The Velocys PLC (LON: VLS) share price rose 6.64% after welcoming a consultation paper from the UK government containing various proposals to support and finance the UK’s sustainable aviation fuel (SAF) industry. The company believes the proposals will support the development of its UK flagship project, Altalto Immingham and other UK opportunities.
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Investors cheered the news, given that Velocys could benefit immensely from the proposals as a sustainable aviation fuel (SAF) market leader. The new proposals expand on the recent government grants awarded to SAF companies from the Advanced Fuel Fund.
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The British government is keen to position the UK as a global leader in developing, producing and using SAF by creating robust and growing SAF demand. The government wants to kickstart a domestic SAF industry and partner with industry and investors to create long-term supply.
The consultation paper comes at the right time, amid increasing support for decarbonisation. The proposals support the UK Government's goal of reaching net zero by 2050 and its Jet Zero strategy. The Gasification plus Fischer Tropsch (FT) process has been recognised as the primary pathway to support SAF uptake to 2030 and beyond.
Velocys has a patented FT process that is well-positioned to fulfil the demand for SAF. The proposed SAF mandate guarantees a specific level of demand. It creates a long-term requirement to supply SAF, provides incentives to SAF producers in the form of tradeable certificates and signals the vital role SAF will play in the future of UK aviation.
The tradable certificates will close the gap between the cost of jet fuel and SAF.
Henrik Wareborn, Velocys’ CEO, said: “Velocys' technology is immediately ready to support commercial-scale production of SAF with ultra-low carbon intensity and input from a range of feedstocks. There is a clear groundswell of legislative and policy support for the use of sustainable aviation fuel with the Inflation Reduction Act in the US, the ReFuelEU initiative in Europe and now today's news from the UK. This level of government support is critical, so that industry and policy can work in parallel and at speed to reduce emissions.”
*This is not investment advice.
Velcoys share price.
The Velocys share price rose 6.64% to trade at 3.740p, from Thursday’s closing price of 3.507p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.