Early stage funding claimed for sustainable aviation fuel facility

Sustainable fuels technology company, Velocys plc, says works have been completed to claim the first multi-million tranche of funding to build a sustainable aviation fuel (SAF) production facility at Immingham.

The scheme, called the Altalto Immingham Sustainable Aviation Fuel Project, will see the conversion of black bin bag waste into liquid fuel on a commercial scale, with operations expected to begin in 2028.

It will be at the centre of the UK’s push to slash carbon emissions from aviation.

Velocys says that further to the award of a grant from the UK Government’s Department for Transport’s (DfT) Advanced Fuel Funds of up to £27m for the project, Altalto Ltd has now completed the work necessary to claim £7m worth of this grant up to 31 March 2023.

In addition, the project has obtained the first tranche of private funding for the period from 1 April 2023 from its existing private sector participants.

The DfT grant and matched funding will enable Altalto to complete the Front-End Engineering Design (FEED) stage of the scheme.

Following completion of FEED and a successful final investment decision, construction will start in 2025.

Since the award of the DfT grant in December, the Altalto Immingham Project has signed technology license and engineering services agreements with project technology licensors and the FEED contract with Bechtel Limited, using the first tranche of money provided by the DfT.

In March 2023, Velocys revealed the appointment of a global investment bank to advise on the financing of its Reference Projects and to assist in obtaining the matched funding from private sector investors, which is on track to be in place during quarter four 2023.

Velocys’ cash contribution to the Altalto Project over two years from April 2023, including its contribution to the first tranche of private funding of £1m, is not expected to exceed £8m.