Velocys plc

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00:01 [Starts Abruptly] Presentation, throughout this presentation, investors will be in listen-only mode. Questions are encourage could be submitted at any time by the Q&A tab situate on the right hand corner of your screens.

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00:27 Also, I'd like to remind you this presentation is being recorded. Before begin, I'd like to submit the following call.

Before I hand you over to Henrik Wareborn, CEO and Andrew Morris, CFO, to present the interim results, we'd like to run a short video. [Video Presentation]

09:30 Good morning. And over to Henrik.

Thank you.

09:37 Good morning. Thank you, everybody for joining us for our Interim Results First Half Twenty One.

Thanks for sharing. What is frankly the global premier release of this short video, so, we're very happy that you have a chance to see that and we will welcome feedback, of course, relating the session on that and questions.

09:59 The big picture is indeed very exciting and we, Velocys – we feel quite strongly that we are our moment this is now. So I would like to take opportunity to discuss that bigger picture, but also focus on the near term and the results that we have just announced a couple of weeks ago.

So if you move forward here, let's see page forward that, so I think the video summarized very much who we are and what we do and I don't need to elaborate too much on that, but our clients are committed to net-zero and they need a fuel that has a negative carbon intensity in order ever get to net-zero. We're not talking about just reduction of carbon intensity or current fuels.

We need to get – we need to net to remove carbon from the atmosphere as you aware. So therefore thirty percent, forty percent, fifty percent, sixty percent reduction of the carbon intensity is not good enough.

11:04 And that's one of the reasons why the Velocys Technology Solution is so attractive in the current environment or much stronger urgency where we need to get down to zero and not just reduce. So if we move forward here, who are we, well, Andrew and I have been in charge with the company for almost three years now.

And we are lucky to be supported by a very strong set of our leading expert in their respective fields worldwide in Ohio and in Houston and in Oxford. 11:39 Andrew and I come from a background inside hydrocarbon and renewable fuels.

We've experienced from large corporates as well as business development for commercial -- commercialization on new technologies. So, we – I think, we're well positioned to take the company into this new exciting phase.

12:03 The commercial growth drivers for Velocys right now are the two reference projects that we are doing in close corporate collaboration by with British Airways in the UK and with other partners in the U. S.

This is a way for us to accelerate the technology adoption of the Velocys Technology, we have identified our reactors and catalyst. You need to see production process and we are offering either the central processing unit you want to call it or a full end-to-end solution to our clients depending on who the clients are.

Can we have clients who simply have the resources? They have a large surplus of let's say, forestry residue from there forestry activity and very often triggered by the decline in paper and pulp demand, so the raw material that would otherwise go into paper and pulp.

Can now be redirected into production of sustainable aviation fuel instead so that's a strong need from those resource companies or site owners, people who have access to sites to industrial production facilities where they are keen to integrate decarbonisation technology. So we can either offer the focused FT Island over the full end-to-end solution depending on who our clients are.

Those clients are today typically based in Europe, U. S.

or Asia and we see a strong pipeline building up for clients with various accesses and resources to sites and the feedstocks. We've helped to convert those sites and feedstocks too, a large volume sustainable aviation fuel output.

13:57 The intellectual property protection, we are obsessed about, we spent this a company twenty years almost now. Actually, to the day, Velocys is celebrating twenty-year anniversary from its founding in October this year.

So we are fairly protective of that through patent protection as well as protection our trade secrets and knowhow. Much of that is embedded in our manufacturing, so we are heavily involved in manufacturing, of course, we're using outside parties for the, let's say basic functions, but the sophisticated integration work of the reactor course as well as the catalyst to recipe, something regarding very very carefully ourselves.

14:49 So at this point, I would like to hand over to Andrew Morris, our CFO and to talk through the interim results of twenty twenty one. Please ahead.

15:00 Thank you, Henrik. So in the year of twenty twenty one, we've got some great revenue generation and gross profit.

