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).
- 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.”
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