British Airways-backed plans for groundbreaking sustainable jet fuel plant in region get £27m boost

A sustainable fuels technology company called Velocys has announced its subsidiary Altalto Immingham has been awarded a grant of up to £27m from the Department for Transport’s Advanced Fuels Fund.

The money will go towards making the Altalto Immingham Sustainable Aviation Fuel (SAF) project a reality and is focused on the Front-End Engineering Design (FEED) element of the work.

The site is expected to be Europe’s first commercial scale waste-to-jet-fuel facility. It will process household and commercial waste destined for landfill or incineration.

The project is being developed under an existing joint development agreement between Velocys and British Airways as part of wider attempts by the airline industry to move away from the use of fossil fuels to power planes.

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.

The first tranche of private sector funding is expected to be in place by April 2023, with the company’s own contribution into the project over the two years from then not expected to exceed £8m.

A final investment decision on whether the plant can go ahead is due to be made in 2025.

Under the current plans, commissioning of the project is expected to begin in 2027.

Velocys has previously received grants for the Altalto Immingham project of £1.7 million from the DfT’s Green Fuels, Green Skies competition and a series of grants totaling £934,000 from the Future Fuels for Flight and Freight competition, the predecessor to Green Fuels, Green Skies.

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 Government is seeking to have at least five commercial scale SAF plants under construction in the UK by 2025.

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.”

Velocys has also been awarded a grant of £2.5 million from the same DfT fund to contribute its technology to an e-fuels project in the UK in collaboration with a number of new and existing partners.

Mr Wareborn said: “This award shows strong commitment from the Government to accelerate the DfT’s Jet Zero strategy for achieving net zero aviation by 2050.”