So an important milestone for Velocys to recognize eight point two million pounds worth of revenue resulting in three point three million pounds of gross profit from the completion of our delivering of our reactors and catalyst to our clients in the U. S.

during twenty twenty. This has led to reduction in operating loss compared to previous years.

And at the end of June, we had eight million pounds and just over eight million pounds in cash in the bank compared to the end of December twenty twenty. 15:41 Another sort of thing to note about our results, I think is, upcoming from those – out of this current period is that we've got an additional grant from the UK Government, and from the department for transport for two point four million pounds going forward for the next six months.

That was secured the work for Altalto project and will cover the one hundred percent of the cost for this ways to jet-fuel project during that time, which is a great benefit to the business, not part of the interim results, but part of the benefits in twenty twenty one from running that project. 16:19 And so, I think that in terms of the results is where we're at that important milestone getting net revenue on the board showing that we're producing and operating as a revenue generating gross profit making business.

Some highlights I think we need to talk a little bit about our project sales so the reference project that Henrik was talking about earlier on the Bayou Fuels project in Mississippi, Natchez in Mississippi, United States. With including the final pre-FEED work streams, one of which we appointed earlier on this year, Koch Project Solutions part of the Koch Industries Group, which is a massive U.

S. Privately adding the organization have now been appointed to provide the full lump sum turn-key EPC contract with a wrap, so, we're going through the contracting process with them and they're doing their due diligence and work with us This is one of a major key in the door moment for any project like this to get an EPC contractor into the project and looking to provide the contract that ensures this project gets built on time to the budget and we'll produce the fuels that it set to produce.

17:41 In addition to that, we're in advance negotiations with multi-year fuel offtake partners for the sustainable aviation fuel and the environmental credits for this project. De-risking the revenues, a message step forward for us talking to large aviation organizations that will provide that offtake, it's multi-year and multi-million turning into of billions over the [indiscernible] contract for those revenues.

So I think this is a pretty unique situation when just selling the fuel to these people, but they're actually underpinning the environmental credits that provide significant amounts of revenue to the project and underpin the ability to get debt into the project, but which still be significant amounts. 18:33 We are also now sitting off to start the initial discussions for financing this advanced final engineering of the – of the project, which include that – those financing discussions during the first half of next year and move into that FEED that we're all talking about in that time, hopefully earlier in the year rather than later.

Some other aspects that relate to the project, the U. S.

Administration, the White House announced policy incentives to accelerate SAF production, which is always very helpful for us in terms of financing the project with one point seven five dollars per gallon of federal producer credit, which is not much shy of the actual dollar per gallon you actually get for the fuel itself, so there is a huge benefit for us in the SAF market and will be a great benefit to the project and to the production of SAF from subsequent projects in the Southeast [indiscernible] United States where we intend to have further projects similar to this and that will be part of the future of the Velocys in the United States. The next slide.

19:55 So let's talk about the UK project of British Airways have continued and extended their options to work with us and demonstrating their commitment to domestic UK SAF production and to the commitment to the Altalto project. We've talked a little bit already about the two point four million pounds of the FT grant to cover one hundred percent of the cost of the project for the next six months, which is a great achievement for the project and for the partnership between British Airways and Velocys with undergoing final [indiscernible] on the site and we've placed engagement with the government on the appropriate policy support for the pricing of the credits to go with this.

20:47 And the net-zero council and the renewable transport fuel association are lobbying on behalf of the industry to get the right appropriate support that matches the similar kind of support that was given to the power industry, particularly the offshore wind industry when we went from rocks to [indiscernible] so that's something that we're key supporting and working through the right channels. 21:16 In terms of what's happening in Japan, you will have seen from some of our announcements that we've got an engineering agreement signed with Tayo to start development their commercial scale project in Japan.

It's a biomass-to-jet fuel project. The picture on the right you can see there, that is the demonstration plant that we finished work with into twenty twenty last year.

We commissioned with them just before the lockdown for COVID in March, April last year. And then we're not able to work with them on the internet to manage to the – the operation, supporting their operational people that's necessary.

