Your industrial thesis depends on heavy industry continuing to emit. Steel mills and refineries are themselves decarbonizing upstream. Does your feedstock base shrink as they succeed, and is there a tension between your success and theirs?
We are what I would call a transition technology, and the reason I say that is because our technology works with a lot of different sources of carbon. Whether it comes from an industrial site like a steel mill, or municipal solid waste, or pure CO2, we can capture it.
If you think about how the steel sector talks about decarbonizing, they're talking about transitioning from coal-based blast furnaces, where we use the excess carbon and convert it into products, to something that uses hydrogen. Hydrogen steel means there's no carbon, but there will always be CO2. And if I have hydrogen, I can convert CO2. So, as they [steel manufacturers] transition their business, we transition with them. Near term, I can decarbonize their current business, and that matters because the perfect is always the enemy of the good.
We have this view that some magical unicorn is going to fly through the sky and we're going to wait 25 years for that solution. Our view is every carbon molecule that does not end up in the atmosphere is a win – we create jobs, valorize waste, and drive American innovation. We capture whatever we can now, and as they transition, we transition. We are not going to run out of business.
One of the main topics for this report is grid constraint. The industrial supercycle is being throttled by power availability. Does carbon fermentation ease grid pressure or add to it, and how does that shape where you site facilities?
Instead of sugar, we use carbon emissions, carbon oxides, and instead of yeast, we use bacteria. That distinction matters, because you're used to making wine and beer, where you ferment in a bag and walk away for days, weeks, months. Our bacteria can eat the gas very, very quickly. It's more like a refining unit where the chemistry happens in seconds. Gas in, product out. It's a continuous process, and by definition that is more efficient than conventional fermentation. We're at the beginning of our journey,--whereas other fermentations have been around for thousands of years-- but in principl,e a continuous process should be more efficient.
We also have to sit next to where the gas is. You don't want to move all these gases around because that takes a lot of energy. So we take our plant and put it right next to the unit emitting the gas. That siting logic is built into the model.
Jet fuel has been in the conversation these past few weeks. You spun off LanzaJet to commercialize SAF, but it remains more expensive than conventional jet fuel. Without a carbon price or mandate, what's an honest timeline to cost parity?
It depends on whether oil is at $180 a barrel or not, and let's assume we're not going to be at that level for too long. All technologies work their way down a cost curve, just like solar. It's not unreasonable to say that in the next five to ten years, the technology will be at parity, which we consider to be under$100 a barrel. The beauty of what we do is that we use waste carbon. Nobody is trading waste gas, so creating an economy around a feedstock that's less volatile has tremendous upside because the fluctuations are dampened and you have more certainty on value.
We have to have incentives and mandates now, because there is no question that a new technology will be more expensive than the incumbent. But the goal is not to have these incentives for the next hundred years. The goal is to get ourselves to profitability – create jobs, have our technology operating globally at scale – and work our way out of them. Incentives need to be larger at the beginning of the journey and then wash out. You can see it with wind and solar now. People are removing incentives and yet installations continue, because we're getting to the point where these things stand on their own.
Many of your mature deployments ran off Chinese steel mill emissions. Given the current geopolitical climate, how do you think about technology transfer risk, and is the model replicable in the US?
This is applicable globally. We can capture any carbon. But let me take a step back because we have to stop repeating the same mistakes. I'm quite old and have been working in this space my entire career. I started my PhD thesis in 1981, and I worked on how to convert coal to liquids via Fischer-Tropsch catalysis, because that was the first energy crisis and the news was full of people waiting in line at gas stations during the oil embargo. We do this over and over again. We get all these shocks and we never put our heads down and ask how we use carbon better. We talk about energy efficiency.
Nobody talks about carbon efficiency. We have to change that to create shorter, more resilient supply chains.
Do I worry about IP leakage? Absolutely. But what we really have to worry about is getting these things deployed and down the cost curve. In the United States, there's plenty of CO2 we can use from refineries and petrochemical complexes. The model works. The reason we started in China is that at the time they were very focused on new technologies that could help them decarbonize, and that R&D was important to them. They helped us with the first demo and the first commercial unit, but the engineering work largely happened in the U.S., and our core team was in New Zealand and then the U.S..
Your proprietary microorganism is your moat. How defensible is your position if a well-funded competitor or state actor tries to reverse engineer it?
Our technology has many proprietary elements. The bacteria, yes, but the bioreactor is also proprietary. Sugar is soluble in water, so when you have yeast it can find the sugar molecule and make ethanol. Carbon monoxide, carbon dioxide, and hydrogen are not soluble in water, so we had to create a bioreactor that gets enough bubbles to the organism. That engineering is essential.
The third piece is the media. You can't grow anything without nitrogen, sulfur, and minerals, so that it builds amino acids - just like human beings. We've spent a lot of time creating a proprietary cocktail in which the bacteria thrive. The secret sauce isn't a single secret sauce. It's all of these things working in concert. Yes, it can be reverse engineered, and we hope our lab keeps us ahead into the next generation, but it isn't trivial.
You went public in 2023 and the stock has faced pressure since. Does being public help or hurt when building long-cycle industrial infrastructure?
When we went public, we were in massive growth mode. We were building a platform, doing enormous R&D, trying to leverage the platform for chemicals and biomass production. We went public at exactly the moment the market started caring much more about profitability than platform-building. We got caught in the middle, in the market without being a company that could meet a quarterly earnings report.
Then came the headwinds around climate-related technology. We remain laser-focused on the benefits of our technology to create American jobs, drive energy security, and boost rural manufacturing. Single purpose is tough. Part of why we're now focusing on SAF is that it concentrates us on profitability rather than spreading across the full platform.
At scale, does your model meaningfully change the US energy supply picture, or is it always a niche contributor relative to the size of the challenge?
I hope we are not niche. The nice thing about this technology is it can leverage both solid and gaseous carbon waste. We turn solid into gas, and there's plenty of municipal solid waste. This is one area where the scale of the problem and the solution are actually matched. I'm not limited by feedstock. I'm not using corn, sugar, or fats, oils and greases –things in limited supply that compete with food.
To meet the challenge, we need to improve the cost equation so we can build larger units, otherwise it's a massive capital bill nobody wants to spend. But we can get there. Twenty years ago, nobody was building 10 megawatts. Now you don’t see anyone building anything smaller than that. It takes steps.
With AI infrastructure, electrification and reshoring, American industry is about to make enormous capital commitments. Are you positioned to catch the wave, or does the supercycle outrun what carbon recycling can deploy in time?
That's where the herd is going. We're not there, but what the herd is doing benefits us. Installing more and more power makes power cheaper, and I need power to run compressors and to make hydrogen if I want to convert CO2. The more they deploy, the more I ride that wave with cheap, clean power. The same goes for AI itself. When we do synthetic biology, we need to model and genetically modify our organisms, and you can't do that without computing power and predictive AI. The better those things get, the better we get.
What I want to create is distributed production. We can go to every small place where there's waste carbon and convert it. To do that, you don't want refinery-level equipment or refinery-level engineers in rural locations, so the ability to fully automate and use models to get that last 1% of carbon out is where we benefit. And when we make SAF, we also make diesel, which can run gensets and backup generators. All of those things are going to be required, and we can supply that market.
