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Shares of Velocys PLC (LON: VLS) fell 31% after announcing that Shell International Petroleum Company Limited (Shell) had withdrawn from the Altalto Joint Development project, which has no immediate funding calls and will proceed as planned.

Velocys shares fell back into the 6-month sideways trading range they just broke out at the start of the year, and it will be interesting to see how the shares trade over the next few days.

The company, which aims to produce sustainable fuels for the airlines and heavy transport sectors, said that it would continue working with British Airways plc to secure funding for the Altalto Immingham plant and keep engaging in discussions with potential finance sources for the project.

Velocys thanked Shell for its support during the initial stages of the project.

Henrik Wareborn, Velocys CEO, said: “We are looking forward to moving Altalto Immingham to the next stage of development in 2021. Altalto Immingham is the most advanced commercial SAF project in the UK and is ready to take advantage of the strong push from both Government and industry for the decarbonisation of aviation, especially using waste feedstocks.”

Sean Doyle, British Airways CEO, said: “Sustainable Aviation Fuel (SAF) is vital to the decarbonisation of aviation and to helping us achieve our net zero target. The formation of the Jet Zero Council’s formation and the recent launch of its Sustainable Aviation Fuels Delivery Group are testament to the importance that the Government attaches to SAF. We are excited to continue to work with Velocys, with the support of Government and other private-sector partners.”

Matthew Tipper, Shell VP New Fuels, said: “Shell are pursuing multiple opportunities across our global portfolio. On this occasion, we have decided to focus our resources on other lower-carbon fuels opportunities which leverage our own technology…We wish Altalto every success in the future.”

Velocys share price

Tradingview chart of Velocys share price 18012021

Velocys shares crashed 31.07% to trade at 7.10p having fallen from Friday’s closing price of 10.3p.

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