22:02 Finished that in November, December last year. And now we're moving on to the commercial scale project that they are doing the NED02 project and that's moving into the FEED engineering the last part of this year and into next year, and then we'll move into final studies that we related to start with construction the following year.

22:27 We also announced Japan Airlines JAL did a flight using three thousand liters of SAF from this project was using in a commercial flight from Tokyo to [indiscernible] some twenty five percent of the fuel that was in the wing was actually SAF, which is an amazing amount of volume and I think it's the first woodchips to jet fuel actually used in the wing of an airplane. So the first there we're using product from our FT process.

23:04 The other aspect of the relationship with Tayo is that they've also got other projects on the goal, and one of them is they've selected us to supply compact FT reactor for demonstration project to convert CO2 and hydrogen into synthetic E-fuels via artificial photosynthesis and electrolysis and this is another pathway to utilizing FT technology, our FT technology for production of fuels from a different feedstocks so we've got waste, which we're doing in the UK, that black waste, municipal solid waste, woodchips from the keeping trimming and thinnings. The forest industry in the Southeast United States, similar product for the Commercial scale biomass-to-jet fuel project with Tayo in the NED01 and NED02 project and then secondly, we've got thirdly rather, the third feedstock will be easy in this power to liquids where we use power to produce hydrogen from electrolysis of water and CO2 to carbonoxide in this artificial photosynthesis.

24:19 To then go produce carbonoxide and hydrogen for the FT process to produce fuels. So those are the three feedstocks that are now being used and developed for utilization of the FT process.

What I'd like to do just talk a little bit about our business model – our capital life business model, just to explain that a little bit more to those that I haven't come across the losses before and those that have it's useful just as revision. 24:52 Our primary business line is the sale of the FT reactors and the catalyst that go in and licensing that technology to third parties.

We provide engineering service related to those FT sales, it is terribly important part of the initial process of getting the inclusion of our FT reactors into other people's processes. So that's the primary business line.

That's what we initially set up to do what we developed since then we talked about earlier on is the development of this integrated technology package which covers the intake of the solid waste biomass either trash or woodchips through the conversion into synthetic fuels. So this is the end-to-end process that customers come to us and say we want one of those the similar to the one you doing either in the Southeast United States, or in the UK and we can provide the ITP Integrated Technology Package to the customer in a much much quicker process than they would take to do it from scratch.

So that's our secondary business line, and then the enabling activity that gets our technology adopted and accelerate the technology adoption is the initiation of the development of these two reference projects in Mississippi and Immingham. 26:16 So what we've done is created the patented standardization of the process of converting solid waste feedstocks through to SAF.

We used the reference projects as references to sell our technology, the FT reactors and catalysts along with the integrated technology design of the end-to-end process. 26:38 A little bit about the numbers, what does this mean to the Velocys?

Well, what you see on the right there is a box of numbers. In the vertical, you've got the years from one to twenty five, which is the – it’s a typical revenue model for the losses from a project.

So in year one, we get into the initial stages of design and then move on to completing the design coming to financial close, building the project will they build a project. It goes live, i.e.

gets to commercial operations and then there's twenty years of operations. In the three boxes, you'll see the engineering is a top box and the middle box is a product sales and reactors and catalyst and in the bottom box is the technology license and royalties from decarbonisation royalties.

27:25 The revenue profile provides about just under sixty million dollars of NPV per client, at the ten percent discount rate for this type of scale of project, which will be about the same scale as the ending project. The Bayou Fuels project is half again bigger, so it's a slightly different numbers from the Bayou Fuels project in bigger numbers.

So we receive engineering design fees for the first two years and the proportion of the technology license fee upfront. We then complete the engineering design in a period of some eighteen months to two years, get to financial close.

28:04 Financial close the final engineering fees are paid and then the deposits are made for the construction of the reactors and the manufacturer of the catalyst, we get those sales complete during another twenty four to twenty eight month construction period, the commissioning period in year five, and the project will let go live, after it goes live, we then get this long term recurring revenue streams over the life of the – remaining life of the plant, which is the catalyst sales, which get replaced every two years and we spread that over the period. So you don't stop the project on the process completely.

