purchase of the Altalto site owner giving the project permanent site control with an option for repurchase. We continue to have a strong partnership with British Airways and their commitment to the Altalto project represented through their extension of our Joint Development Agreement and Option Agreement.
"The launch in the UK of the "Jet Zero" strategy was well-received and sets out the Government's approach to achieving "net zero" aviation by 2050. This stated an ambition for a minimum of five commercial-scale SAF plants to be under construction in the UK by 2025, and a mandate for the equivalent of at least 10% SAF to be blended into conventional aviation fuel by 2030. Both these initiatives bode very well for Altalto which is exactly the type of commercial-scale SAF plant the UK Government is seeking. We look forward to the outcome of the Government's pledge to further work with industry to create the long-term conditions for investable projects in the UK.
"The landmark climate legislation passed in the US, the "Inflation Reduction Act of 2022", focusses on the total amount of avoided carbon and not solely on sustainable fuel supplied. Bayou Fuels, our project in the US, is well positioned to benefit from such legislation because of its low carbon footprint, and continues to progress, exploring a route to achieving an even lower carbon intensity score. The targeted commencement of FEED next year will be a key milestone following which Velocys expects to generate licence revenue from the project.
"We have strengthened the business and organisational design by recruiting world class scientific and commercial talent in Ohio, Houston and Oxford and continue to build our network of potential partners to accelerate commercialisation.
"The progress we have made, alongside the policy tailwinds, creates a solid platform for the Company to deliver. Our outlook remains targeted and selective as we continue on the path of capital-light scalable growth. The ultra-low negative carbon intensity synthetic aviation fuel enabled by Velocys' IP-protected technology provides a solution to fuel independence and a pathway to sustainable aviation. We look to the future with confidence."
