Auckland-based LanzaTech says a Silicon Valley investor has given it money to make ethanol from an untapped source: carbon monoxide gas.
In a statement from New York the company said it had developed a fermentation process in which bacteria consume carbon monoxide and produce ethanol.
Ethanol can beused as an alternative fuel or an octane-enhancing, pollution-reducing additive to petrol.
Sean Simpson, LanzaTech's co-founder and chief scientific officer, said the company would use the US$3.5 million ($4.7 million) investment from the venture firm, Khosla Ventures, to establish a pilot plant and do the engineering work to prepare for commercial-scale ethanol production.
Vinod Khosla, a co-founder of Sun Microsystems who formed Khosla Ventures in 2004, has invested in more than a dozen start-ups involved in "clean fuel" technologies.
He told the International Herald Tribune that LanzaTech stood out from the scores of proposals he sees each day for its ability to scale up to industrial proportions and the credibility of its founding scientists.
He said: "When I passed it on to my partners for due diligence, the technology stood up to every test, and the intellectual property protection was awesome."
Referring to the bacteria that are key to the process, he said, "the performance of the bugs was frankly mind-boggling to me, not something I would have expected from a tiny research effort in New Zealand."
His firm "sent the best process engineers we know to evaluate the technology and could it be industrialised, and the answer was yes".
Yeast has been used for thousands of years to turn sugar into alcohol. LanzaTech uses a bacterium to produce ethanol from carbon monoxide, a waste product of many industrial processes, including steel production.
However, ethanol may raise levels of nitrogen oxides. It also contains less energy than an equivalent amount of gasoline.
