AI transcript
0:00:18 Today’s show includes, among other things, directed evolution, rabbit poop, sustainable
0:00:21 aviation fuel, and polyester.
0:00:28 Let’s do it.
0:00:32 I’m Jacob Goldstein, and this is What’s Your Problem, the show where I talk to people
0:00:35 who are trying to make technological progress.
0:00:40 My guest today is Jennifer Holmgren, the CEO of Lanzatec.
0:00:41 Jennifer’s problem is this.
0:00:47 How do you take pollution from steel plant smokestacks, feed it to bacteria, and get
0:00:52 the bacteria to excrete ethanol?
0:00:53 Ethanol is a kind of alcohol.
0:00:56 It’s the kind of alcohol you drink.
0:01:02 And in addition to being made in the alcohol you drink, ethanol is made as a fuel additive.
0:01:06 In that context, it’s often made from corn, or sugarcane.
0:01:12 But expanding the footprint of industrial agriculture to grow, say, more corn for fuel
0:01:16 can mean more emissions and higher food prices.
0:01:18 Hence the idea behind Lanzatec.
0:01:24 Find a different source of ethanol, one that doesn’t require food crops.
0:01:29 Lanzatec was founded in 2005 by two scientists from New Zealand.
0:01:31 Jennifer Holmgren was not one of them.
0:01:36 She joined the company as CEO in 2010 when Lanzatec was moving from a sort of proof of
0:01:39 concept to scaling in the real world.
0:01:44 We started our conversation by talking about the scientific work that led to the company’s
0:01:46 creation.
0:01:56 So is it right that the first kind of insight or idea is that there is a bacteria that ideally,
0:02:02 theoretically, could turn pollution, carbon monoxide, into ethanol?
0:02:03 That’s right.
0:02:09 And the founders knew that this was possible because they knew that they were gas-eating
0:02:10 organisms.
0:02:14 And they were able to go to a library in Germany which stores organisms that are known in catalogue
0:02:19 and then say, “I want that one and that one and that one,” and bring it to their lab and
0:02:20 start using it.
0:02:23 So they were getting like vials of bacteria?
0:02:24 Yeah.
0:02:25 Yeah.
0:02:26 Absolutely.
0:02:28 And did they find one that worked?
0:02:29 Absolutely.
0:02:34 But they had to do a lot of optimization because it’s a bacteria that wants to make a different
0:02:38 molecule acetate and they wanted to make ethanol.
0:02:41 And so they had to do a lot of work to optimize the bacteria.
0:02:44 And they did it without using genetic methods.
0:02:49 They did it all by direct evolution, kind of like you put two orchids together to make
0:02:50 a third.
0:02:51 So let’s talk about that a little bit.
0:02:55 So what was the bacteria that they found?
0:02:57 It’s called C. aro.
0:03:04 So the long name is C. arothanogenum and we call it C. aro.
0:03:06 And it is an anaerobic.
0:03:12 You can only find it in places where there’s no oxygen, but it was around at the beginning
0:03:16 of the earth when there was no oxygen.
0:03:17 Oh, wow.
0:03:19 That was its glory days.
0:03:20 Exactly.
0:03:21 It’s glory days.
0:03:24 We like to say it’s our great, great, great, great, great grandfather.
0:03:25 Yeah.
0:03:26 Where does it hide?
0:03:29 Where does the microbe that doesn’t like oxygen hide today?
0:03:36 It’s been found in gut biome, like from rabbits.
0:03:39 It’s been found in…
0:03:41 Is it true that it’s in rabbit poop?
0:03:42 Well, yeah.
0:03:45 So I was trying to be more delicate and say, biome.
0:03:47 I’ll take rabbit poop.
0:03:48 Yeah, I’ll take rabbit poop.
0:03:50 Yeah, it’s found in rabbit poop.
0:03:53 So for all we know, it could be in our guts too, I don’t know.
0:03:56 But it’s definitely in rabbit poo.
0:03:58 It is in…
0:04:00 You can find it in vents, underwater sea vents.