28:46 So it's staggered and we get those catalyst sales in each year of four point five million dollars, this is in dollars and then we also get a decarbonisation royalty, we won't take any when we sell these integrated technology packages, we don't take any additional charge on the project other than decarbonisation royalty, which is a small, very small percentage of the topline revenues paid to us for provision of this integrated technology package and solution that allows the customer and the owner fuel producer to get to the starting line of production quicker than they would do otherwise. So our expectation is that over time and for further customers, this timeline from initial feasibility to go in live and can meet commercial operation date will reduce significantly in time and therefore get them to earlier revenues and earlier profitability.

29:53 I think I'm going to hand over to Henrik at this stage.

29:56 Thank you, Andrew. And so the question could be why sustainable aviation fuel.

The Velocys technology could technically be used to produce other grades of fuel relatively easily. For example, diesel fuel, we have chosen to concentrate on sustainable aviation fuel at this point and for the foreseeable future, why well because it's the highest value-add in the whole fuel sector.

It's a part of the fuel demand, which is expected to grow for a long time. While global demand for diesel and petrol and other types of fuels are expected to slowly or quickly decline over time as those sectors get electrified.

30:45 Now, as Andrew already referred to the chart so the opportunity of electrifying international intercontinental air travel is close to zero. So therefore, the solution for aviation is indeed to find a low or negative carbon type of fuel and continue to operate with the excellent and safety and performance track record the global aviation has today with the same infrastructure.

And it’s a huge – huge gain, so therefore, we are highly focused on SAF and as a buying product our technology and the FT liquids coming out to our reactors when it gets upgraded about twenty five percent of it is enough done, which gets blended into petrol. So it supports reduction of carbon intensity of patrol or gasoline as well.

So that's that's important. So we do provide a fuel – low carbon fuel to the road sector as well, but the primary objective is to maximize the amount of sustainable aviation fuel produced which we are able to do.

31:54 So the important thing about this a picture, which was even much more powerful illustrated in the video is of course, not only a reduction of carbon intensity, but also air quality. Unfortunately, our clients do not get those monetary award yet for producing sulphur free particularly – almost particularly free low nitrogen emissions fuels, but I believe soon there will be both in monetary incentives for that and also the requirements, the mandatory requirements on air quality for fuels will move in the direction of supporting synthetic fuels.

Now when the governments can see that this can be done at commercial scale, I think soon enough is going to be required to have ultra-clean fuels as opposed to the [indiscernible] type of fuel that you see on the right and in particular jet fuel globally is way behind in being regulated mandated for clean their specifications. 32:57 We will familiar with CTD specifications of ten PPM sulphur, for example, it's not so well known, but it is globally.

Today, jet fuel is point two sulphur, which is two hundred times higher sulphur rate than density diesel. So that's that's important.

The future proof already competitive advantage that Velocys technology provides. 33:27 So the government's policy board we have alluded to already is strong.

It's getting stronger. Incentives in the U.

S. until recently were highly favoring renewable diesel.

In the U. S.

there's a lot of electrification going on, but they are really stick about that the diesel engine is very efficient it's twenty five percent more efficient on the [indiscernible] gallon basis than the patrol engine. 33:53 So there's been a huge push to stimulate low carbon diesel, which they've have come a long way.

Now the U. S.

have decided to accelerate strengthen incentives for low carbon aviation fuel. And increased incentives for SAF to level where our clients are even more incentivized to maximize SAF out good rather than when you a renewable diesel.

So, with the kind of incentives that are now on the table with an additional one point seventy five gallon, our clients would be incentivize to really produce as much as SAF as possible and then secondarily diesel and other products. In the UK, of course the, in the U.

S. the benchmark, their bar has been set very high.

34:42 So the UK and Europe are now in order to attract in investments in production of low-carbon fuel like this, need to match that simply need to come up with policy incentives, mandates and revenue stabilization and that in the same level. So in the U.

