Biotech innovator LanzaTech is focused on turning the global carbon crisis into a feedstock opportunity.
The Intergovernmental Panel on Climate Change (IPCC), made up of thousands of scientists from around the world, reported last year that the best path to limiting the worst predictions of climate change is to reduce human carbon emissions by 45 per cent by 2030.
"If we reduce emissions sharply, consequences for people and their livelihoods will still be challenging, but potentially more manageable for those who are most vulnerable," said Hoesung Lee, chair of the IPCC.
The co-founder and chief scientific officer of LanzaTech, Dr Sean Simpson, is focused on turning the global carbon crisis into a feedstock opportunity.
Speaking at the recent Infinz conference, Simpon said we have to effectively halve our emission rate if we are to avoid extremely high food prices, unpredictable farming, sea level rise and massive global population displacement.
"And it doesn't actually really matter whether you believe in global warming or not, because the science is so clear that it is going to happen — the question is what are we going to do about it?," he says.
He said if food shortages, population displacement, and entering the sixth mass extinction doesn't scare you, then an article in journal Nature Plants that predicts beer prices will go up as a result of global warming should. "We'll be paying more for worse beer," he jokes.
While renewable energy — such as wind, hydro and solar — are helping to reduce emissions, we still require high-density transport fuels, which require carbon.
There is already a mature industry producing sustainable fuels from plants such as sugarcane or corn. But the amount of fuel that can be produced from plants is only a small fraction of the over 90 million barrels of oil we consume each day. Production is also not easily expandable due to the geographic limitations on crop production and the fact that the price of sugar is highly volatile. It also consumes significant water resources and requires carbon-intensive industrial farming.
Simpson says by using waste gases instead of food, LanzaTech's fermentation technology is providing a sustainable, low-cost, low-carbon fuel production process with no impact on the availability of food or land.
LanzaTech, which began in New Zealand in 2005, is using microbial technology that converts industrial pollution into fuel. This can be from gases produced as an inevitable consequence of certain industrial processes like steel making, or generated by processing municipal solid waste or agricultural resources.
Simpson likens the carbon recycling technology to retrofitting a brewery on to an emission source like a steel mill or landfill site, but instead of using sugars and yeast to make beer, pollution is converted by bacteria to fuels and chemicals.
"We see ourselves in an ideal position. We enable a circular economy and we enable the recycling of carbon," he says.
"We want to be a company that allows steel industries to exist and to perpetuate and to be part of a circular carbon solution.
"At LanzaTech we can recycle carbon from agriculture, from industry and from society to make the fuels and chemicals that we need that today are only produced from oil."
Following a successful trial creating ethanol at New Zealand's Glenbrook steel mill in 2008, LanzaTech demonstrated the technology using live emissions from a steel mill in China in 2008.
It shifted its head office to Chicago in 2014, and now has its first commercial plant operating in Jingtang Steel Mill in northeastern China. It has announced new projects including at a steel mill in Belgium, an oil refinery in India, and using municipal waste in Japan.
"The fuel that we produce achieves between a 75 and 90 per cent greenhouse gas reduction when compared to gasoline," says Simpson.
"The steel industry alone, has enough emissions from which we could produce ethanol at a level of around 50 billion gallons a year.
"So today, globally, from agricultural resources, the world produces 25 billion gallons a year from corn and sugarcane. From the steel industry, you could produce twice that."
The company is now also converting its ethanol into sustainable aviation fuel.
It partnered with Virgin Atlantic and Boeing to complete the first commercial flight powered in part by LanzaTech jet fuel.
LanzaTech attracted high-profile early-stage investors that included Sir Stephen Tindall's K1W1 fund and prominent Silicon Valley venture capitalist Vinod Kosla.
It recently received series E financing of US$72m (NZ$113m) from Novo Holdings to grow LanzaTech's sustainable fuels and chemicals platform.
LanzaTech operates using a licensing business model, which co-founder and chief scientific officer of LanzaTech Dr Sean Simpson says is the quickest path to disseminate the technology globally in various industry sectors.
He told the Infinz conference that he has no idea when LanzaTech might list on the stock market.
He thinks the greatest mistake a startup technology company can make is listing at a time when there are still technical risks associated with the process.
"I think it's an opportunity we will have when we've constructed plants in each of the major feedstock areas we have identified and have those plants operating consistently."
Simpson says innovations like LanzaTech that will have a truly global impact and help tackle climate change do not happen easily and they do not happen cheaply. He says funding groups are going to have to think more long-term.
"Investors are going to have to look at how they structure their funds in order to facilitate the growth of these new industries.
"People look at us and say we're an overnight success. But we are an overnight success that took 13 years. And I still wouldn't describe us as successful."
"We are very fortunate — very fortunate — to have very patient investors. Not everybody is so fortunate and I think the investor community has to understand the nature of deep technology development in the context of the crisis that we face."
Read the Sustainable Finance Report here.