(Alliance News) - Velocys PLC on Monday said it has launched its new technology facility in the US state of Ohio that will house its reactor core assembly and catalysis operations.

Shares in the Oxford, England-based sustainable fuels technology company were down 15% to 1.01 pence each in London on Monday morning.

Velocys said these operations form a "critical part" of the production process for sustainable aviation fuel.

As part of a 15-year lease deal, Velocys contributed USD2 million towards its construction, with the remaining USD8 million coming from its developer Warner Industrial Corporate Centers 2 LLC, a subsidiary of Ohio-based developer Pagura Co.

The new 52,500 square feet site enables the consolidation of Velocys' catalysis services, microchannel reactor core assembly and technology licensing under one roof, the company said.

Velocys said the building's construction began in mid-2022 and was finished by the end of the year, with fit-out completed over the winter.

The new site has the capacity to produce around 48 cores per year, Velocys said. This is enough to support 12 reactors, as is typically required for the operation of a single commercial scale sustainable aviation fuels biorefinery, with a capacity to convert approximately one terawatt-hour per year of energy.

Velocys expects the facility will have sufficient production capacity to meet projected orders until 2028, including from its two biorefinery reference projects in Bayou Fuels, Mississippi in the US and Altalto Immingham in England respectively.

"The completion of this state of the art facility is a real milestone both for Velocys and for the move to decarbonise the aviation industry. It is another critical piece in the jigsaw to go alongside the support we are receiving from regulatory and policy initiatives in all of our core markets," said Velocys Chief Executive Officer Henrik Wareborn.

"I would like to offer my thanks to the State of Ohio along with the many contractors who have completed this project in such a short time frame. To move from planning permission to completion in two years is a testament to all those involved and takes us a big step closer to enable our clients to produce [sustainable aviation fuels] with ultra-low carbon intensity at commercial scale."

By Greg Rosenvinge, Alliance News reporter

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