LanzaJet Inc. announced a $30 million investment by Southwest Airlines Co. on Wednesday that will see the Chicago clean energy startup develop a new sustainable aviation fuel (SAF) production facility in the U.S. with Southwest as the anchor offtaker.
Spun out of LanzaTech in 2020, LanzaJet converts ethanol into SAF and renewable diesel.
The announcement follows LanzaJet's opening last month of its Freedom Pines Fuels facility, the world's first alcohol-to-jet (ATJ) sustainable aviation fuel production plant in Soperton, Georgia. LanzaJet's fuel is designed to help decarbonize the aviation industry with the startup's goal to get to 1 billion gallons of SAF production by 2030.
The airline industry has set goals to replace 10% of its jet fuel consumption with SAF by 2030, though LanzaJet CEO Jimmy Samartzis thinks it may be hard to achieve that at this point.
"Today as an industry we sit at less than 1% of SAF production compared to fossil fuel," he told Chicago Inno. "So over the next six years, we somehow need to accelerate the development of these plants to reach 10% — difficult at this point to likely meet, though we at LanzaJet are very confident in what we're doing with our technology and contribution to get to that 2030 target. But across the industry overall we're not seeing the investment that's required to build out the infrastructure at this point."
LanzaJet has several plant developments in the works including two projects in Japan, India's first SAF plant, Australia's first SAF plant, a plant in New Zealand and two in the U.K.
While Samartzis did not yet know where the next United States plant would be located, he expects to have an answer by the end of the year following feasibility studies, with the goal of being up and running in the next four years.
While LanzaJet's Georgia plant is "a small commercial" one, its next U.S. plant will be "significantly larger," according to Samartzis.
Several factors will determine where it will go, including where Southwest (NYSE: LUV) sees the most customers.
"The key here for us is going to be to balance the logistics to get them fuel to where they ideally want it, alongside access to the feedstock that makes the most sense and access to infrastructure. We're going to have to balance that to find the most ideal location," Samartzis said.
Incentives that each state offers will also be a factor.
"We are certainly going to explore opportunities that are here in the Midwest, including in Illinois," Samartzis said.
The agreement with Southwest Airlines will see LanzaJet collaborate with SAFFiRE Renewables LLC, a corn stover-to-ethanol technology company that Southwest has invested in previously, to help LanzaJet tap into developing ethanol from agriculture residue by converting SAFFiRE's cellulosic ethanol into SAF.