S we can add, here we can sort of summarize the different incentive schedule at stage to about ten dollars per gallon. So that be something we expect the UK and Europe to produce European commission came on to the fourteenth of July was very strong proposed legislation for mandates of replacing fossil.

Jet fuel SAF by two percent from twenty twenty five and by five percent twenty thirteen up to thirty two percent by twenty forty, that translates into very large volumes of SAF production required mandated and very, like immediately. Effectively in the scale of things given that it takes three to five years to construct these plants.

35:44 All right. Just move to the reactor and the technology.

I think you all fairly familiar and will cover some of the competitive advantages of our technology, which we have alluded before. This is ready, commercial is ready now.

It's compatible with the technologies upstream and downstream for the conversion, which is very important huge piece of the work we have done in the last two, three years is to protect the integration, the coupling of the technologies from feeding this lumpy feedstock into gasification, cleaning up the gas and then feeding that into the FT reactors and final upgrading. 36:24 Some investors ask why has this not been done earlier the FT technology the FT reaction was invented very long time ago.

Well, it is the FT reaction is a very sensitive reaction needs to be done at the very particular temperature at a very particular pressure and to do that keep that pressure and temperature and the availability of the catalyst homogeneous way throughout an entire reactor while rushing huge amount of hydrogen and carbon monoxide through it, is very complicated. It's very challenging.

It's something that Velocys is you need to position and over a twenty research development, the commercial testing effort have now achieved. So it is the more, I know, you learn about that the get more surprised that we've done, it in such a relatively short period of time rather than long term because this is very, very difficult.

So that's the answer. 37:24 Good news is that is very difficult to copy, so the barriers of entry together with our strong IP protection make me confident that we can earn excess returns as an investment.

Velocys for a long period before this becomes if ever commercialized. So that's for the presentation.

Lak, do you want to summarize a little bit.

37:48 Fantastic. Thank you so much and thank you indeed Henrik and Andrew for the update in the presentation.

Ladies and gentleman, do please continue to submit your question using the Q&A tab situated on the right hand corner of your screen, but just while the team take a few moments to review those investor questions submitted already. I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q&A and we access via investor dashboard on the investor meet company platform.

I'd also like to remind you that your feedback is important to the company immediately after the presentation is ended and you'll be redirected the opportunity to provide your feedback in order that the company can better understand your views and expectations.

38:24 And Henrik and Andrew perhaps before we go into some of the questions submit during the event. We did have a couple of pre-submitted questions I just want to may, just read the first one, which we just follows any prospect of expanding beyond the airline industry.

38:36 Thank you for the question. And Velocys we could but right now the highest value added opportunity for our clients is in SAF has alluded to in the presentation.

So we will be focused on delivering technologies for SAF producers primarily, our competitive advantage and our clients advantage is significant for SAF production and not the least in order to achieve the very low freeze points required for SAF for minus forty seven and below is something that difficult to achieve for other production to the commercial methods such as vegetable oils being still refined and upgraded into SAF can be done, but it's very challenging to meet that freeze point without losing off the yield. We don't have that program where the FT liquids or the clients are competitively well positioned or advantage position using FT liquids from FT synthesis rather than that refined vegetable we always who use cooking oils.

So we are commercially sort of advantaged in this – for this particular application. Thank you.

39:50 Fantastic. Thank you.

The next question actually sort of touched on some that, it says can you expand your competitive strength and the competitive strength of the Velocys technology?

39:58 Thank you. That's we've touched on some of those already.

It is the suitability of our technology for the deployment of the kind of scale that lends itself for you seeing a solid feedstocks and sustainable feedstocks, if you can also be, [indiscernible] woodchips municipal solid waste are available in one any particular location at the scale equivalent to zero point half million ton per year which translates into about one hundred million liters of fuel. That is very small for the petrochemical and refining sector.

40:40 It becomes small petrochemical projects, but a large solid piece of sounding project. And in between that sort of struggling that sort of scale, the gap is the Velocys reactors are suitable for this particular scale.

