LanzaTech Awarded $3 Million from U.S. Department of Energy to Advance Conversion of Waste CO2 into Valuable Chemicals

Rhea-AI Summary

LanzaTech Global, Inc. (NASDAQ: LNZA) has been awarded $3 million by the U.S. Department of Energy's Office of Fossil Energy and Carbon Management (FECM) for Project ADAPT. This initiative aims to advance the conversion of waste CO2 into valuable chemicals, specifically isopropanol. The project, with a total cost of $3.8 million including LanzaTech's contribution, focuses on:

• Enhancing feedstock versatility
• Optimizing microbial strains
• Improving cost-effectiveness and efficiency

Isopropanol, used in various products and as a precursor to propylene, offers significant environmental benefits when produced from recycled CO2. The project aligns with the Biden-Harris Administration's climate goals and is expected to impact LanzaTech's financial results primarily in 2025 and 2026.

Positive

• Received $3 million government funding for CO2 conversion project
• Project aims to produce sustainable isopropanol with over 200% greenhouse gas savings
• Targeting propylene market projected to reach $150 billion by 2030
• Aligns with government's carbon neutrality and net-zero emissions goals

Negative

• Company required to contribute $0.8 million to the project

Insights

Sustainability Expert

This $3 million DOE grant for LanzaTech's Project ADAPT marks a significant step in carbon recycling technology. The focus on converting waste CO2 into valuable isopropanol demonstrates a dual benefit: reducing greenhouse gas emissions while creating a marketable product. With potential GHG savings of over 200% compared to fossil-based production, this technology aligns perfectly with global decarbonization goals.

The project's emphasis on versatility, strain optimization and cost efficiency shows a comprehensive approach to scaling up CO2 utilization. The projected $150 billion propylene market by 2030 presents a substantial opportunity for LanzaTech if they can successfully commercialize this technology. However, investors should note that the immediate financial impact is , with the $3.8 million project costs spread over 2025-2026.

While promising, the technology is still at a pilot scale and commercial viability remains to be proven. The government support is encouraging, but long-term success will depend on LanzaTech's ability to scale up efficiently and compete with traditional production methods.

Chemical Industry Analyst

LanzaTech's Project ADAPT represents a significant innovation in the chemical industry. The production of isopropanol from waste CO2 addresses two critical industry challenges: sustainability and feedstock diversification. This approach could potentially disrupt the traditional petrochemical supply chain, offering a more environmentally friendly alternative to fossil-based isopropanol production.

The $150 billion propylene market projection for 2030 underscores the massive potential for this technology. If LanzaTech can scale this process cost-effectively, it could capture a substantial market share and potentially command premium pricing for its "green" product. The focus on process optimization and strain development is important for achieving commercial viability.

However, investors should be cautious. The $3 million grant, while significant for R&D, is modest compared to the scale of investment typically required for commercial chemical plants. The path from pilot to commercial scale is often challenging and capital-intensive. LanzaTech's success will hinge on its ability to attract further investment and strategic partnerships to bring this technology to market.

Project uses waste CO2 as a feedstock to produce sustainable isopropanol, a common alcohol found in everyday products

CHICAGO, Oct. 16, 2024 (GLOBE NEWSWIRE) -- LanzaTech Global, Inc. (NASDAQ: LNZA) (“LanzaTech” or the “Company”), the carbon recycling company transforming waste carbon into sustainable fuels, chemicals, materials, and protein, has been awarded $3 million by the U.S. Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM), as part of a broader $29 million investment program to advance its carbon management priorities. LanzaTech’s Project ADAPT (“Accelerating Decarbonization via Advanced Production Technologies”) was selected to address FECM’s priority of converting carbon dioxide (CO₂) into environmentally responsible and economically valuable products.

LanzaTech’s Project ADAPT builds upon the Company’s existing capabilities of using CO₂ as a feedstock to produce isopropanol at a pilot scale and aims to advance the process and platform with the following key focus areas:

1. Versatility in Feedstock Use: Enhancing the platform's ability to process a range of gas mixes with CO₂
2. Microbial Strain Optimization: Employing advanced gene-editing techniques to develop tailored microbial production strains for making isopropanol and other prevalent chemicals
3. Cost and Efficiency Improvements: Refining the end-to-end process to be more cost-effective, efficient, and more robust
   

Isopropanol is a common alcohol used in an array of everyday products such as cleaning agents and is also a precursor to the propylene value chain. Propylene, which is a building block for packaging, medical supplies, automotive products, among many other applications, has a thriving demand market that is projected to approach $150 billion and 180 million tons by 2030. Importantly, isopropanol production has the ability to achieve greenhouse gas savings of over 200% when produced from recycled CO₂ instead of fossil carbon, and a non-fossil commercial production pathway does not exist today.

