British Airways waste-to-fuels project with Velocys secures £4.9m funding including a UK government grant
Fri 22 June 2018 – The British Airways municipal solid waste (MSW) to jet fuel project with renewable fuels company Velocys has secured funding totalling £4.9 million ($6.6m) to deliver the next development phase. The package includes a grant of £434,000 ($580,000) from the UK Department for Transport (DfT) under the Future Fuels for Flight and Freight Competition. UK Transport Secretary Chris Grayling said the project had the potential to transform the aviation industry by reducing greenhouse gas emissions and improving air quality. The remainder of the funding has been committed by the project’s two partners and Shell. The next phase, expected to be completed in early 2019, will include a detailed pre-front end engineering and design (FEED) study and identification of a potential site for the production plant.
The award of the DfT grant, together with the new policy support provided by the Renewable Transport Fuel Obligation (RTFO), were welcomed by the project partners. “We are very pleased that the government has recognised the importance of alternative fuels for aviation and has supported our joint project with Velocys that will help to reduce carbon emissions and create UK jobs and growth,” said British Airways CEO Alex Cruz.
The BA/Velocys project follows the airline’s ill-fated partnership with Solena that folded in November 2015 (see article), having failed to attract the necessary funding or gain government support at the time. That project had undertaken an engineering study and also identified a location for the production site, an ex-refinery by the River Thames estuary to the east of London.
The next phase of the new project will choose a location from a short-list that has been drawn up and then obtain the relevant planning permissions before the start of site permitting activities. Subject to a final investment decision that is expected to be taken in the first half of 2020, the plant would take hundreds of thousands of tonnes – the partners have not yet been more specific on production capacity – of post-recycled waste, destined for landfill or incineration, and convert it into sustainable fuels. The jet fuel produced is expected to deliver greenhouse gas emission reductions of over 70% and a 90% reduction in particulate matter emissions compared with conventional jet fuel.
Velocys will lead the project and has committed £1.5 million ($2m) to this next development phase, a significant proportion of which, it says, is in the form of an in-kind contribution. The company is listed on the AIM market of the London Stock Exchange and capitalised at around £40 million ($53m), with 25% of the shares held by Russian oligarch and Chelsea FC owner Roman Abramovich.
“Successful funding of this next development phase further demonstrates the strength of Velocys’ renewable fuels business,” said David Pummell, CEO of Velocys. “Today the UK has taken another step forward towards becoming a world leader in low carbon aviation. Government funding, recent policy changes and successful completion of the feasibility study have enabled Velocys and its partners to move forward to the next phase in developing the UK’s first waste-to-renewable jet fuel plant.”
UK-based Advanced Plasma Power (APP) has been selected as the preferred gasification technology licensor for the project. The company offers a conversion solution of waste to synthesis gas before onward conversion to fuels through Velocys’ Fischer-Tropsch process. APP says its Gasplasma process combines two well-established technologies – gasification and plasma treatment – that have decades of proven commercial operation.
Velocys reports it will be working with APP during the pre-FEED stage and, subject to appropriate conditions being met, intends to use its technology for the project.
Having recently announced a sustainable aviation fuels (SAF) strategic tie-up with Dutch supplier SkyNRG (see article), oil major Shell will supply technical support to the project.
“Shell’s ambition is to be a leader in advancing the sustainable solutions that can deliver a low carbon future for the aviation industry,” said Anne Anderson, Vice President Global Aviation. “In addition to combining innovative technologies with a diverse set of technical expertise and industry backgrounds, this project brings together partners across the aviation industry that share this aim. Biofuels can play a valuable role in a future low carbon energy system, and especially in sectors like aviation where the alternatives to liquid fuels are limited.”
The changes to the RTFO that came into effect in April, which now enable renewable jet fuels to qualify for credits under the scheme (see article), will boost the long-term viability of the project, believe the partners.
“The waste-to-jet fuel project has the potential to help transform the aviation industry by reducing greenhouse gas emissions and improving the air quality around our country’s airports,” said the Transport Secretary. “That is why we are providing support to this important technology as part of our £22 million of funding [see article] for alternative fuels, which will pave the way for clean growth in the UK.
“Supporting important developments like this is just part of our work to help ensure our aviation sector is greener than ever, and we will explore further measures as part of our Aviation Strategy.”