Velocys to integrate CCUS at Mississippi biorefinery

By Erin Voegele | October 10, 2019

Velocys plc announced plans Oct. 10 to capture and store carbon dioxide generated at its proposed Mississippi biorefinery, enabling the production of carbon-negative biofuel. The company also recently announced its technology will be deployed in Japan.

Velocys Inc., a wholly owned subsidiary of Velocys plc, announced Oct. 10 it has signed an agreement with Oxy Low Carbon Ventures LLC, a wholly owned subsidiary of Occidental Petroleum Corp., to capture carbon dioxide from its proposed Bayou Fuels biomass-to-fuels project in Natchez, Mississippi, and store it underground in a geologic formation. As a result, Velocys said the biobased fuels produced at the facility will have a net-negative carbon intensity.

According to Velocys, the Bayou Fuels project will convert woody biomass into transportation fuels, including diesel and aviation fuel, using the company’s proprietary Fischer-Tropsch process. The company said its integrated technical solution is ideally suited to carbon capture, usage and storage (CCUS). In turn, Velocys said OLCV is uniquely positioned to transport and store the resulting carbon dioxide by leveraging Occidental’s industry leadership in CO2 storage and utilization.  

“We want this facility, and others that will follow, to be as environmentally friendly as possible and offer attractive opportunities for partnerships with major energy companies,” said Henrik, Wareborn, CEO of Velocys. “We don’t just want to deal with waste materials and produce cleaner burning fuels—we want the process that produces the clean fuels to be as sustainable as possible as well.

“That is why 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 U.K. facility in Immingham will be able to benefit from this technology, subject to U.K. government support for CCUS deployment and the availability of transportation and storage infrastructure in the Humber region,” Wareborn continued.

“Carbon capture, utilization, and sequestration is essential to reducing the carbon intensity of the transport sector and achieving global climate goals,” said Richard Jackson, president of OLCV. “This project illustrates how CCUS can enable production of zero-carbon and negative-carbon fuels.

“Occidental is uniquely positioned to develop and operate CO2 sequestration facilities based on our 40 years of experience injecting CO2 for enhanced oil recovery,” Jackson continued. “We are excited to build on this experience to support Velocys in a strategic partnership to produce negative-carbon intensity fuels.”

Velocys also recently announced its FT technology will be deployed in Japan. The company announced Sept. 9 it has secured a purchase order and technical services agreement with Toyo Engineering Corp. for the use of Velocys technology in a publicly funded demonstration facility in Nagoya, Japan. The order also includes an advanced deposit for the use of Velocys technology by Toyo in a subsequent commercial plant.

According to Velocys, the company will supply its FT technology, equipment and catalyst for a biomass-to-jet fuel demonstration facility currently under construction by a consortium of Japanese companies. In addition, Velocys has agreement that it will grant an exclusive right for Toyo to secure and use the license and technical services of the Velocys FT Technology for a future potential commercial plant in Japan.

The day before the Japan announcement was made, Velocys released interim results for the first half of 2019. In a statement, Wareborn called 2019 “a positive year for the company.” He said Velocys has already delivered the first reactor and all catalyst charges to Oregon-based Red Rock Biofuels, and noted the manufacturing of the remaining reactors is advancing. “We are now focusing all our efforts on commercial delivery—for our client in Oregon and for our two projects in Mississippi, USDA (Bayou Fuels) and Immingham, U.K. (Altalto),” he said.

Information released by the company indicates the Bayou Fuels project will source electricity from solar. When combined with the CCUS plans for the facility, the project’s carbon score will be significantly reduced, which Velocys said will significantly improve project returns and create an attractive differentiator for investment. For the Immingham project, the company said all pre-front end engineering and design (pre-FEED) work is complete and the project’s planning application has been submitted to the government. The company said funding received from project partners following the close of the second quarter has ensured the project can reach the FEED stage in the next few months.

Velocys reported revenue of £22,000 ($27,365) for the first half of the year, compared to £392,000 for the same period of last year. Operating loss was £5.2 million, compared to an operating loss of £11 million for the first half of 2018.