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JAN 5, 2022

Happy new year! We hope you and your family had a healthy and restful holiday break.

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Send your energy photos, ideas and more to news@ciphernews.com or to me directly at amy@breakthroughenergy.org.

HARDER LINE COLUMN
Carbon recycling pioneer LanzaTech eyes going public
BY: AMY HARDER

LanzaTech is not a household name, but the company’s technology is helping clean up household items.

Laundry detergents, yoga clothes, running shoes and even that little black dress (from fashion brand Zara) are being at least partially manufactured with carbon emissions from steel mills using LanzaTech’s technology.

LanzaTech, founded 17 years ago, is at the forefront of the burgeoning carbon management industry that could be central to efforts to slash carbon dioxide emissions and stabilize rising temperatures. We have too much carbon in the sky, so we need to figure out how to recycle at least some of it.

LanzaTech has raised more than $550 million from roughly 25 investors, including $30 million last month from steel giant ArcelorMittal, according to PitchBook, a financial research firm and data provider.

It’s now mulling going public. No carbon management startup has gone public before, which would make LanzaTech the first if it follows through, according to Svenja Telle, PitchBook’s emerging technology analyst.

“I think you could argue that, now that we’ve commercialized, it’s time to really enter the public markets. I think that’s the best way to help diffuse the technology, and I would say we’re starting to think about that very seriously,” said Jennifer Holmgren, LanzaTech CEO, in an exclusive Cipher "Innovators" virtual interview.

LanzaTech’s technology works like a brewery. But instead of using sugars and yeast to make beer, LanzaTech uses bacteria to convert pollution into fuels and chemicals, which are then turned into products ranging from yoga clothes to sustainable aviation fuel.


Over the last year, LanzaTech has inked product partnerships with at least nine companies, including Lululemon, Zara, Unilever, L’Oréal Paris and On, a Swiss running apparel brand.

This diverse list is a testament to LanzaTech’s technology, but it also reflects the fact that carbon is everywhere. So are LanzaTech’s challenges.

One is cost. The raw materials LanzaTech’s technology requires costs two to three times more than fossil fuel-based processes that don’t account for their environmental impact, Holmgren said.

Cipher reached out to several of the consumer brands partnering with LanzaTech to ask about cost and emissions impact.

On, a Swiss brand of high-end running shoes, is working with LanzaTech to manufacture the foam in its shoes from waste carbon, with prototypes anticipated next year.

The project has cost On more than 1 million Swiss francs (about the same in U.S. dollars). Its co-founder, Caspar Coppetti, told Cipher in an email it plans to invest more.

Coppetti wouldn’t disclose the cost to consumers, but “the goal is to keep it within the On price range.” On’s shoes typically run at least $10-$20 more than other brands, with prices usually beginning at $130.

Unilever is partnering with LanzaTech to sell detergent products made partially from carbon emissions in China, South Africa and Germany as pilot programs, said Jonathan Hague, vice president of science and technology at Unilever. The products don’t cost consumers anything more, he said.

Whether detergent or shoes, the amount of carbon being stored in these types of products is small, but they’re still filling a critical role in technology development, experts say. Ultimately, most carbon will need to be stored underground.

“Utilization of carbon is great to bring down the cost curve,” said Noah Deich, president and co-founder of Carbon180, a nonprofit focused on removing carbon from the atmosphere. “To scale carbon removal to the size we need, it’s nowhere close.”

LanzaTech is looking to eventually use carbon captured directly from the atmosphere in its processes. An early step toward that effort is its partnership announced last summer with Carbon Engineering, a direct-air carbon capture firm, to make sustainable aviation fuel (SAF) from captured carbon in a United Kingdom-based project.

LanzaTech spun off its sustainable aviation fuel business into a separate firm (LanzaJet) in 2020 to accelerate the commercialization of that technology. LanzaJet’s SAF production facility in Georgia, with funding from the Energy Department and LanzaTech, should be completed by end of this year and operational by 2023, according to LanzaJet CEO Jimmy Samartzis.

That Georgia facility is an anomaly for LanzaTech—for now.

Most of LanzaTech’s business is outside of the United States despite its headquarters being in Illinois. The carbon going into products are coming from iron and steel mills in China.

