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Velocys receives FONSI from USDA for planned Mississippi biorefinery; wood waste to drop-in fuels

Velocys plc announced that the US Department of Agriculture (USDA) has issued a Finding of No Significant Impact (FONSI) on the environmental assessment report for Velocys’ planned Bayou Fuels biorefinery in Natchez, Mississippi. With the FONSI process completed, Velocys will now focus on the next steps in the project’s development,including securing the state-level permits that will be required to construct and operate the biorefinery.

Velocys is pursuing a USDA loan guarantee that could apply up to $200 million of debut as part of the total installed cost of the project.

The USDA 9003 Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (9003 Program) provides loan guarantees to biorefineries, such as those that Velocys and its partners are developing, which produce advanced biofuels. Under this program, a material portion of the project debt is guaranteed by the USDA, accelerating the timeline and financially de-risking the project to final investment decision (FID). Velocys has engaged the global leading project finance bank, Sumitomo Mitsui Banking Corporation (SMBC), as the lender of record and as its financial advisor.

The 160-page environmental assessment report details the impact of the proposed facility across 15 potential aspects, including: land use; water resources; air quality; wildlife; visual impact; noise; transport; and public and occupational health. In each case, the report concludes the plant would have “none”, “none to minor”, or “minor” impacts during construction and operation.

This is a significant step in the permitting of the Bayou Fuels biorefinery as well as an important milestone for the overall development of the project. The environmental assessment provides independent confirmation that the project will not give rise to any significant environmental impacts and reflects our commitment to responsible and safe project development.

—David Pummell, Velocys CEO

The FONSI was issued as part of Velocys’ ongoing development of a 100-acre site in Natchez that the company secured in October 2017. The site will be home to a biorefinery that will use Velocys’ technology to produce low-carbon transportation fuels from the wood wastes of lumber operations and tree plantations.

The plant is expected to convert locally-sourced woody biomass waste into enough renewable fuel to meet the demands of running around 40,000 diesel and gasoline trucks.

No opposing or negative comments were filed as part of the USDA’s public consultation process.

Velocys, originally a developer of microchannel Fischer-Tropsch reactor technology, intends to become a material producer of renewable fuels from sustainable resources. The company’s technology can cost-effectively produce low-carbon drop-in jet and diesel fuels from a variety of waste materials, including woody biomass and municipal solid waste, at a scale that matches feedstock collection logistics. Velocys technology is in use at ENVIA, the world’s first commercial smaller scale gas-to-liquids plant.

Veloycs is using its operational experience and capabilities to drive the development of additional biorefineries in the US and UK with strategic partners from concept to full operations.

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