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Head and shoulders photo of Jennifer Holmgreen FEI, CEO of LanzaTech Photo: J Holmgren
Jennifer Holmgreen HonFEI, CEO of LanzaTech

Photo: J Holmgren

Even in a net zero economy, we will still need carbon for many vital everyday products. Jennifer Holmgren HonFEI, CEO of LanzaTech, believes we can reduce emissions and create a circular economy by capturing carbon at source. Here she explains how and where sufficient finance may be found to reach commercial scale.

The energy transition is finally happening. We see it with the rise in solar panels, electric vehicles (EVs) and wind power. But our carbon problem isn’t just rooted in the resources we use for electricity.


Our entire way of life is built on carbon, from our fuel sources to the materials in our consumer products. We need a more sustainable way to source, use and dispose of carbon to protect the future of our planet and to ensure the sustainable development and growth of all economies.


We need carbon for chemicals that are the building blocks of our everyday products, as well as to produce sustainable aviation fuels (SAFs). Where we source this carbon is the true determining factor of our climate future. We now know we can recycle the carbon and CO2 that is already present above ground to make everything we need.


LanzaTech’s biorecycling technology captures carbon generated at source by energy-intensive industries, preventing it from emitting into the air. The company then gives that captured carbon a new life as a clean replacement for virgin fossil carbon in everyday products. This biology-based approach gives waste carbon a new life by recycling it into more sustainable versions of raw materials like ethanol, which is a building block for many other chemicals, including polyethylene and mono ethylene glycol (MEG). MEG is a key ingredient in the manufacture of polyester (PET).


In this way, ethanol from pollution can be converted into the material needed to make textiles that would otherwise be made by extracting virgin fossil-based carbon.


Examples include the production of textiles from steel mill emissions in China, sold by fashion retailer Zara, H&M, Move and Adidas; fragrances made with 100% ethanol derived from industrial emissions sold by COTY with the House of Gucci; and emissions-derived PET packaging made with Plastipak and used in drinks bottles in Germany with drugstore chain dm, and for cleaning product packaging with Mibelle and Migros in Switzerland.


Reaching commercial scale
There are many promising technologies out there to recycle waste carbon. But to get from laboratory to commercial scale involves crossing the so-called ‘Valley of Death’, which is closely followed by what I would term a ‘Grand Canyon of Death’ – getting to the rapid proliferation stage of the technology at commercial scale.


To achieve our climate goals, a large-scale, robust, rapid and sustained effort must be made to redesign our carbon economy in a way that benefits everyone, including the most vulnerable.


Today’s energy paradigm is based on virgin fossil carbon with centralised production at large-scale refineries. This means all the production is focused in one place. We need to find a new way of operating by creating distributed systems that can use new waste-based feedstocks, which are difficult to aggregate, to make the things we need.


To achieve our climate goals, a large-scale, robust, rapid and sustained effort must be made to redesign our carbon economy in a way that benefits everyone, including the most vulnerable.


Waste carbon can be found in almost every geography. It is diverse and low cost, available and point sourced. It is distributed and enables communities to leverage locally available inputs to make the products they need, decentralising production from at-risk areas vulnerable to the impacts of climate change and enhancing energy security and economic development.


At LanzaTech, we believe there is enough carbon available above ground to meet many of our needs, from industrial emissions that would otherwise enter our atmosphere, to municipal solid waste being thrown into landfills or incinerated for power.


This new circular carbon economy connects disparate stakeholders. One industry’s emissions become the feedstock for another and will advance business models that align economics with the planet for long-term commercial, social and environmental resilience.


Such carbon capture and utilisation solutions can be deployed around the world at sites where pollution occurs, including in developing nations, where wastes and residues could be transformed into an economic opportunity. Using a licensing model, distributed networks can be built enabling emitters to capture and transform their pollution into sustainable new fuels and materials. This enables more geographies to execute on projects, get steel in the ground and start producing non-fossil-based materials for a new carbon economy.


Financing the new circular carbon economy
There are many promising technologies out there to recycle waste carbon, but getting to the rapid proliferation stage of the technology at commercial scale requires significant amounts of capital. This is true each time you need to scale technology, and each step is incrementally more expensive as these are first-of-a-kind plants and there is always some type of risk involved, making insurance and financing costs high. All this means that financing new technologies takes time, which companies and our planet can ill afford.


Normally one engages multiple investors concurrently to push a project forward. This can impose months of due diligence on the company, the technology and the project.  


Recently, there have been several geopolitical shocks that have slowed progress in the energy transition. So, staying with the status quo on financing new technology isn’t an option.


To succeed in financing the new carbon economy, we need an equally innovative approach that brings together capital and technology, so we can achieve exponential and sustainable growth. Only then will we be capable of achieving our long-term climate ambitions.


The renewables sector succeeded because it used infrastructure funding to finance its exponential growth stage. Why not use the same model for process industries that can help with our non-power carbon problem?


Partnering with an infrastructure fund where the capital and technology companies work together, and where the fund has already done its due diligence on a technology, means that only unique characteristics of a project and its specific returns need to be assessed. A fund using this approach acknowledges the need to accelerate the transition, the difficulty in doing something new and will show leadership in scaling technologies to enable a new carbon economy.


This is a model that LanzaTech is adopting with Brookfield Renewable for projects in Europe and North America. In October this year, LanzaTech entered into a joint venture with Olayan Financing Company to deploy and develop projects in the Middle East. Both structures will radically cut the time needed to get to that critical investment decision. Projects that meet the investment criteria get funded and deployed sooner.  


It is all about speed
We have created a model we can scale in every region across the globe because we use distributed waste-based feedstocks and can use wastes that are specific to each country.


Embracing new financing models and distributed systems means we can get more plants online – and we can start solving our carbon problem today, which is what the world needs us to do.


The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.