Going Commercial:

The Road to Awesome

Jennifer Holmgren
CEO

US Department of Energy, Bioenergy Technologies Office

Demonstration and Deployment Strategy Workshop
Argonne National Laboratory
March 13, 2014
© 2014 LanzaTech Inc. All rights reserved. 1
 Energy Demand Rising

Population growth and climate change put pressure

on land, food, water, and ecosystems…
Share of Global Energy Demand
6 030 Mtoe 12 380 Mtoe 16 730 Mtoe
100%

80%

60%
Rest of non-OECD
40% Middle East
India
20%
China
OECD
1975 2010 2035

IEA World Energy Outlook 2012

2
While Carbon Emissions Keep Rising
Containing CO2 growth to safe atmospheric levels (below 450 ppm)
requires that zero carbon fuels make up > 30% of the fuel pool.
Current Rate: ~8 billion tonnes of CO2 per year
12 36%

10 30%

8 24%
Mtoe, K

6 18%

4 12%

2 6%

0 0
1990 2000 2010 2020 2030
Fossil fuels
Zero-carbon fuels
Share of zero-carbon fuels (right axis)
Source: IEA world Energy Outlook 2011

Data from NOAA* taken at Mauna Loa, Hawaii for

May 10, 2013 shows CO2 levels have exceeded 400 ppm
* National Oceanic and Atmospheric Administration
3
 Despite Large Energy Access Gap

1.3B people still lack access to basic energy

4
Source: EIA
The LanzaTech Process

Novel gas fermentation

technology captures CO-rich
gases and converts the carbon
to fuels and chemicals
Proprietary
Microbe
Gas Feed Stream

Gas Reception Compression Fermentation Recovery Product

Tank

• Gases are sole source of carbon and energy

• Production of fuels and chemicals
• Potential to make material impact on the future energy pool
(>100s of billions of gallons per year)
• Biofuel/chem, carbon capture and energy efficiency solution
No impact on water, food, land or biodiversity
5
LanzaTech-BaoSteel Demonstration Plant

Distillation
Bioreactor

Gas
Ethanol Handling
Storage WWT
Fast Path to Commercialization

Tang Ming
Group

2014 2015
2013
2008
2012

• Two Demonstration facilities in China 100,000 gallon/year ethanol capacity

 Exceeded all production and performance milestones
 Commercial facility approved for construction 2014
• Demonstration facility in Taiwan 12,000 gallon/year ethanol capacity
SMOG • China commercial facility in design; financing completed

• MSW Mobile Lab in Japan demonstrated operation with a syngas stream

• MSW Demonstration facility in Japan 6,000 gallon/year ethanol capacity Q4 2014
• Integrated syngas to Butadiene Demonstration facility Q1 2015 in Korea
SynGas
Scaling Up LanzaTech’s Technology

Strain
Development Lab 50 X Pilot 32 X Demo 25 X Commercial

2005 2008 2012 2014

Commercial Scale-up Factor Less Than What

Has Been Proven at Demo Scale
8
Waste Carbon as a Resource
for Product Synthesis
Industrial
Waste Gas Natural Gas, CH4 Solid Waste Biomass Inorganic CO2
Steel, PVC, Associated Gas, Industrial, MSW,
Ferroalloys Biogas DSW

Reforming Gasification Renewable H2 Renewable

Electricity

CO CO + H2 CO + H2 + CO2 CO2 + H2 CO2 + H2O + e-

Gas Fermentation

Fuels Food Chemicals

9
Butadiene: Key Chemical Intermediate

Styrene Butadiene
Rubber (SBR)

Global Market Size:

~4.9 million tons, ~$13 billion

Polybutadiene
Rubber (BR)
2,3-BDO Global Market Size:
Butadiene ~3 million tons, ~$8 billion
Global Market Size:
~11 million tons, ~$22 billion

Syngas
Acrylonitrile Butadiene Styrene
(ABS) Resins

Industrial Waste Global Market Size:

~8 million tons, ~$16 billion
Biomass Ethanol
NG Advanced
Coal Biofuel
MSW/DSW
Nylon 6,6
(from Adiponitrile/HDMA)

