Velocys: Shell withdraws from sustainable aviation fuel project

Velocys announced on Jan. 18 that Shell International Petroleum Co. Ltd. will no longer participate in the development of the Altalto Immingham project, a proposed 20 MMgy sustainable aviation fuel (SAF) production facility under development in the U.K.

A statement released by the company explains that Shell was withdrawn at the Altalto Joint Development Agreement by mutual consent of the parties. Velocys, British Airlines and Shell, however, will continue to work with the U.K. government on policy development to support SAF production.

According to Velocys, the Altalto project has no immediate funding calls and will continue according to its existing development plan. The company said it will continue to work with British Airways plc to secure finance for the project and will continue the discussions with potential sources of finance for the project.  Velocys also noted that preparations are underway to apply for significant government funding to support the Immingham project.

“Shell are pursuing multiple opportunities across our global portfolio,” said Matthew Tipper, vice president of new fuels at Shell. “On this occasion, we have decided to focus our resources on other lower-carbon fuels opportunities which leverage our own technology. We will continue to work with the aviation industry and the U.K. government, as part of the Jet Zero Council, to help decarbonize U.K. aviation. We wish Altalto every success in the future.”

“We are looking forward to moving Altalto Immingham to the next stage of development in 2021,” said Henrik Wareborn, CEO of Velocys. “Altalto Immingham is the most advanced commercial SAF project in the UK and is ready to take advantage of the strong push from both Government and industry for the decarbonization of aviation, especially using waste feedstocks.”

Once operational, the proposed Altalto facility will take in municipal solid waste as feedstock and produce 20 million gallons per year of SAF and naphtha. The North East Lincolnshire Council’s planning committee granted planning permission for the project in mid-2020. Velocys currently aims to reach financial close on the project in 2022.

Velocys is also pursuing the development of a 25 MMgy biorefinery in Mississippi. According to information released by the company, a federal loan guarantee application for that facility is in process with financial close targeted for the fourth quarter of this year.