UK-headed advanced biofuels technology developer Velocys plc has announced that it has received a “notice to proceed” action to commence manufacturing of the Fischer-Tropsch (FT) reactors and catalyst for US-based advanced biofuel project developer Rock Biofuels LLC (RRB) biorefinery that will be built in Lakeview, Oregon. RRB has commenced construction of the biorefinery, which will incorporate Velocys’ technology, and produce low-carbon, renewable diesel, and biojet fuel.
According to Velcocys, Red Rock Biofuels (RBB) has commenced construction of its biorefinery, which will incorporate Velocys’s gas-to-liquid technology (GTL) technology, and produce low-carbon, renewable diesel, and biojet fuel. Velocys’ role will be as a licensor for its technology to the project.
A subsidiary of IR1 Group LLC that has 325 million (US) gallons (≈ 1.23 billion litres) of installed biofuels capacity, RRB’s biorefinery in Lakeview will convert forestry residues into 15 million (US) gallons (≈ 56.7 million litres) per year of renewable transportation fuels including green diesel and biojet fuel. RRB has off-take contracts in place from Southwest Airlines and FedEx Express for 100 percent of the annual biojet fuel produced.
RRB’s Lakeview project is expected to deliver around US$15 million revenues to Velocys during the construction and early operation stages of the plant, and an additional US$30 million or more over the life of the biorefinery. Over US$6 million has already been invoiced and received from RRB.
Significant potential
With a broad international agreement in the aviation industry for carbon-free growth beyond 2020, airlines are actively seeking low-carbon jet fuel to reduce their greenhouse gas emissions. The civil aviation industry alone will require around 1.5 billion gallons per year of new renewable jet fuel production capacity to meet this commitment.
According to Velocys, its small-scale gas-to-liquid technology (GTL) technology, both via licensed third party projects like RRB’s biorefinery, or through own projects such as the Natchez, Mississippi project, will supply the aviation and road haulage industries with a scalable, sustainable supply of fuel.
By using forest and sawmill residues, RRB’s biorefinery will not only avoid competition for agricultural resources but also reduce the risk of catastrophic wildfires by removing waste biomass from overgrown forests. It will also help to regenerate the local forestry industry.
This is a very important milestone for Velocys, our second commercial license sold; our first licence being ENVIA. Our technology positions us at the forefront of this huge market opportunity. RRB’s success is a significant milestone for the sector, one that further demonstrates the market’s appetite for renewable transportation fuels. The successful funding of this project is a validation of the commercial viability and bankability of Velocys’ technology. The licensing of our technology to RRB is complementary to our strategy to develop our own biorefineries, the first of which will be located in Natchez, Mississippi, said David Pummell, CEO of Velocys.