The better chemical sector are not suitable for the scale, the term and buy the bulk key feedstock. Now and then another advantage this is of course, it becomes distributed a fuel production it bit like this due the power production.

So we instead of the old technology revolving crude oil, incentivize is massive refining centers in a very small places of the world, which then causes huge transportation businesses on the crude oil and the resulting products on both ends and also a massive vulnerability as you saw and this [indiscernible] the U.S., Gulf Coast a number of times, and closes down a quarter of the entire refining capacity over the country, which is located in very – one small concentrated area. Same thing with Europe, we have a vast proportion of total refining capacity simply in Rotterdam and very few other places and that is increasing instead, distributed fuel production is enabled by sustainable – using sustainable feedstocks and the Velocys technology instead.

So that strengthens the resilience of the whole system and the improves distribution capability and shorten those distances, which I think has been highlighted in the UK recently, how important about this.

42:22 Thank you very much indeed. Henrik and Andrew, I have had a number of questions submitted during the live presentation if I may just hand back just to click on that Q&A tab and just start another top and work your way down and just read out the questions where appropriate to do so, please.

42:36 Andrew, do you want to go ahead with the.

42:40 Yeah. I think we had one or two interesting questions.

Thank you very much. One is on Japanese Airlines going to use your product in further flights.

Once the project in the Needham two projects in Japan, takes off. We expect that the Japanese Airlines will be using the product coming out of that project.

So that will be a number of years away before we do that, but for Velocys, it's the engineering fees that we get from the initial stages that we now with them and then the sales of reactors and catalysts that we do the year after next, a little be good for Velocys and get the project going for us. But yes, so the Japanese will be using product in further flights, but there isn't a lot of project product at the moment coming from the demonstration project was done last year was a very small project, we use most of the SAF for that?

43:41 I have a question I can see that which is interesting. Yeah, base of Dominic or are you asking why relatively classic, let's say, at least so far fossil investors and companies are now certainly interested in this sustainable energy and energy transition.

But it's stunning; it’s overwhelming how large engineering companies – large resource companies are now competing at falling over themselves to move away from their fossil history and into the new energy transition. It's very simple it's follow of the money.

The pension funds, the large investors CalPERS and Ontario teachers, all those may the Norwegian oil fund, everybody you get this invested, you get dumped if you don't a transition and jump onto to the transition brand value quickly enough. That all the new money, the investment that government support comes into energy transition.

To look at how quickly, the coal industry just disappeared. I mean, look at the market cap of coal industry ten years ago versus the avail is today.

44:51 Simply could happen for full fossil oil relatively quickly. So we are absolutely delighted the company like coke industries are embracing new technology which they have a long history of doing actually.

So I give large competent players who are able and proven track record of executing safely, large infrastructure projects in this sector to come to us and accelerate the energy transition into advanced synthetic sustainable fuels. So it is very positive, I think there is zero chance of them trying to do this as a way to obstruct development and protect therefore [indiscernible] chance on the contrary, everybody with a little bit of insights, see, so this is – this is the future.

This is growth. This is where the money goes and this is where customer demand is.

45:48 The another question here. Our potential future clients also looking at [indiscernible] similar feedstocks as we're doing, yes, definitely, that's what new business that we're talking about, we will have either woody biomass or MSW projects.

We are talking to customers on exactly that and hence why we're producing our integrated technology package for that purpose so that we can sell it into them, reduce their early stage assessment of technologies as including ourselves and so absolutely yeah, potential future clients are looking at exactly this.

46:27 There's a question from [Aaron] (ph) about the incentives for sustainable fuels in the U. S.

It is complicated, there is a federal scheme under the renewable fuel standard and awarding RIN credits, circled these, 3D7 RIN credits to fuel producers who are using advanced cellulosic feedstocks then the states incentive systems in California and a few other states, further award low-carbon fuels, including negative carbon negative carbon intensity fuels with significant credits as well as CCS credits for sequestering the byproduct of CO2 that is associated with the process on the simple federal scheme of 45Q. 47:18 And then in addition to that, we have recently announced SAF of dollar seventy five, all that adds up to depending a little on configuration and carbon intensity to at least ten dollars per gallon of incentives available in the U.

