“There is enough carbon above ground for us to make everything we need to”

In simple terms, what does LanzaTech do?

What we do is fermentation. It’s like making beer with sugar, but we don’t use sugar. We use gases (carbon dioxide, carbon monoxide and hydrogen) and ferment them to produce ethanol. Ethanol has many applications beyond blending with gasoline (petroleum). You can produce ethanol and use it as an intermediate to make sustainable aviation fuel (SAF) and materials like polyester. In the longer term, we can also manufacture other chemicals and materials. That is the future: the ability to make any product from waste. There is enough carbon above ground for us to make everything we need.

How scalable are technologies like carbon capture and recycling and waste-to-energy?

They are scalable but you have to think differently. In oil, economies of scale are obtained by building as large a refinery as possible. But in this case, you have to think about a distributed model. Suppose you want to use agricultural waste to produce ethanol. You don’t want to collect it from everywhere and bring it to one or a few large plants. Instead, you want units where the waste is located. It involves decentralization and is a lot like solar power. You can put up a small solar unit for the village without the need for a large transmission infrastructure. This decentralized approach also guarantees local supply chains, jobs for the locals and some energy autonomy for them. Although India is not an oil-rich country, it does have enough carbon.

How do you see the evolution of carbon capture and recycling for India in the next five to 10 years?

I expect a significant fraction of India’s carbon portfolio to come from local sources. Energy can be carbon free with renewable energy, so forget about energy. Use carbon only to make things and to fly. I hope that in 10 years, India can say that 30 to 40 percent of what they use is being made in the country with local resources. For example, there are many companies that make PET (polyethylene terephthalate, a plastic) in India. Why shouldn’t they make it with recycled carbon? Who has to import oil to make it?

What should be the role of government in boosting carbon capture and recycling?

These new technologies are currently very expensive, but the more you build, the cheaper they get. Therefore, there must be a strong push from governments to build more units based on these processes, as that will reduce costs. Viability Gap Financing (VGF) is essential to build the baseload of commercial plants. Venture capital is hard to come by and takes time. Once you build more plants, costs will drop and VGF will not be needed. In Europe they have the Innovation Fund and in the US there is infrastructure financing. In addition to VGF, green premium payments can also help.

But you also have to consider some kind of carbon mandate. You can impose a carbon tax or require a certain amount of low carbon products in your portfolio of fuels and chemicals. But you have to be careful. You do not want to impose additional costs on consumers. A country like India should not do that, in fact no one should. Sustainability shouldn’t cost more.

The oil industry is a century-old industry and has benefited from incentives for a century. To say that we want this new technology or product to compete with oil without incentives would be unfair. And that’s why governments have a very important role to play if they want a world where carbon is used differently. They really need to step up. We don’t have that much time.

And the big corporations? What should your role be?

Our partners like Zara and Unilever buy our polyester at a higher price but don’t pass it on to the consumer. They just take smaller margins. I think it’s very important that companies also take a leadership role because I don’t think the regular consumer should pay more for sustainability. It is also important for these visionary companies to have shareholders and a government that supports them. And we as consumers should also go buy more of those companies.

It already has three commercial plants in China and a large demonstration plant in Japan. What about your plans for India?

The Panipat facility (in collaboration with the IOC) will be the first in India. The unit will use refinery gas to produce ethanol and will be the first unit of its kind in the world. We are also doing a project, designing with MRPL, to make ethanol from agricultural residues. Such projects have great potential when it comes to scalability. In addition, LanzaJet (a spin-off of LanzaTech) and IOC are setting up a SAF plant in Panipat. We want to grow in India. We think that India is a great country to do something in this area.

We are talking to steel companies in India (for carbon capture), but I have nothing more to share on that at this time.

India is a very price sensitive market, particularly in terms of fuel. What are the other challenges you see in India regarding carbon capture and recycling?

I don’t think India is different from others in that sense. Your refineries can make the decision to capture carbon. But you’re right, the country is price sensitive. And it is so because there are more people who cannot afford it. Pioneers are needed, visionaries are needed who can pay more, and India has as many people as any other country. Those are the people who need to step up to allow the technology to roll out and the price to come down, so everyone else can afford it too.

SAF is touted as the next big thing in aviation and there are signs that the Indian government could introduce combined SAF mandates. Is mandates the right way for a country like India, since SAF is expensive?

I think the reason India wants to do something with the mandates is because CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) will be mandatory in 2027. It’s going to be very bad for India and Indian airlines if the government doesn’t press. carriers in that direction. In addition to the mandates, the government should also consider things like VGF and other incentives, as the costs are currently very high globally.

So there are two ways to do it. There are mandates but there are also incentives. In the US, there are incentives to use SAF. India has to choose whether it prefers to provide incentives to enable cost parity or whether it prefers to have mandates. But you need something. It’s not going to happen alone.