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Good morning! It's Tuesday, January 9th. Today’s post looks at LanzaTech, the first company to recycle greenhouse gas waste back into chemical products!

THE FEATURE

LanzaTech's Billion-Dollar Bet: Transforming Carbon Waste into Valuable Products

Today, hydrocarbon-based items are everywhere, from the stretchy nylon in your legging to the tupperware used to store your food. 

Hydrocarbon products make our lives far more convenient, but they can take hundreds of years to break down, resulting in dramatic environmental pollution, as seen in the Great Pacific Garbage Patch.

Richard Forster is looking to maintain the modern conveniences provided by oil-based products while decreasing the environmental load through his company LanzaTech, which hit a stunning $1B valuation last month!

So, What's the Business?

For decades, scientists have looked to reduce the environmental impact of carbon gases via biofuel blends— a mix of traditional fuel with renewable biological sources. 

However, there was always one big problem: finding enough biofuel. For instance, the Green Hornet project resorted to using cooking oil to manufacture enough biofuels to power a small portion of the US military's aircraft. 

LanzaTech was founded in 2005 to solve that big problem, and it's proven to be revolutionary. 

Rather than leveraging nature-based resources to create sustainable fuels, LanzaTech collects carbon waste from industrial producers as feedstock. Unlike biofuel, there's no concern about running low on carbon waste— for every ton of steel produced, 1.85 tons of carbon dioxide are produced!

Forster founded LanzaTech on a gamble that he could create the first bioreactor that used anaerobic bacteria to convert gases from industrial producers into hydrocarbon products like ethanol. 

Today, it's clear that the gamble paid off. LanzaTech attaches carbon-collecting bioreactors to the emission points of industrial facilities around the world, and its genetically modified bacteria are now capable of producing 50 different kinds of hydrocarbons. 

Of these 50 hydrocarbons, LanzaTech produces ethanol, acetone, and IPA in commercial quantities, generating $37.3M from selling them last year. 

How They Win: Making Recycled Hydrocarbons a Fashion Statement

The foundation of LanzaTech has always relied on partnerships with various energy producers, such as Indian Oil Corporation, Neste, and Dow. This makes sense: a carbon-capturing company needs to ally itself with those producing carbon.

However, one of LanzaTech's most recent partnerships differs from the rest and introduces recycled hydrocarbons to the fashion industry.

Last winter, fashion retailer Zara rolled out a collection of black dresses with a twist. The polyester dresses, an ethanol-based material, were sourced from LanzaTech's bioreactors, more specifically, bioreactors hooked up to a Chinese steel mill.

Zara's winter collection was the first clothing line to come to market that used recycled hydrocarbons.

While it was the first, it certainly won't be the last. Lululemon has already announced the development of high-end yoga pants that use LanzaTech's ethanol. Swiss sports brand On is also beginning to use LanzaTech's ethylene to create PVA, the foam in running shoes.

These fashion industry partnerships show LanzaTech's unique competitive edge in the chemical industry. In addition to creating hydrocarbons from waste, it makes carbon-based products fashionable again in the eyes of environmentally conscious consumers. This encourages more clothing manufacturers and distributors to partner with Lanzatech as they can sell their products at a higher price point because of its environmental sustainability.

Key Observation

Each LanzaTech carbon collector installed turns the harmful byproducts from steel mills and waste sites into revenue while simultaneously eliminating greenhouse emissions, a world-changing innovation that can't be overstated.

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