Negative-emission fuel agreement

Velocys’ Bayou Fuels project set to produce negative emission fuels after signing CCUS agreement with Oxy Low Carbon Ventures

Velocys, Inc., a wholly owned subsidiary of Velocys plc (Velocys), announced today it has signed an agreement with Oxy Low Carbon Ventures, LLC (OLCV), to capture carbon dioxide (CO2) from Velocys’ planned Bayou Fuels biomass-to-fuels project in Natchez, Mississippi, and securely store it underground in a geologic formation.

OLCV, a wholly owned subsidiary of Occidental, will take, transport and store CO2 captured from the Bayou Fuels facility, when it is completed, enabling the production of transportation fuels that have a net negative carbon intensity, making it the first facility of its kind in the world.

The Bayou Fuels project will take waste woody biomass and convert it into transportation fuels, such as diesel for heavy trucks and sustainable aviation fuel, using Velocys’ proprietary Fischer Tropsch process. The integrated technical solution designed by Velocys is ideally suited to carbon capture, usage, and storage (CCUS); the CO2 is captured before it enters the atmosphere. OLCV is uniquely positioned to transport and store the CO2 by leveraging Occidental’s industry leadership in CO2 storage and utilisation. This combination of CCUS-ready technology and Occidental’s expertise in storing CO2 enables the Velocys facility to produce net negative carbon intensity fuels.

Integrating CCUS into the Bayou Fuels biorefinery increases certain targeted revenue streams, such as those derived from the California Low Carbon Fuels Standard, and U.S. 45Q tax credits that incentivise the installation of carbon capture equipment on industrial facilities. This has a meaningful positive impact on returns. It also helps to de-risk the project and others that follow it. The proposed CCUS solution can be replicated at other sites under development, including Velocys’ UK project which recently submitted a planning application to build Europe’s first commercial scale waste-to-jet fuel facility.

Henrik Wareborn, CEO at Velocys said:

“We want this facility, and others that will follow, to be as environmentally friendly as possible and offer attractive opportunities for partnerships with major energy companies. We don’t just want to deal with waste materials and produce cleaner burning fuels – we want the process that produces the clean fuels to be as sustainable as possible as well.

That is why we will be capturing CO2 as a by-product from the gasification process at our Mississippi facility. This will make the facility a net negative emitter of carbon dioxide, which is highly desirable from both an environmental and an investment point of view.

This carbon negative solution could be replicated at other Velocys sites, so we hope our proposed UK facility in Immingham will be able to benefit from this technology, subject to UK Government support for CCUS deployment and the availability of transportation and storage infrastructure in the Humber region.”

Richard Jackson, President, OLCV, said:

“Carbon capture, utilization, and sequestration is essential to reducing the carbon intensity of the transport sector and achieving global climate goals. This project illustrates how CCUS can enable production of zero-carbon and negative-carbon fuels.

Occidental is uniquely positioned to develop and operate CO2 sequestration facilities based on our 40 years of experience injecting CO2 for enhanced oil recovery. We are excited to build on this experience to support Velocys in a strategic partnership to produce negative-carbon intensity fuels.”


Velocys, press release, 2019-10-10.


Government of the United Kingdom
Oxy Low Carbon Ventures
Velocys Inc.