John Weekes

John Weekes is a reporter for the Herald on Sunday.

LanzaTech quits NZ

LanzaTech chief executive Jennifer Holmgren.
LanzaTech chief executive Jennifer Holmgren.

A New Zealand-based biotech firm with links to Barack Obama's re-election campaign manager is moving to North America.

LanzaTech has received $14,185,972.89 in taxpayer funding including GST, since September 2005 but announced this morning it was shifting 30 employees from New Zealand. A new Illinois hub will serve as the firm's research and development (R&D) centre with a new investment there of more than $19.9 million.

LanzaTech captured carbon-rich waste gases from large industrial operations such as steel plants and used microbes to recycle the waste gas. The company grew steadily since its establishment nine years ago and last week raised $69m in private sector funding.

Lanzatech is the low carbon fuel partner for Sir Richard Branson's airline Virgin Atlantic. In November, the firm became the world's first company to have its jet fuel certified by the Roundtable on Sustainable Biomass.

The World Economic Forum included LanzaTech in an elite group of firms "set to have a significant impact on business and society" in its 2012 Technology Pioneers awards.

The company received multiple grants from U.S. taxpayers before announcing its move today. Last year, the US Department of Energy provided $4.9m in research funding. The Illinois Department of Commerce and Economic Opportunity approved tax credits for LanzaTech worth an estimated $1.28m over the next decade.

In New Zealand, LanzaTech's move seemed a surprise to the ministry which championed and helped bankroll it here. The Ministry of Business, Innovation, and Employment knew nothing about the move when the firm was holding internal discussions about shifting a week ago.

A spokeswoman for Science and Innovation Minister Steven Joyce said LanzaTech had received no significant grants since 2012 and the only active grant was for $88,000. "In order to receive Government R&D grants in the future, Lanzatech would have to continue to undertake significant R&D in New Zealand," she added.

Labour's Energy and Resources spokesman David Shearer said LanzaTech was probably the most innovative Kiwi company of the last decade and its shift to Illinois was disappointing.

"The fact the ideas came out of New Zealand and the weight of the company is now moving offshore is a blow to us, and it will certainly limit the ecosystem we hoped would be developed in New Zealand around clean energy," he said. "It's not the end of Lazantech here but on a personal note, I'm disappointed because I've watched this company develop over a number of years and been hugely excited about it."

Shearer said the US was aggressively enticing companies to base themselves there. "We've got to wake up and realise if we want our best companies to create value here, we're going to have to be able to match that."

But he also said it was also time for New Zealand to consider more low-interest loans for start-up companies, in addition to public grants.

Barack Obama's 2012 re-election campaign manager, Jim Messina, joined LanzaTech's board of directors in September last year. Politico magazine said Messina was "building a political fiefdom through his deep ties to rich Democrats and a nexus of big-money operations" in an article comparing him to George W. Bush's former top political operative, Karl Rove.

Illinois also had robust clean-energy policies. "Clean energy plays a significant role in Illinois' economy in large part because of smart policies that spur growth in renewable energy, energy efficiency and alternative transit sectors," American clean energy advocate Nick Magrisso wrote last week.

LanzaTech insisted it was building on an existing US presence, and the move was unrelated to politics.

"So far we have only announced this internally so as to give our team as much notice as possible for the changes ahead," a LanzaTech spokeswoman said this morning. "We are still a privately held company and this decision has been taken for business and strategic reasons and has not been influenced by policies of the current or past governments or political parties within New Zealand," she added.

The firm said it remained committed to New Zealand with some key facilities remaining here and it would continue to seek opportunities for R&D and commercial projects locally.

- Herald on Sunday

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