Carbon Recycling Hits the Mainstream

Technologies that convert greenhouse gases (GHGs) into usable products have hit the mainstream. Last week, Illinois-based “carbon capture and transformation” firm LanzaTech began publicly trading on the Nasdaq exchange, making it the first such company to go public in the US — a milestone for the so-called circular economy for waste gases.

LanzaTech is the most high-profile player in a growing industry that is seeking out ways to displace virgin fossil fuels in the production of certain chemicals and products, using emissions of CO2 and other GHGs as feedstock. It is one of several companies around the world finding strategic partners and customers to help drive carbon-recycling technology forward.

The market is still tiny, with commercial-scale production facilities only starting to come on line. But the potential is massive and offers a legitimate path toward monetizing and utilizing waste gases like CO2 and methane — without the help of government incentives and for purposes beyond just producing more fossil fuels through enhanced recovery. LanzaTech sees an addressable market worth $1 trillion, and potential for more than 1 billion tons per year of product generated from waste feedstock.

Converting CO2

LanzaTech uses a gas-fermentation process that turns captured gas into a variety of “building block” molecules like ethanol, isopropanol and acetone. These chemicals can then be utilized further downstream to make fabrics, fuels, detergents and other consumer goods. It pumps emissions from smokestacks, municipal waste or even CO2 pulled directly from the air through a bioreactor filled with bacteria that consumes the gas and converts it. The process uses relatively low heat and pressure, which reduces operating costs.

“It’s like making beer, except that instead of using sugar and yeast, we use gases — hydrogen, carbon monoxide, carbon dioxide — and a bacteria,” CEO Jennifer Holmgren explained during a recent investor call. A key difference between a LanzaTech plant and a brewery, however, is that the company's facilities can produce continuously rather than in batches, so the fermentation process “looks much more like a refinery unit,” Holmgren said.

LanzaTech has three commercial plants operating today in China, with another six globally due to complete construction or commissioning this year and eight more in the engineering phase. The plants span across Europe, Asia, North America and Oceania, offtaking gases from different emissions sources, including steelworks and refineries. It has a wide range of corporate investors and partners — Occidental Petroleum, Woodside Energy, BASF, Brookfield, Suncor Energy and Sinopec, to name a few. It also owns a stake in sustainable aviation fuel producer LanzaJet, which itself is backed by companies like Shell and British Airways.

Competitive Costs

Driving down production costs so these products can compete with those made from cheap fossil-fuel feedstocks has been critical to carbon-recycling technologies. Ezhil Subbian, CEO of India-based protein producer String Bio, says “a big portion” of her company’s development work to date has been on “making the price point work” to stay competitive. “That has been the bulk of our innovation,” she tells Energy Intelligence.

String is currently focused on biogas or methane gas that would have otherwise been vented or flared and converting it into proteins for animal feed — for fish, poultry and pork — or for crop stimulants. String also uses a proprietary gas-fermentation process that can yield different molecules, with applications for agriculture, cosmetics and other industries. “Based on the gas source we have, we have products that allow us to play in multiple end-use markets,” Subbian says.

Targeting Methane

String is focusing on methane and biogas first because of the outsized impact those types of gases have on the climate. But Subbian says CO2 is a “natural transition” and String is working to apply its technology to the ubiquitous GHG in order to offer a “more comprehensive” solution. “In the short term, given the high global-warming potential of methane, if we can work on methane-emissions reduction, it actually buys us time to get to net-zero targets,” she says.

Another advantage of targeting methane, Subbian says, is that it helps "enable" localized manufacturing. "We can build our plants anywhere there is a gas source — you don’t just need a very large-scale centralized plant in China that then caters to the rest of the world.” String has a demonstration plant operating in India and is building a much larger “first of its kind” commercial plant outside Bangalore.

Unlike LanzaTech, which primarily makes money by licensing its technology, String is a non-market-facing “business to business” play that produces feedstock for other products, generally at facilities it owns and operates, Subbian says. It relies on partners to supply gas streams and, in turn, “help[s] them enhance the value of what gas they have on hand.” Those partners include Woodside, which invested $9.9 million in a Series B round last year and has joined String as a strategic partner. Woodside CEO Meg O’Neill said String’s technology could eventually be used to recycle methane at Woodside facilities, as well as third-party sites.

Subbian says these types of “circular economy” technologies can help lower global emissions while allowing many of the same activities humans will continue to demand. “We want to eat similar protein, we want to live with similar kinds of consumer goods,” she says. “We make those goods with a significantly lower carbon footprint and I think that’s precisely where the circular economy solution comes in, because now we can have my same salmon or trout but the environmental footprint of that is significantly smaller.”