Project ADAPT will primarily be funded by the FECM investment of $3 million and includes a Company funded cost share portion of approximately $0.8 million, totaling an estimated project cost of $3.8 million. Revenue and costs related to this project will be reported as Joint Development Agreement and Contract Research results for LanzaTech, and the majority of revenue is expected to be received and benefit financial results in 2025 and 2026.

"We are thrilled to receive this support from the U.S. Department of Energy to progress our work around scaling the conversion of waste CO₂ to make some of the world’s most needed chemicals," said Dr. Jennifer Holmgren, CEO of LanzaTech. “CO₂ is an essential feedstock of today and the future, and Project ADAPT leverages our expertise and existing operations to accelerate the commercialization of transformational carbon capture and utilization technologies that deliver cleaner and more sustainable energy and products.”

The projects supported by FECM’s investment program are in keeping with the Biden-Harris Administration’s aggressive climate ambitions of reaching a carbon-neutral power sector by 2035 and net-zero greenhouse gas emissions by 2050.

About LanzaTech
LanzaTech Global, Inc. (NASDAQ: LNZA) is the carbon recycling company transforming waste carbon into sustainable fuels, chemicals, materials, and protein for everyday products. Using its biorecycling technology, LanzaTech captures carbon generated by energy-intensive industries at the source, preventing it from being emitted into the air. LanzaTech then gives that captured carbon a new life as a clean replacement for virgin fossil carbon in everything from household cleaners and clothing fibers to packaging and fuels. By partnering with companies across the global supply chain like ArcelorMittal, Zara, H&M Move, Coty, On, and LanzaJet, LanzaTech is paving the way for a circular carbon economy. For more information about LanzaTech, visit https://lanzatech.com.

Forward Looking Statements
This press release includes forward-looking statements regarding, among other things, the plans, strategies, and prospects, both business and financial, of LanzaTech. These statements are based on the beliefs, assumptions, projections and conclusions of LanzaTech’s management. Forward-looking statements are inherently subject to risks, uncertainties and assumptions, many of which are outside LanzaTech’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. LanzaTech cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are not guarantees of future performance, conditions or results, and you should not rely on forward-looking statements.

Generally, statements that are not historical facts, including those concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or similar expressions. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

• Timing delays in the advancement of projects to the final investment decision stage or into construction;
• Failure by customers to adopt new technologies and platforms;
• Fluctuations in the availability and cost of feedstocks and other process inputs; • The availability and continuation of government funding and support;
• Broader economic conditions, including inflation, interest rates, supply chain disruptions, employment conditions, and competitive pressures;
• Unforeseen technical, regulatory, or commercial challenges in scaling proprietary technologies, business functions or operational disruptions; and
• Other economic, business, or competitive factors, and other risks and uncertainties, including the risk factors and other information contained in LanzaTech’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, as well as other existing and future filings with the U.S. Securities and Exchange Commission.

Any forward-looking statement herein is based only on information currently available to LanzaTech and speaks only as of the date on which it is made. LanzaTech undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

LanzaTech Global, Inc.

Investor Relations
Kate Walsh
VP, Investor Relations & Tax
Investor.Relations@lanzatech.com

Media Relations
Kit McDonnell
Director of Communications
press@lanzatech.com

FAQ

What is the purpose of LanzaTech's Project ADAPT?

Project ADAPT aims to advance the conversion of waste CO2 into valuable chemicals, specifically isopropanol, by enhancing feedstock versatility, optimizing microbial strains, and improving cost-effectiveness and efficiency.

How much funding did LanzaTech (LNZA) receive for Project ADAPT?

LanzaTech received $3 million from the U.S. Department of Energy's Office of Fossil Energy and Carbon Management (FECM) for Project ADAPT.

What are the potential environmental benefits of LanzaTech's isopropanol production?

Isopropanol production from recycled CO2 has the potential to achieve greenhouse gas savings of over 200% compared to production from fossil carbon.

When is LanzaTech (LNZA) expected to see financial results from Project ADAPT?

The majority of revenue from Project ADAPT is expected to be received and benefit LanzaTech's financial results in 2025 and 2026.