Global Market Size:

~1.8 million tons, ~$6.9 billion
10
1 organism, 20 products…so far!
Discovery Lab Pilot/
FAEE/FABE Cont. Demo
CO/H2
Fatty Acids, 3-HP Culture
Terpenoids
Farnesene
Pyruvate
Isoprene
sec-Butanol
Acetyl-CoA MEK All targets
Succinate
Exemplified
Lactate
1,2-PDO

n-Propanol Acetoin
Propanal meso-2,3-butanediol
i-Propanol
Acetone
D-(-)-2,3-Butanediol

3-HB 1,3-BDO
Butyrate
n-Butanol
Acetone
i-Propanol

Ethanol
© 2012 LanzaTech Inc. All rights reserved.
Output: Diverse Products in Large Markets

~1.7M bpd ~4 M MTA

Ethanol

Ethanol Butanol
Butanediol
Propanol

Hydrocarbon ~50 M MTA

~5.5M bpd Fuels
Other Products
- Acetic Acid
- Succinic Acid
- Isoprene
- …

~51M bpd
*2010 global consumption data -Harts, IEA
~8.5M bpd 13
Hybrid Route to Aviation Fuel

BETO is supporting LanzaTech and PNNL on a new route to jet fuel

from biomass and other CO point sources

Gas EtOH
Wood Gasification Fermentation
Catalysis Jet Fuel
Stover & Syngas & Alcohol Diesel / gasoline
2,3BD
Switchgrass
Conditioning Recovery Catalysis
Butadiene
Integration

System Integration, Optimization and Analysis

Alcohol to Jet (ATJ) is in process of ASTM Certification

14
Commercialization of Aviation Fuel

 Production of jet fuel from LanzaTech ethanol

demonstrated in 2012
 Off-take agreement executed with Virgin Atlantic
 ASTM certification: Approval targeted for 2014

Team Work is Key to Success

Imperial College of London

15
Waste Carbon as a Resource
for Product Synthesis
Industrial
Waste Gas Natural Gas, CH4 Solid Waste Biomass Inorganic CO2
Steel, PVC, Associated Gas, Industrial, MSW,
Ferroalloys Biogas DSW

Reforming Gasification Renewable H2 Renewable

Electricity

CO CO + H2 CO + H2 + CO2 CO2 + H2 CO2 + H2O + e-

Gas Fermentation

Fuels Food Chemicals

16
 Conversion of Acetate to Lipids

CO2 Carbon
Carbon Source
Source
Acetate • Yeast accumulate lipids to >70% of their cell mass
Energy
Source

H2 2nd fermentation
Energy
Source

• Algae accumulate lipids to >50% of their cell mass

• 40% of algal lipids content are Omega-3 fatty acids
(Specifically DHA)

Lipids Product Markets

Hydrocarbon Transport Fuels Oleochemicals Animal Feeds Food, Nutritional Supplements

>US $ 3 trillion/year US $15 billion/yr US $370 billion/yr US $25 billion/yr

17
Defining Commercial

It’s not just • Is it enough money to satisfy all project

about size… investors?
the plant • Is this a model that can be replicated?
needs to make • Will this activity guide a company
money toward financial sustainability?

• They take time

But first • They take money
commercials • And more time, and more
are difficult, as money
the technology
has never • Need supportive
performed at investors/partners and
project stakeholders that will
this scale,
stick with you – willing to
economically take a risk

18
 Bridging the Valley of Death

Science Technology Products Production

Competitive Marketing
Product Development
Technical Research

Ideas Market

19
 Getting a New Process to Scale

Continuous
Discovery
improvement
at scale

Applied R&D
Adapt and adopt
from others
Ease of funding

Engineering
Development

Diffusion

Pilot and
Demonstration

First Commercial

Evolution 20
So What’s Really Needed
to be Commercial?

