Velocys: How the Humber could be home to high-growth green jet-fuel refining

By Grimsby Telegraph | Posted: 20 Dec 2018

The South Humber Bank could soon welcome a refinery dedicated to producing green jet fuel for UK flag carrier British Airways. Business editor David Laister met the team heading up the huge development, first unveiled yesterday.

FROM one of Britain’s most prestigious academic institutions to its industrial heartland, a pioneering 20 year journey to lower aviation’s harmful emissions looks set to come to Stallingborough.

Using a highly technical process, waste from homes and businesses will be transformed into jet fuel at a level capable of covering off several Transatlantic routes, easing two environmental issues while providing scores of jobs.

And it is a merger across the pond that first enabled the opportunity, unveiled now after a land deal was signed that will allow it to capitalise on the industrial strengths and green ambitions of North East Lincolnshire.

VIDEO: Velocys chief executive Henrik Wareborn underlines why Stallingborough appealed.

Launched just after the millennium as a spin out of an Oxford University research and development project, Ohio-based Velocys and Oxford Catalytics’ coming together united complementary technologies.

Henrik Wareborn, formerly BP’s global commodity head for crude oil and latterly global head of commodities trading at France's second largest banking group, Natixis, is chief executive. Together with the team he is delighted to have secured a three-year exclusive option on the Stallingborough location, a significant element in realising a vast amount of work, and - as he explained - key to unlocking financial backing.

“All the funding conversations start when you have a site,” he said. “We have informed shareholders, and while Shell and British Airways are supporting the project, you cannot put a financeable project forward unless you have a site. This is a critical step towards achieving financeable status.”

Shedding more light on why the South Humber Bank appealed, he said: “It is an ideal location for its heritage in petrochemicals and oil refining. The skills set is here, the infrastructure here, and it is a central location for supplying feedstocks to our biorefinery and also supplying product, with the proximity to the likes of Manchester Airport, which is very important.

Sky's the limit: Velocys chief executive Henrik Wareborn, centre right, is welcomed to Grimsby by North East Lincolnshire Council leader Ray Oxby atop Municipal Offices. Also pictured, from left, Martin Hopkins, project advisor, Velocys; Councillor Peter Wheatley; David Robinson, investment officer at NELC; Rob Walsh, chief executive of NELC and Paul Ticehurst, commercial director at Velocys.

“When it came to selection, we evaluated it vary carefully, against a range of sites across the UK. It was a very rigorous process, a year at least, as we really want to be sure about the decision. Once you are in to this, it is difficult to change.

“Getting to this stage, now, allows us to line up potential supply of feedstock. We can have real, tangible conversations beyond letters of interest. It also allows us to look at the supply of all the other utilities that we need and the planning process. We intend to submit planning application by the middle of next year. That is an aggressive time line, but we want to push ahead. Time is the most valuable asset we have and if there is any way we can speed up production and revenues by being able to supply three or four months earlier, then it becomes the most important variable of the project.”

While pace is crucial now, it has been quite a process.

“Working on this since 2001 may seem like a long time, but in research and development, for biotechnology, immunology, and advanced technical markets, a couple of decades is the norm. “We have spent 17 years proving it, we know the detail, the technology, and the integration that we propose has been tested at least in the same degree as our proprietary technology. They are heavily proven components.” 

Plot and partners: Where and who is involved, with the aerial view looking west along the South Humber Bank from above the former Courtaulds site in Grimsby.

Velocys forecasts a 70 per cent greenhouse gas reduction and 90 per cent reduction in particulate matter emissions compared with conventional jet fuel, contributing to both carbon emission reductions and air quality improvements around major airports.

It receives waste once recycling options have been exhausted, with Port of Immingham one of several routes currently used to ship out to other countries with landfill exhausted.

From trade-trained technicians and engineers to PhD graduates, between 50 and 100 direct jobs are envisaged, with hundreds in construction. 

“We are going to produce a finished product. The product is identical to current specification, and while British Airways may choose to blend it with some fossil fuels, it would be suitable as a complete substitute,” Mr Wareborn said. 

This bodes well for potential work with Total Lindsey Oil Refinery, which has a direct pipeline to Heathrow too, another “advantage” of the site.

The fuel produced would comfortably accommodate several Transatlantic routes for Britain's flag carrier.

“We have the option to blend, mix and store with liquid fuels at an existing refinery, so being here is an advantage. In the oil industry this happens all the time,” he said.

Working with BA for five years, Shell has also come on board to offer further technical advice.  

“We wouldn’t be here without them supporting us from day one,” Mr Wareborn said. “We are hugely grateful for their support, we couldn’t get better partners.”

Velocys is developing a similar scheme in the US, though geared to be fed by wood pellets from forestry waste, as seen with Drax and the Immingham Renewable Fuels Terminal. “They will benefit from each other hugely,” he said, of the dual developments. 

“That is at a slightly more advanced stage. Once you get to gasification the technology is the same, and it has gone from test tubes to in-field demonstration in a number of different places, before at Oklahoma, where we did 10 to 50 times higher capacity tests on a sub-commercial level beyond demonstration.  It has had 5,000 hours of run time. That qualifies to us that we can build a plant with 12 reactors here on the Humber.  We have run a plant for one and a half years and now we are going from two reactors to 12, which is a comfortable advance.”

Fuelling ambition: Shell will provide technical input. 

A financial investment decision is anticipated in 2020, with a three year window to decide on taking the option on the enterprise zone land off Hobson Way. 

“If we can’t break ground in five years we have failed,” Mr Wareborn said. “We set ourselves a target, and I am adamant we are going to beat it with a margin and break ground in three years. When we do break ground we want the detailed engineering to be completed too. We don’t want to invent as we go.”

The site once coveted by Spanish biorefining giant Abengoa was first seen a year ago.

Paul Ticehurst, commercial director, described the site decision as “a first step in a long journey to get to a low carbon fuel for aircraft”. He said: “We first visited about a year ago. We had a number of different parts of the UK we were looking at. We had some high level criteria, and one of the key points was a receptive local authority. That is one of the reasons why we are here. North East Lincolnshire has been extremely welcoming at all stages.” 

The size of the site as well, is all about potential, Mr Wareborn added. 

“This is the first one, the first meaningful volume will come from this facility. It then greatly reduces the cost of capital and time to market for the next plant. It is the ideal location, and a supportive local community for a first plant is absolutely critical. The chance of a second plant being next door to the first plant is very, very high, as the last thing you want to do is build somewhere else. It is very clever for any community to take a risk on integrational technology as the natural choice for a second, third, fourth or fifth plant is pretty high to be here.”

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