Velocys signs carbon dioxide storage deal with OLCV
Velocys has signed an agreement with Oxy Low Carbon Ventures (OLCV) to capture carbon dioxide from its planned Bayou Fuels biomass-to-fuels project in Natchez, Mississippi, and securely store it underground in a geologic formation, it announced on Thursday.
The AIM-traded firm said OLCV - a wholly owned subsidiary of Occidental - would take, transport and store carbon dioxide captured from the Bayou Fuels facility, when it is completed, enabling the production of transportation fuels that had a net negative carbon intensity, making it the first facility of its kind in the world.
It explained that the Bayou Fuels project would take waste woody biomass and convert it into transportation fuels, such as diesel for heavy trucks and sustainable aviation fuel, using Velocys' proprietary Fischer Tropsch process.
The integrated technical solution designed by Velocys was said to be “ideally suited” to carbon capture, usage, and storage, with the carbon dioxide captured before it entered the atmosphere.
OLCV was “uniquely positioned” to transport and store the carbon dioxide by leveraging Occidental's industry leadership in the storage and utilisation of the gas, Velocys explained.
That combination of technology and Occidental's expertise in storing carbon dioxide would enable the Velocys facility to produce net negative carbon intensity fuels.
Integrating carbon capture, usage and storage into the Bayou Fuels biorefinery would increase certain targeted revenue streams, the board claimed, such as those derived from the California Low Carbon Fuels Standard, and US 45Q tax credits that incentivised the installation of carbon capture equipment on industrial facilities.
That would have a “meaningful positive impact” on returns, Velocys confirmed.
It would also help to de-risk the project and others that followed it.
The proposed carbon capture, usage and storage solution could be replicated at other sites under development, including Velocys' UK project, which recently submitted a planning application to build Europe's first commercial scale waste-to-jet fuel facility.
“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 Velocys chief executive officer Henrik Wareborn.
“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, Wareborn said, was why the company would be capturing carbon dioxide as a by-product from the gasification process at its 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 UK facility in Immingham will be able to benefit from this technology, subject to UK Government support for carbon capture, usage and storage deployment and the availability of transportation and storage infrastructure in the Humber region.”