 Viable technology - mitigated risk through rigorous

scale up
 Capital
 Market
 Regulatory environment
 Strong/invested partners
 Luck

Long, Difficult Path

21
Funding Options Enable Scale-up
Development/
Deployment
Capital
Seed Funding •DOE, USDA
•Government (ie. IBR’s,
(i.e.. FAA, Loan
DARPA-E, Guarantee
Office of Programs)
Liquidity Event
Science, NSF) •DPA
•Angel •Competitive • IPO
Investors grants • Merger/Acquisition

VC’s (Venture Strategics

Rounds) •Petronas
•Khosla Ventures •Bao
•MLSCF
•K1W1
•Qiming
Ventures

10+ Years to Cash Flow Positive

22
Remember, this isn’t the IT Industry!
IT/Software
Development
Years (prior Liquidity
Company to buyout) Event Value
Whatsapp: Bought
5 $19B
by Facebook 2014
NEST Labs: Bought
~4 $3.2B
by Google 2014
Instagram: Bought
2 $1B
by Facebook 2012
LinkedIn: IPO 2011 8 $4.5B
Biofuels/Bioproducts
Development Years Liquidity Current
Company (Lab to Commercial) Event Value Market Value
Gevo: IPO 2011 ~7: Commercial production initiated
at Luverne facility in 2012 but faced $373M
$66.1M
delays/shutdowns. Planned butanol
ramp up in future.
Kior: IPO 2011 ~7: Columbus, MS facility started
limited commercial production Nov
2012 and early shipments began in
2013. Currently facing production $1.5B $153.8M
problems. Developing plans for
flagship commercial facility in
Natchez, MS.
Amyris: ~8 : Past contract manufacturing.
IPO 2010 Ramp up commercial facility in São $688 $336.2M
Paulo, Brazil this year.
Solazyme: ~8: Commercial production online in
IPO 2011 February 2014 at Clinton, IA facility. $853M
$918.2M

LS9: Bought ~9 (no commercial production)

by REG 2013
$61.5M NA

Significantly More Time and Development Funds Needed to

Commercialize Industrial Biotech 23
With The Help of Our Friends

Burrill & Co.

K1W1
Jump to the Next Curve

25
Creating a Low Carbon Future
The Path Forward is Biology

BuiltUsing Distributed
for small scale Feedstocks
• Consolidate
• Extremely temperature/pressure variations
high selectivity
• Reduce
• Direct, complexity
one-step of separations
conversion
• Simplify
• Single set ofmanufacturing for deployment
process conditions

Incorporating
Adapted for changingMolecular Diversity
environments
of Feedstocks
• Feedstock flexible for same product
• Develop feedstock flexible processes
• Tolerant of contaminants
• Tolerant of contaminants
• Evolved for high
• Target high efficiency
efficiency

Enabling Product Flexibility

Complexity is free
• Match the product with application,
• Regenerative
not reversecatalysts
• Process
• Demandupgrades with no down
transportation timechemical
friendly
• Tailorintermediates
products for each application
• Maximize profits with flexible product slate
26
China Today

View out of
Sheraton
Pudong
12/8/13
and
1/14/14

Woman on Catwalk in a Fashion Show, Shanghai

As Shown in Taiwan Paper 12/7/13
A Few Predictions

“This ‘telephone’ has too many shortcomings to be seriously

1876 considered as a means of communication” Western Union Memo

“Heavier-than-air flying machines are impossible”

1895 Lord Kelvin, President Royal Society

“The wireless music box (radio) has no imaginable commercial value”

1920 David Sarnoffs Associates in response to his urgings for investments in the radio

“I think there’s a world market for maybe five computers”

1943 Thomas Watson, Chairman IBM

“Computer in the future may weigh no more than 1.5 tons”

1949 Popular Mechanics forecasting the relentless march of science

“There is no reason anyone would want a computer in their home”

1977 Ken Olson, President, Chairman and Founder of Digital Equipment

“640K ought to be enough computer memory for anyone”

1981 Bill Gates

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Predictions are simply extrapolations
of the past…

…innovation expands
the ‘art of the possible’

…today’s ‘unimaginable’ is
tomorrow’s ‘conventional wisdom.’

29
“It is very difficult to predict the future,
it is much easier to invent it.”
Alan Key

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