VLS.L Regulatory News (VLS)

News release

Velocys plc

("Velocys" or "the Company")

24th February 2016

Study commences on UK-based waste-to-liquids plant

Velocys plc (VLS.L), the company at the forefront of smaller scale gas-to-liquids (GTL), is pleased to announce the commencement of an initial engineering study on the development of a new waste-to-liquids (WTL) project in the United Kingdom.

The proposed project would take hundreds of thousands of tonnes per year of post-recycled waste, destined for landfill or incineration, and convert it into clean-burning, sustainable jet fuel and diesel. Velocys is partnering on this project with a company affiliated to its largest shareholder, Ervington Investments. The partners have commissioned an engineering study that is being carried out by Amec Foster Wheeler, the international engineering, procurement and construction company.

Neville Hargreaves, Velocys' Business Development Director, is today presenting a talk entitled "Waste to liquid fuels: a route to project viability" at the Energy from Waste conference in London.

David Pummell, CEO of Velocys, said:

"We continue to see economic opportunities around the world with both natural gas and other feedstocks. We are excited by the prospect of being involved in finding a successful route to a waste-to-liquids plant incorporating our technology in the UK, where a combination of gate fees and fuel credits aid plant economics. We have strong customer interest, because this would be one of the few commercial options for making sustainable jet fuel. Velocys and Ervington have a mutual strategic interest in delivering a commercial scale WTL solution and see this UK opportunity as meeting our joint criteria for success."

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Notes to editors

About Velocys

Velocys is the company at the forefront of smaller scale gas-to-liquids (GTL) that turns natural gas or biomass into premium products such as diesel, jet fuel, waxes and base oils. Smaller scale GTL adds value to shale gas and bio-waste, and makes stranded or flared gas economic - an untapped market of up to 25 million barrels per day.

Velocys technology, protected by several hundred patents in over 30 countries, is specifically designed for smaller scales, combining super-active catalysts with intensified reactor systems. The Company's standardised modular plants are easier to ship and faster to install, at lower risk, even in the most remote or challenging locations. Together with world-class partners, Velocys works flexibly to unlock gas resources of 15,000 to 150,000 mmbtu per day, allowing more companies to take advantage of more opportunities.

Velocys plc is listed on the AIM market of the London Stock Exchange (LSE: VLS). The Company is well capitalised and has a multi-disciplinary staff of around 100 operating from its commercial centre in Houston, Texas, USA and technical facilities near Oxford, UK and Columbus, Ohio, USA. Its commercial reference plant, which will be located adjacent to Waste Management's East Oak landfill site, is expected to reach mechanical completion in mid-year 2016.

www.velocys.com

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