S. and that can be compared with the fossil price of jet fuel [indiscernible] which is pretty similar around two dollars a gallon.

47:43 So the value of the avoided carbon credit is grow about eight dollars to ten dollars and then the value to our clients were selling the SAF fuel [indiscernible] indexed to the fossil fuel, which could be, but most likely resulted a very high premium in addition. You end up with twelve dollars a gallon or higher revenue.

So it is highly advantage and therefore the playing field is quite level because if you distribute fossil fuels today in the U. S.

You obligated the part you must by a certain amount of these credits in order to redeem yourself from having distributed producing toxic fuels. So we are – we get that we are there in the U.

S. and I'm sure we will get there in the UK and across Europe in terms of incentives, which levels the playing field and allows sustainable fuels to compete with fossil fuels on at least equal basis if not advantaged.

48:53 I've got a question from Adam. Thank you for your question.

And also, I think there's another one from James said about the sort of wider clean energy solutions away from the current project yet. I think one of the things I was talking about earlier was the power to liquids project that the Japanese are taking up.

That is where the third feedstock stream to Velocys that I was talking about very briefly comes in. So it's not just what you biomass and useful solid waste.

It is, this power to liquids where we get involved in electrolyzing water and otherwise means of picking carbon dioxide out of the air and using various technologies, one can be reverse water gas shift, amongst other things to produce carbon monoxide combine that with the hydrogen through the FT process to produce long chain hydrocarbons again that get upgraded to fuels. It’s a good question.

So we've now got that third string to our above in terms of the type of feedstocks that can be used with our technology in this sustainable fuels space. Henrik, do you want to some…

50:03 I have a good question from David M. in terms of our project development.So as Andrew emphasized and in the video also.

The reference project is something we are accelerating as the way to acquire -- adoption of our technology and also standardization of the process. We -- I would describe out about this as a product development we do on behalf of British Airways.

British Airways is founded and the inception of that project was done by British Airways almost years ago. And they've had a couple of force stars, but they asked us about five years ago to help them make this happen.

50:45 So we have a sort of fifty-fifty stake in the development project to work, but – and we have got funding from other parties as well as you might be aware, and now it’s largely so by the UK government. So in a way – I think we describe the Velocys during this development service on behalf of other investors.

On Bayou, we are in the middle of engaging as Andrew alluded to, larger investors to buy into that project and take it off – forward into the capital intensive stage of the projects. Early stage for these kind of projects are very capital light, because it's early stage engineering and probably development securing, sites, etcetera, and then it becomes capital intensive – the minute it becomes capital intensive, we hand over the project to large balance sheet, large investors, strategic or financial, and we provide the services or some further quality development and engineering.

51:50 So the development capital of Bayou Velocys today owns one hundred percent. And out of that, we own fifty percent with BA.

So just describing that the -- beyond these two reference projects, Velocys will be focusing on servicing other project developers and asset owners who will be using our technology to accelerate their conversion of these resources into sustainable fuels. 52:22 Okay.

Any other question Andrew that we want –

52:25 Yes. Can you bring investment bank of the UK IB – UK investment bank base up in leads.

Can it help us and local authorities working synergy to use household waste? Absolutely.

I think the need to bring in the local authorities, we just need the UK IB to help us in providing loans to the projects and make sure the projects get the debt into them that allows the equity then to come with it, and the projects then get through financial closing into construction. The UK IB is in the sort of early stages of it's processing.

We've been working with the treasury and the infrastructure projects authority, the predecessor to the UK IB. And we'll be working for that and with them as soon they're in a position to do so to get the project further along with its discussions with the debt provision.

So absolutely, UK IB, I think is a very key part of providing support for new infrastructure, particularly in sustainable fuel sector from waste in the UK and will continue to be very important.

53:44 Okay. David D, put in a question of who are typical clients are.

Well, I alluded to that in the video. It is -- all the produces of fuels today who -- there are independent oil refineries, for example, who would like to refine less crude oil and more and process other type of feedstocks to clean sustainable fuels.

