Velocys PLC on Monday welcomed the passing of climate legislation by US Congress, which it says will underpin the financing of its sustainable aviation fuel reference project.

The fuel technology company welcomed the passing of the Inflation Reduction Act of 2022, which includes legislation to allocate around $369 billion to reducing green house gas emissions and incentives to expand production and use of domestic clean energy.

Velocys explained that sustainable aviation fuel tax credits were also a part of the act. These, and associated incentives, are expected to help underpin the financing of Bayou fuels and the company’s sustainable aviation fuel reference project in Mississippi, US.

The legislation is also expected to allow the finalisation of a memorandum of understandings signed with Southwest Airlines and International Consolidated Airlines Group SA in November to a full offtake agreements.

The agreements relate to offtake arrangements for 100% of the sustainable aviation fuel out from its Bayou Fuels facility.

Shares in Velocys were up 12% at 5.80 pence on Monday morning in London.

Copyright 2022 Alliance News Limited. All Rights Reserved.