LanzaTech ethanol from carbon gets funding

New Zealand-based LanzaTech, a company pursuing the conversion of carbon monoxide into ethanol using bacteria, today officially announced a $3.5M USD Series A financing, led by Khosla Ventures.

The funding is to support further technology development, establishing a pilot plant, engineering work to prepare for commercial-scale ethanol production, the company said.

The company estimates that its bacteria-based approach could produce 50 billion gallons of ethanol from carbon monoxide emissions from the world's steel mills alone, turning the liability of carbon emissions into valuable fuels worth over $50 billion per year at low costs, and adding value to the steel industry.

The technology could also be a key contributor to the cellulosic biofuels business, as it shows promise for being able to convert syngas produced through gasification into ethanol, the company claimed.

"We have proven in our laboratories that the carbon monoxide in industrial waste gases such as those generated during steel manufacture can be processed by bacterial fermentation to produce ethanol," said Sean Simpson, chief scientist and founder of LanzaTech.

Other companies, such as Boston-based GreenFuel, have been working to develop equipment and processes to use algae to convert carbon dioxide (CO2) from industrial emissions into biodiesel and/or other fuels.

"Technology to produce fuel ethanol from waste material, such as the carbon monoxide produced in steel manufacture and other industries, makes use of a low cost and plentiful point source carbon feedstock. The opportunity is a large one as carbon monoxide is a significant by-product of steel manufacture," said investor Vinod Khosla.

LanzaTech is pursuing the development of advanced gas to ethanol technologies in its laboratories in Auckland. It has sought international patent protection for its ethanol production process and is forming partnerships to commercialize its technologies and processes.

Khosla Ventures was joined by two existing New Zealand based investors in the Series A round.

This investment "positions the company to raise significant capital in the near future," LanzaTech said in a statement.

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