Velocys: ENVIA biorefinery – RINs verified

HOUSTON–(BUSINESS WIRE)–Velocys, the renewable fuels company, is pleased to announce that the
RINs (Renewable Identification Numbers) produced at ENVIA Energy’s
Oklahoma City plant have been verified by Weaver, an independent third
party auditor, under the Quality Assurance Program (QAP) approved by the
US Environmental Protection Agency. Subject to the plant running within
the required efficiency range it is expected to continue to produce
verified RINs (Q-RINs).

Highlights:

• RINs produced at ENVIA to date now have Q-RIN status.
• Six month RIN purchase and sale agreement signed covering all
  available Q-RINs produced.
• ENVIA expected to generate around 100,000 D7 RINs per month under the
  approved pathway.
• This represents a commercial validation of Velocys’ technology and
  supports the Company’s strategy to build a biorefinery in Natchez,
  Mississippi.

ENVIA Energy has signed a RIN purchase and sale agreement with
TransMontaigne Product Services, LLC (a wholly-owned subsidiary of NGL
Energy Partners), which will purchase, at a fixed price, all of the
available RINs generated at the plant for a six-month term beginning in
April. The agreement has industry standard payment terms. A significant
contribution of the revenues of the plant could be derived from the
ongoing sale of RINs.

Based on 2017 D7 RIN values, the possible revenue from RINs attributable
to ENVIA’s mixed feedstock fuel was equivalent to $2.4/gallon or above
throughout 2017.

Under the Renewable Fuel Standard (RFS), the Renewable Volume Obligation
for Cellulosic Biofuels is 288 million gallons, yet the supply of D7
RINs is limited. Only 400,000 D7 RINs have ever been generated within
the US. ENVIA is expected to generate around 100,000 D7 RINs per month
under the approved pathway.

In contrast, Velocys’ future Mississippi biorefinery is being designed
to generate over 20 million gallons of fuel and is expected to generate
over 30 million D3/D7 RINs per year. For diesel produced exclusively
from renewable feedstock, such as planned at the Mississippi
biorefinery, D7 RINs traded above $4/gallon throughout 2017.

David Pummell, CEO of Velocys, said:

“This is a significant landmark for ENVIA and represents a further
validation step for Velocys’ strategy to build biorefineries that
convert woody biomass to renewable fuels. ENVIA demonstrates that we
have the capability to produce verified RINs that will enable Velocys to
unlock the attractive US renewable fuels market and, in time, grow a
material supply position.

“This milestone is also important to our ongoing Mississippi biorefinery
project, being one of the key requirements that will support building a
consortium of strategic investment partners into the project.”

– Ends –

www.velocys.com

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Contacts

Velocys
David Pummell, CEO
+44 1235 838 621
or
Camarco
(Financial communications & PR)
Billy Clegg
Georgia
Edmonds
Tom Huddart
+44 20 3757 4983