Ethanol from waste means big dollars for firm

UP AND DOWN: Smoke billows from the Baosteel factory in Shanghai. LanzaTech will build a waste-gas-to-fuel plant for China's biggest iron and steel conglomerate.

A bacterial process which converts waste gas into fuels is expected to become a "money-spinner" for investors, including The Warehouse founder Stephen Tindall, within three years.

New Zealand-based clean technology company LanzaTech confirmed yesterday it had secured $25 million from investors, spearheaded by venture capital firm Qiming Ventures, to commercialise its waste-gas-to-fuel process.

The biotechnology company will use the cash to build a pre-commercial plant at a Baosteel steel mill in China, which could be capable of producing 200 million litres of ethanol per year from the plant's waste gas.

The investment came on top of $19.3m pumped into the company by a group of investors including US company Khosla Ventures and Mr Tindall's K1W1.

Baosteel is China's largest steel and iron conglomerate and signed a commercialisation deal, along with the Chinese Academy of Sciences, with the company in June.

LanzaTech already operates a pilot project at the Glenbrook steel mill which produces about 57,000 litres of ethanol a year from waste gas.

The company is drawing up the final plans for its Chinese waste gas plant and expects construction to begin in a few months, LanzaTech co-founder Sean Simpson said.

Completion of the China plant is the next step towards turning the company's technology into valuable intellectual property.

"We have got to show in our China project that we can make this large scale," Dr Simpson said.

"There are risks, and there could be set-backs during the process, but once any problems are overcome we are very confident there is a significant market for this technology. This plant takes us firmly into the marketplace." He expected first results from the plant to come through within a year. The technology could then be rolled out across India, the USA, Europe and elsewhere once tested and proved, Dr Simpson said.

"Within two to three years it will be a money-spinner." LanzaTech intends to hold onto its intellectual property and not licence the technology, preferring to share revenue generated through the sale of any fuels or chemicals produced.

source: stuff.co.nz