So they are across Europe, independent refineries even in the UK who have no upstream activity for example, so no vested interest in stream and crude, so a number of those in the U.S., across Europe, as well as, but you don't have to be a refiner today to see the advantages of this technology. If you are a resource owner, such as large waste management company or if you are large forestry company with surplus woodchips, which most of them have, then you are minded to invest in this technology to increase your value added of the waste products instead of burning them and turning them into to heat and power, -- very low value.

So there is a road range of clients that we are targeting and who are already engaged with us. So of which the traditional oil refiner sector is only one.

So that makes us very excited because the scope and the scale of the kind of clients we are facing is very, very big.

55:09 So the a question hear about the adoption of sulphur and what will happen in first, -- reduction or enforced. Well, most of the adoption so far has been mandated and some of the things Andrew was talking earlier on about.

The mandate of fuels, both in the United States with the mandate for the fuel producers, and the discussion about mandates, we just had the SAF mandate consultation with the department of transport completing during September. 55:42 The European Union put out a – mandating, as Andrew suggested earlier on of some two percent starting on the first of January twenty twenty five, which is only three years away, moving up to five percent and forty percent by twenty thirty – twenty forty.

So there is some very big mandates coming that will enforce the adoption of SAF, high volumes, very significant volumes, so the two percent for mandate for twenty twenty five in the EU would require sixteen of our plants minimum to produce that volume of feedstock, so it's coming and the mandates will definitely push airlines to use it, fuel producers to produce it and Velocys to supply technology.

56:37 That's a good question. And I would even strengthen that further to say, there is also very strong corporate demand for fossil free aviation travel.

Large corporates in the U.S. including Amazon and others – British Airways recently publicly announced large client in Germany demanded fossil free air rates from Frankfurt to Atlanta of car components.

So the airline had to buy SAF in order to transport those – services those corporate clients. That happens every day, there is a massive pressure on the aviation – the airlines to provide decarbonisation over their freight services of goods and people.

57:25 So I think there is a -- almost as much pull as push for SAF and including willingness for passengers to pay ten-twenty euros per ton per – extra for domestic, let's say, European flight. And which covers the extra cost of SAF, with some of the airlines offering already now -- the small volumes that are available already now as a test and it seems to be a strong uptake on that events.

So it's there, and there's a willingness to pay and that I think is the big difference from two years ago, when nobody could imagine that anybody would pay a penny above the, let’s say, fossil price to travel or move goods fossil free. Today, we see a massive willingness to do that both voluntarily and mandated.

So that's why I think Velocys is well positioned for this acceleration right now.

58:27 Andrew, we’ve obviously had a number of questions come through, we're just coming to the hour. And of course, you can review all these questions that attendees have posted and thank you very much for those and thank you for answering so many that you have done.

Henrik perhaps before I – redirect the attendees to give you some feedback, perhaps you could just give us a closing snapshot and then – do so.

58:49 Well thank you, Lak, and thank you everybody for joining us today. At Velocys we very are very fortunate, we have a technology that our colleagues and predecessors have worked on for twenty years, we have benefited from support from the UK and the U.S.

governments. And we have a technology that is commercially scalable and deployable to produce fossil free sustainable fuel, allowing guilt free safe travel between the continents and countries, four millions of people.

It is huge, it could not be achieved in any other way frankly, and we need it to happen now. So Velocys is in a very fortunate position, I'm humble and indebted to our predecessor and investors for their faith in the company for all these years during the development, the research stage, and we are therefore in a very good position now to reward and pay back our investors from the cash flows generated by deploying our technology into commercial use going forward so very excited about that future.

59:56 That's fantastic. Henrik, Andrew.

Thank you again for updating investors today. Can I please ask investors not to close the session, you’ll be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations.

It will only take a few moments to complete and it’s greatly valued by the company. 60:13 On behalf of the management team of Velocys plc I would like to thank you for attending today's presentation.

That concludes today's session. Thank you and good morning.