Bayou Fuels Project Promotes Carbon Savings

Velocys plc, a sustainable fuels technology company, announced that its proposed facility Bayou Fuels in Natchez, Miss. has been re-optimized for maximum decarbonization to a negative carbon intensity of -375g CO2e/MJ (previously -144g CO2e/MJ), abating the carbon emissions from the equivalent of 1.1 million return economy trips from San Francisco to London per annum.

The significant improvement in negative carbon intensity has the potential to increase future revenue for Bayou Fuels and enhance the attractiveness of the project for third party project funding. In particular it will allow the Bayou Fuels project to derive maximum benefit from the 45Z tax credits under the Inflation Reduction Act of 2022, which incentivizes the total amount of avoided carbon instead of the volume of sustainable fuel supplied, thus prioritizing those technologies which offer routes to negative carbon-intensity fuels.

The Bayou Fuels project, which is expected to enter production in 2026, will now use renewable energy derived from sustainable biomass power instead of solar power which will approximately double the carbon savings for its aviation customers, thereby enabling maximum carbon abatement from the Velocys conversion pathway. The Bayou Fuels SAF (Sustainable Aviation Fuel) prospective carbon intensity of -375 g CO2e / MJ avoids more than 15 times as much CO2 as a typical HEFA SAF gallon from soybean oil.

Velocys carried out preliminary boiler engineering evaluations, identified the most appropriate carbon capture system, confirmed the availability of sustainable biomass and re-evaluated the layout of the overall facility in order to validate the use of biomass power at the plant.

Henrik Wareborn, CEO, comments, “The Inflation Reduction Act means that future SAF production must focus on the number of tonnes of avoided carbon and not gallons of fuel produced. The use of biogenic feedstock, biomass power and CCS at our project in Mississippi equates to a yearly reduction of 1.8 million tonnes of carbon and means our technology is ideally positioned to benefit from the SAF tax credits of the IRA.”

The facility will be first of its kind and Velocys’ agreement with Oxy Low Carbon Ventures, LLC (OLCV) will take these environmental benefits a step further through CCS, whereby Bayou Fuels CO2 will be captured before it enters the atmosphere. This combination of CCS-ready technology and OLCV’s expertise in storing CO2 will enable the Velocys’ facility to produce net negative carbon intensity fuels.