Manufacturing Biz #2 - Magazine - Page 36
Velocys secures US$40M of
growth capital and begins new
chapter as a private sustainable
aviation fuel technology company
Leading sustainable aviation fuel (SAF)
technology manufacturer Velocys has
begun a new chapter following the
completion of its take-private at the start
of 2024.
As part of the transaction, a new
consortium of growth investors, including
Carbon Direct Capital, Lightrock, GenZero
and Kibo Investments, has infused Velocys
with US$40 million of growth capital.
The funds will be used to accelerate the
delivery of Velocys’ proprietary technology
to customer projects whilst further
building its technology leadership, scaling
its production and enhancing the breadth
and depth of the team’s expertise.
Decarbonising aviation is a critical climate
challenge given the 800 megatonne annual
carbon footprint from airline travel.
Velocys expects demand for sustainable
aviation fuel to accelerate given the
confluence of regulatory support and
higher readiness levels of drop-in fuel
technologies.
New EU rules will require suppliers to
ensure that 2% of fuel made available at
36
EU airports is SAF in 2025, 6% in 2030, 20%
in 2035 and 70% in 2050.
Airlines are also expected to drive the
exponential growth in demand for SAF.
In 2023, more than 490,000 flights were
partially powered by SAF, from just 500 in
2016.
Velocys is a technology company whose
patented catalyst and micro-channel
reactor platform provide a scalable, flexible
solution particularly suitable for projects
that produce SAF.
Velocys’ Fischer-Tropsch technology is
compatible with multiple project types
employing diverse feedstocks, including
municipal solid waste, woody biomass,
and CO2 & green hydrogen, and has
demonstrated performance at commercial
scale.
Velocys’ experience of integrating its
technology into an overall scheme is
highly valuable to clients, allowing them to
maximise lifecycle carbon savings.
Velocys has invested to scale its reactor
facility in Plain City, Ohio, to ensure a
M A N U FA C T U R I N G B I Z M A G A Z I N E | A P R I L 2 0 2 4
stable supply of reactors for delivery to
SAF project owner-operators around
the world. Velocys’ 52,500 square foot
reactor facility will be able to produce an
initial 12 reactors per year, which is the
typical requirement for the operation of a
commercial-scale SAF biorefinery. There
are also plans to ramp up capacity of the
facility as demand for SAF grows.
Henrik Wareborn will continue to lead
Velocys’ management team as the Chief
Executive Officer. The new ownership
consortium – a global syndicate of
climate investors focused on harnessing
technology to accelerate decarbonisation
– has combined expertise, networks, and
specialist scaling support that will better
equip Velocys to contribute meaningfully
to the decarbonisation of the aviation
industry.
Josh Dienstag, Chief Investment Officer of
Carbon Direct Capital, said: “We believe
drop-in fuels are the most promising,
scalable solution to decarbonise aviation
and to deliver climate impact the soonest.
Velocys is a scarce supplier with the
technology readiness, production capacity,