The UK Department for Transport’s (“DfT”) Advanced Fuels Fund awards Altalto Immingham Ltd a grant of up to £27 million for the Altalto Immingham Sustainable Aviation Fuel (“SAF”) project.
Velocys plc, the sustainable fuels technology company, made the announcement on behalf of its wholly owned subsidiary, Altalto Immingham Ltd.
The grant funding will be used for the completion of the project FEED, Velocys says. The company says the project will incorporate the technology packages of the licensors and develop the basis for the Engineering, Procurement and Construction (“EPC”) contract.
The purpose of this project, which is being developed under an existing Joint Development Agreement between Velocys and British Airways PLC (“British Airways”), Velocys says is to deliver a commercial waste-to-SAF plant in Immingham.
The company says the grant will allow Altalto Immingham to deliver the Front-End Engineering Design (“FEED”) stage of the project.
The grant funding will be distributed over the grant period from December 2022 to March 2025 and is conditional upon receipt of private-sector matched funding.
We welcome this clear commitment from Government to having commercial SAF plants built in the UK.
Velocys says Altalto Immingham has obtained letters of intent from several existing and new potential partners for the private-sector matched funding requirement with the first tranche of private funding due to be in place by April 2023.
Velocys says its cash contribution to the Altalto Immingham project over the two years from April 2023 is not expected to exceed £8 million, and this sum may be reduced by bringing in additional investors into the project.
The £165 million Advanced Fuels Fund provides grants to support the development of commercial-scale SAF plants that are at an advanced stage, enabling them to become ready for investment and construction.
The funding is aimed at achieving the UK Government’s stated ambition of having at least five commercial-scale SAF plants under construction in the UK by 2025.
We are delighted that a number of large commercial companies have indicated their support for the project.
The key objective of the Advanced Fuels Fund is to kick-start the UK advanced fuels sector with the commercial deployment of fuel production technologies that are capable of significantly reducing near-term UK aviation carbon dioxide emissions.
Commenting on the announcement, Henrik Wareborn, CEO, said: “We are extremely pleased the UK Government has awarded Velocys this important grant which will deliver the FEED stage for our Altalto Immingham reference project accelerating the commercial deployment of Velocys’ technology and delivering cashflow.
“We welcome this clear commitment from Government to having commercial SAF plants built in the UK. We are delighted that a number of large commercial companies have indicated their support for the project through indications of matched funding contribution and the provision of services to progress the project.”