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  • Writer's pictureRon Kotrba

Velocys signs SAF offtake with Southwest, MOU with British Airways parent co.

Velocys Renewables LLC, a subsidiary of Velocys plc, has entered into an offtake agreement with Southwest Airlines for sustainable aviation fuel (SAF) made from woody biomass at its planned 22-million-gallon-per-year Bayou Fuels project in Mississippi. The company has also signed a memorandum of understanding (MOU) with International Consolidated Airlines Group (IAG), which Velocys intends to convert to a binding offtake in the next six months. If realized, the two contracts would represent 100 percent of the SAF output at the planned facility, which is expected to begin production in 2026.

The deal with Southwest represents 219 million gallons over a 15-year term and is contingent on certain terms, including “completion of satisfactory financing for the final engineering phase and certain construction milestones, eligibility for greenhouse gas credits, as well as the enactment of the proposed SAF tax credit legislation,” Velocys stated.

The MOU with IAG is expected to translate into 73 million gallons of SAF purchased over a 10-year period beginning in 2026.

“Velocys’ focus is now on accelerating technology delivery with our partners to allow client facilities, including Bayou Fuels, to reach a final investment decision and then go into construction,” said Henrik Wareborn, Velocys CEO. “Our capital-light, technology-licensing model will enable many more aviation clients to transition to sustainable aviation fuel as required by the race to net zero.”

According to Velocys, its carbon-mitigation technology will enable production of a carbon-negative SAF at the Bayou Fuels plant through a combination of renewable feedstock (wood), renewable power, and carbon capture and storage.


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