Companies begin using waste gas to produce ethanol

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, December 4, 2012

Alternative fuel company Lanzatech NZ Ltd. today announced that it has successfully converted waste gases from a Chinese steel mill into transportation fuels and chemicals.

The success of the demonstration project with Baosteel Group Corp., China’s second-largest steel company, along with recent approvals by a national Chinese review panel, means LanzaTech is ready to begin a commercial-scale plant next year using the technology, the company said today.

“This has been an exciting ride,” LanzaTech CEO Jennifer Holmgren said in a statement today. “Scaling new technologies can be a daunting process but our teams have worked well together and we have made great progress.”

New Zealand-based LanzaTech, which purchased the bankrupt Range Resources cellulosic biofuel plant in Georgia earlier this year, is part of a growing trend of companies producing fuels from gas.

LanzaTech currently has two projects located near steel mills in China, both demonstration plants born out of joint ventures that are able to produce 100,000 gallons a year of ethanol. The Baosteel facility is further along than a second project with Capital Steel, another of China’s largest steel companies.

In the project at Baosteel’s Shanghai mill, LanzaTech channels waste gases from the steel plant, including carbon, into a bioreactor filled with microorganisms. Through fermentation, the gas is converted to ethanol.

A review panel from China’s National Development and Reform Commission last month reported that the project met international standards and milestones, giving the go-ahead for LanzaTech to scale up the technology to a commercial-size plant.

“The success of this facility will play an important role in the commercialization of clean energy technologies in China,” Baosteel Chairman Jia Yanlin said in a statement today. “This technology has enormous potential in the Chinese market as it will positively impact our manufacturing sustainability as well as China’s new energy development.”

The technology, Holmgren said in a recent interview at the advanced biofuels industry’s annual conference in San Francisco, is fairly inexpensive because LanzaTech does not have to pay for moving the gas to a site or for making it through a gasification step. She said it could also provide a way for China to lower its carbon footprint while still building up its manufacturing.

Holmgren, who is based out of LanzaTech’s Chicago offices, said the company targeted China specifically because of its large steel industry.

“It’s an obvious application of our technology. Almost 50 percent of the world’s steel is made in China,” Holmgren said. “Also … carbon is something that people talk a lot more about outside of the U.S. than they do here, and I think in a lot of ways, strategies that can mitigate carbon gain a lot of traction in places like China.”

Holmgren said that she is exploring whether a similar project could be paired with a U.S. or Canadian steel mill but that it takes longer to develop projects in North America than in Asia. In the United States, LanzaTech has focused on using the former Range Resources plant in Georgia, which it now calls Freedom Pines, to convert woody waste into jet fuel or chemicals.

A larger trend

While LanzaTech is the first company to recycle steel mill gases into ethanol through a fermentation process, several other companies are also looking into using gas as an input in the push to create a next generation of biofuels that does not use corn

“I see more and more people interested in converting CO2,” Holmgren said. “I’m also seeing people getting interested in natural gas through an organism. I’m seeing a lot of gas fermentation, whereas a few years ago nobody was even talking about it.”

Natural gas is at the top of several companies’ lists. Hydraulic fracturing in the United States has opened up a wealth of possibilities for advanced biofuel companies by unleashing a “vast amount of excessive natural gas,” said William Roe, president and CEO of renewable energy company Coskata Inc., at the conference in San Francisco.

Coskata made headlines earlier this year when it announced it would focus on natural gas as an ethanol input rather than woody biomass, the feedstock for cellulosic biofuel. Coskata’s technology converts the natural gas into a synthetic gas, which is then fed into bioreactors containing bacteria that can convert it into fuels and chemicals.

“We have way more gas than we know what to deal with at this point, which solves a critical issue for those of us who can use natural gas as a feedstock,” Roe said, “because it’s the one feedstock that is very, very cheap today that is in excess of what we can possibly imagine using and gathering.”

Roe said that the company was not abandoning cellulosic ethanol but that “we just don’t want to take the risk right now” without policy certainty in Washington, D.C., regarding the renewable fuel standard, which mandates certain levels of biofuel production each year. Critics have said they would fight to reform or repeal it next year in Congress.

There are still policy questions around using gas as a feedstock, though. The ethanol LanzaTech makes from steel waste gases, for example, does not qualify for credit under the renewable fuel standard because the feedstock is considered a fossil input.

“The problem is that with new technology, it’s hard to get a foothold because legislation is always written based on old technology,” Holmgren said. “So it puts new technology at a competitive disadvantage, and I really think legislation has to be more and more written in a way that it is technology-neutral, so that what ends up happening is it’s all about the input and the output and whether you can keep certain goals, and if you can, then it should all qualify.”