10th Oct 2019 11:25
(Alliance News) - Velocys PLC on Thursday said it has signed a carbon dioxide capture agreement with Oxy Low Carbon Ventures LLC for the UK company's planned Bayou Fuels facility in Mississippi.
Shares in Velocys were up 5.9% at 1.78 pence in London in late morning trade.
The agreement will involve capturing CO2 from Velocys's planned biomass-to-fuels project in and then storing the gas securely underground and has been signed with Oxy Low Carbon, a subsidiary of Occidental Petroleum Corp.
Oxy Low Carbon "will take, transport and store CO2 captured from the Bayou Fuels facility, when it is completed". This allows for production of fuels with a net negative carbon intensity, making Bayou Fuels "the first facility of its kind in the world".
The Bayou Fuels project will use waste woody biomass to make transportation fuels, including "diesel for heavy trucks and sustainable aviation fuel".
Adding Oxy Low Carbon to the biofueld refiner raises some revenue streams, including from the California Low Carbon Fuels Standard, and US 45Q tax credits. As such, it will have " a meaningful positive impact on returns".
Velocys said the deal aids in de-risking the Bayou Fuels project, as well as "others that follow it". The carbon storage solution can also be replicated elsewhere, including Velocys' UK project for which it submitted a planning application in August. The UK project is to be built in north east Lincolnshire and will be "Europe's first commercial scale waste-to-jet fuel facility".
Chief Executive Henrik Wareborn said: "We will be capturing CO2 as a by-product from the gasification process at our Mississippi facility. This will make the facility a net negative emitter of carbon dioxide, which is highly desirable from both an environmental and an investment point of view.
"This carbon negative solution could be replicated at other Velocys sites, so we hope our proposed UK facility in Immingham will be able to benefit from this technology, subject to UK government support for [carbon capture, usage, and storage] deployment and the availability of transportation and storage infrastructure in the Humber region."
By Anna Farley; [email protected]
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