President Biden has made it a cornerstone of his climate agenda to ensure new technologies are developed here first.

Holmgren said one key reason LanzaTech didn’t pursue the technology deployment in the United States is because the federal renewable fuel standard, a law first passed in 2005, didn’t allow its technology to qualify for incentives. “So, we went somewhere else to scale our technology,” Holmgren said.

Holmgren is hopeful that will change with the billions of dollars in government incentives allocated to this type of tech in the roughly $1 trillion infrastructure law (see below for a chart). That law, she said, “will allow us to build plants here in the United States.”

Amy’s Lunchtime Reads
and Hot Takes

Carbon-Neutral Product Labels Are Proliferating. Will They Pay Off?The Wall Street Journal (paywall)
My take: Huh. Candy-maker Mars, Inc. makes the Royal Canine pet food bran, I learned by reading this. Mars is going to mostly buy carbon offsets to make its products “carbon-neutral,” but it could use carbon-removal technologies “in the future if they are cost effective,” a company exec says. Judging by what it costs me to buy Royal Canine for my cat with a chronic upset tummy, I think Mars could probably afford to invest in helping bring those tech costs down today!

Europe Plans to Say Nuclear Power and Natural Gas Are Green InvestmentsThe New York Times
My take: Tackling climate change means pursuing all technologies possible, not just the popular ones. Nuclear power is probably the most unpopular essential climate technology, so this move is facing uneven blowback across Europe. It’s too bad there isn’t a way for natural gas to be labeled transitional without being labeled green because natural gas isn’t green, but it’s probably necessary for a while.

DOE unveils $1B loan for hydrogen plant. But is it 'clean'?E&E News (paywall)
My take: Amidst the color-coded debate about blue and green hydrogen, let’s not forget turquoise! Hydrogen dubbed with this color is made using natural gas and a process called pyrolysis, which emits less carbon than blue hydrogen (which also uses natural gas). This is a promising sign that a black-and-white debate about whether a certain type of hydrogen is good or bad could give way to more nuanced shades-of-gray type talk (I think overdid it on the color metaphors).

We’re Heading Toward a Very American Climate TragedyThe Atlantic
My take: Rob Meyer wisely noted that Congress passing only the infrastructure law could just subsidize China’s industrial dominance further.

Developing countries need better access to low-emission energy technologiesReuters
My take: A staggering stat from this: The world’s primary energy consumption would be more than twice as much as it is today if developing countries consumed energy at the same per capita level as their richer counterparts. We must find ways to let the developing world advance while slashing emissions.

Nuclear Power Has a Second Chance to Prove ItselfThe Wall Street Journal (paywall)
My take: Anti-nuclear environmentalists have recently been resting much of their opposition to this technology on costs. This article does a good job laying out how costs could come down for new advanced nuclear technologies.

Climate Change’s Effects on 193 CountriesThe New York Times
My take: Forget Instagram, this is what I call healthy scrolling—albeit on a sobering topic.

More of what I'm reading:
  • What to watch at DOE, FERC, Interior in 2022 E&E News
  • Nuclear Power: 3 Reasons It Has Returned to the Energy and Climate Debate — Foreign Policy
  • Manchin sees path to climate deal E&E News
  • Six Tesla workers file additional lawsuits alleging sexual harassment — The Washington Post
  • California net-metering proposal would decimate rooftop solar market, industry says — Canary Media
  • The oil and gas industry may be making a bad bet on blue hydrogen — Quartz
DATA DIVE
U.S. federal funding for carbon removal tech skyrockets
Source: Carbon180

The big increase in funding beginning this year reflects the infrastructure law’s appropriations for carbon removal technologies.

This includes the $3.5 billion in Energy Department funding on an annual basis in the coming years.

The Build Back Better proposal, whose fate as currently constructed remains uncertain, includes tax incentives the industry considers critical to its long-term success.

AND FINALLY...
Coal train-ing a pup
Meet Zuri, my sister’s 9-month-old German Shepard. I snapped this photo as our family took a walk around our ranch in Eastern Washington last month. Look closely at the train in the background. That’s coal piled to the brim coming from Wyoming and Montana headed to export terminals in Canada.
Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.
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