Velocys announces Shell withdrawal from Altalto project
Velocys plc announced that, by mutual consent of the parties, Shell International Petroleum Company Limited has withdrawn from the Altalto Joint Development Agreement. Velocys and Shell announced the signing of their joint development agreement for the Altalto project in August 2019.
“Shell is pursuing multiple opportunities across our global portfolio. 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 UK Government, as part of the Jet Zero Council, to help decarbonise UK aviation. We wish Altalto every success in the future,” said Matthew Tipper, Shell VP New Fuels.
The Altalto project has no immediate funding calls and will continue according to its existing development plan. Velocys and British Airways plc will continue to work together in order to secure finance for the Altalto Immingham plant, and will continue the discussions with potential sources of finance for the project, which have been underway for several months and indicate strong interest in this sector. Velocys, British Airways and Shell are continuing to work with Her Majesty’s Government on policy development to support Sustainable Aviation Fuel (SAF) production in the UK.
Velocys and British Airways are grateful for Shell’s support during the initial stages of the Altalto project. As the project progresses, Velocys, British Airways and potentially other new partners will focus on the next stages. Preparations are underway to apply for significant government funding for the Immingham project. Whilst there is no guarantee that such an application would be successful, Velocys believes that the project is well placed to achieve this.
Following the changes above, Shell will no longer have an option over shares in Altalto Limited, nor any rights or obligations in relation to the Altalto project. There is no direct financial impact on Altalto or Velocys as a result of these changes.
“We are looking forward to moving Altalto Immingham to the next stage of development in 2021. 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 decarbonisation of aviation, especially using waste feedstocks,” said Henrik Wareborn, Velocys CEO.
“Sustainable Aviation Fuel (SAF) is vital to the decarbonisation of aviation and to helping us achieve our net zero target. The formation of the Jet Zero Council and the recent launch of its Sustainable Aviation Fuels Delivery Group are testament to the importance that the government attaches to SAF. We are excited to continue to work with Velocys, with the support of Government and other private-sector partners,” said Sean Doyle, British Airways CEO.