Green jet fuel developer Velocys has welcomed early revenues as a first major commercial customer contract saw it significantly narrow operational losses.
The company behind British Airways-backed plans for a refinery on the South Humber Bank turned over £8.2 million in the first half of 2021.
Licence fees and sales of reactors and catalyst equipment brought in the funds.
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Henrik Wareborn, chief executive, said: “Our interim results demonstrate that Velocys has achieved an important milestone, recognising £8.2 million of revenue and £3.3 million gross profit in HY2021 from our first major commercial customer contract.
“The downwards trend in our operating loss continued, declining to £2 million from £2.6 million in HY 2020, £5.2 million in HY2019 and £11 million in HY2018. This shows that the company is controlling its spending well whilst also delivering to our customers and progressing our two reference projects towards funding for their front end engineering design stages and then onto financial close.
“At the same time, I am pleased with the safe and efficient operational performance of Velocys despite the challenges of Covid-19, and excited about the sustainable fuels market dynamics and the business development opportunities available to us for the short, medium and long term.”
Velocys has secured £2.4 million from the government’s Green Fuels Green Skies competition to progress the Altalto site at Stallingborough, near Grimsby - enough to cover the advancement over the next seven months.
Mr Wareborn said continued technical development of the project and discussions to drive UK Government policy to support future funding were ongoing.
It is targeting completion of fuel offtake agreements for the project ahead of completion of substantial third-party FEED project funding, anticipated in the first half of 2022.
The company believes securing that will significantly de-risk funding for the remainder of the project, to financial close.
It is also developing Bayou Fuels refinery in Mississippi, USA, and was referenced by the Biden Administration earlier this month as an extensive programme of policy support to accelerate the supply of sustainable aviation fuels was announced.
Mr Wareborn added: “Whilst there is a significant lead time to construct and deliver commercial scale biorefineries, Velocys is confident that having first of a kind projects in FEED with world leading partners will provide us with many more commercial opportunities to offer executable pathways to achieve the ‘net-zero’ targets of our clients globally.”
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