A small New Zealand-based technology company has powered its way into the 2009-10 ‘50 Hottest Companies in Bioenergy’ after opening its pilot project in Auckland, where it turns steel mill emissions into ethanol fuel through the use of bacteria.
Biofuels Digest reports that LanzaTech, a company pursuing the conversion of industrial waste gases into fuels and chemicals using bacteria, has announced a USD 18m capital raising, led by Qiming Ventures, a well known China-focused venture capital firm.
Qiming Ventures was joined by Softbank China Venture Capital and two existing investors from the Series A round, Khosla Ventures in the USA and New Zealand-based K1W1.
The LanzaTech technology
LanzaTech has been developing its proprietary bacteria since 2005, with a goal of utilising the low-hydrogen, carbon monoxide-rich waste gas streams from steel mills. The company conducted its first capital raising in 2007, attracting support from Khosla Ventures, and subsequently proved its ethanol process using unconditioned ‘dirty’ gas streams.
LanzaTech will have its pre-commercial facility open in 2011, and expects thereafter to quickly develop a 200 million-litre capacity ethanol plant. It will then expand from using strictly waste gases from steel to including the use of CO2 as a feedstock gas.
But moving beyond steel to CO2 is more about diversifying the base of potential partners and locations, more than achieving commercial-scale sources of feedstock. Steel mill gases are enough, according to LanzaTech’s internal surveys, to produce as much as 110 billion litres of ethanol per year, or more than is currently produced worldwide from corn and sugarcane put together.
The China connection
New Zealand does not figure amongst the world’s top 40 steel producers, and the few million tons produced domestically were sufficient for pilot scale only. 8 million tonnes were produced in Australia, but the 98 million tonnes produced in the US, or Japan’s 120 million tonnes are even more appealing production bases.
But, overwhelmingly, with 500 million tonnes representing more than 35 per cent of global production, China is the right country for taking LanzaTech’s technology to commercial scale. The huge amounts of waste CO2 produced by China’s coal-fired power plants provide a long-term base for considerable expansion, and finally, there is the fact that China wants to diversify its fuel supply but does not want to utilise food crops.
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