LanzaTech looks to convert waste into green fuels, eyes export market

LanzaTech aims to transform agri residue and waste gases into ethanol and sustainable aviation fuel with partners Indian Oil and GAIL as India builds biofuel capacity

As crop burning season approaches in Punjab and Haryana, with winds carrying noxious fumes to Delhi, US-based LanzaTech is stepping in with technologies to convert waste and gaseous effluents into advanced biofuels such as ethanol and sustainable aviation fuel (SAF). It has tie-ups with Indian Oil Corporation (IOC), the country’s largest refiner, and GAIL India, the state-run natural gas distributor.

 

Advanced biofuel technologies can power India’s vision of becoming a leading producer and exporter of renewable fuels such as renewable diesel and SAF — premium-priced transport fuels derived from waste or industrial gases. These could enhance energy security if the government incentivises industry and sets mandates for their use, according to Satinder Pal Singh, managing director, LanzaTech India, and research from Deloitte.

 

“Long-awaited, reasonable policy around carbon tax and premium pricing for fuels generated from waste and other non-food, non-fossil sources are interventions that will create such market signals,” Singh said in an interaction with Business Standard. “Simultaneously raising costs for entities who do not take demonstrable action and incentivising those that do is important.” Aviation turbine fuel accounted for 2.5 per cent of global energy-related CO2 emissions in 2023, but airline emissions are harder to abate than ground transport.

 

Singh, an oil and gas veteran with 28 years at Shell and Adani TotalEnergies, is working with IOC to operationalise by year-end a 33 ktpa capacity “world’s first refinery off-gas cracker (ROGC) to 3G ethanol project” at Panipat refinery. Sister company LanzaJet is also working with IOC to build a SAF plant at Panipat based on its alcohol-to-jet (ATJ) technology with a 90 ktpa capacity. This will be India’s largest alcohol-to-jet SAF facility, Singh said. LanzaJet, co-founded by LanzaTech in 2020, is starting up the world’s first commercial-scale demonstration plant in Georgia, US.

 

With limited SAF blending mandates in India, exports to western nations are expected. The market for SAF and renewable biofuels has widened after Shell and BP scrapped large biofuel projects in Rotterdam. Deloitte estimates India could build 8–10 million tonnes of SAF capacity by 2040, far exceeding its projected domestic need of 0.8 million tonnes by 2030 at 5 per cent blending. This would attract Rs 6–7 trillion in capital investments. India could also add 3–4 million tonnes of renewable diesel capacity, Deloitte said, with global SAF demand projected at 18 million tonnes by 2050 to achieve net zero.

 

However, Singh cautioned that government intervention is needed. “Without forward pricing for 2G ethanol and easier access to credit for high-capex projects, the sector’s growth will remain constrained,” said Deepak Ballani, director general, Indian Sugar & Bio-energy Manufacturers Association. He added that the absence of long-term offtake agreements and export restrictions on ethanol also hinder growth.

 

The UK has committed over £215 million to low-carbon aviation fuel since 2021, with LanzaTech receiving £35 million, making it the largest recipient. In India, ethanol is classified as 1G when derived from food crops, 2G when from agri-residue, and 3G when from waste gases.

 

Singh said: “We see India as a manufacturing hub for our global projects. This has led us to partner with local engineering firms to adapt solutions for domestic and international markets. Some private equity firms have also shown interest in co-investing with us in India.”

 

Europe and the UK are valuable markets for India’s SAF because of blending mandates and limited domestic supply. Renewable SAF currently costs up to three times conventional jet fuel, which India exports to Europe. EU rules mandate only non-food feedstocks for SAF production, unlike ICAO guidelines, which permit agricultural crops.

 

LanzaTech’s strength lies in converting waste and industrial gases into fuels, aligned with EU rules. It is also working with GAIL India to valorise CO2. “While our technology is competitive, we need support in areas such as agri-residue and municipal solid waste through firm blending mandates,” Singh said. “As the ecosystem matures, this handholding should not be required beyond the first few projects.”