0:04:03 You can find it in all of these places where…
0:04:04 And it’s…
0:04:07 That’s actually one of the neat things about this bacteria.
0:04:09 It is robust.
0:04:11 It’s strong.
0:04:16 And it doesn’t like oxygen, so oxygen will kill it, but it is something that allows you
0:04:19 to do industrial biotech.
0:04:29 So they find this very ancient bacterium, it’s robust, but it’s not evolved to make ethanol.
0:04:30 It’s not evolved to make what you want.
0:04:32 What’s it evolved to make?
0:04:35 It makes acetate as a primary product.
0:04:39 So yeah, they evolved it to make ethanol as the primary product.
0:04:46 So there is this sort of field of directed evolution that they’re using here.
0:04:47 Tell me about directed evolution.
0:04:50 It’s a relatively young field in this context.
0:04:52 What does it mean?
0:04:53 How do you do it?
0:05:01 Well, it means you’re putting stress on the bacteria and selecting colonies that are
0:05:03 making what you want it to make.
0:05:06 And if you want it to make ethanol, you select for those.
0:05:12 So eventually, through sort of applying selective pressure in this way, they get to a strain
0:05:17 of C-auto that loves to make ethanol.
0:05:18 Yep.
0:05:19 Okay.
0:05:20 Yep.
0:05:22 And that’s around the time you get to the company.
0:05:23 Is that right?
0:05:24 Yeah.
0:05:29 So there was still optimization to be done, and they had started doing a pilot at a steel
0:05:31 mill in New Zealand.
0:05:33 And so I knew the system worked.
0:05:38 I just didn’t know how scalable it was to commercial scale.
0:05:42 And by scalable, I don’t mean that you couldn’t build a big one, but that you could make money
0:05:45 from it building a big one.
0:05:47 That’s such a huge issue, right?
0:05:51 Like this idea of people call it techno economics.
0:05:57 There are a million clever ideas like this that are elegant and intellectually satisfying.
0:06:04 But in this big sort of commodity global scale world, the question is like, great, but can
0:06:09 you make it at a competitive price at scale, right?
0:06:12 So how do you start to answer that question?
0:06:18 Well, I think you need to start with what you think you can do.
0:06:22 And then you validate it as you go from lab to pilot to demo.
0:06:25 And then you ask yourself, what else do I need to do to make it economic?
0:06:31 And in our case, it’s a really great bioreactor.
0:06:35 It’s also water recycling and media.
0:06:37 If you don’t, you know, let me explain media.
0:06:41 So when you grow a plant, you need fertilizer, right?
0:06:44 Nitrogen, sulfur.
0:06:48 And so what we had to do was figure out how to feed it a minimum amount of nitrogen and
0:06:50 sulfur and vitamins.
0:06:55 All of these little things, energy use, all of these impact the cost.
0:07:01 And so in a lot of ways, I like to think of a techno economic analysis as a tool that
0:07:05 allows you to say, I got to optimize that because it’s too expensive.
0:07:10 So now you have factories in countries around the world.
0:07:13 You were to some degree, at least operating at scale.
0:07:16 I’m curious, what are what are a few things you had to learn to get here?
0:07:21 Well, I think a specific one is finding the right partners.
0:07:26 We ended up going to China because we were looking for a steel mill that we could work
0:07:29 with and 50% of the world steel was made in China.
0:07:31 They were also in growth mode.
0:07:37 They wanted to reduce their carbon intensity, but they wanted to use it as a license to
0:07:38 grow.
0:07:42 And so China was in the right mode to think about new technologies.
0:07:48 And so we were able to go there, find a partner who was interested in using our technology
0:07:50 and then demonstrating it.
0:07:54 We build 100,000 gallon a year facility.
0:08:01 And then we use that as a path to building basically a 15 million gallon a year facility.
0:08:04 And that’s what we have operating now.
0:08:11 We have six facilities, average size 30 to 50 million gallons a year.
0:08:17 Building each one produces 30 to 50 million gallons of ethanol.
0:08:23 So tell me about a couple of the things you learned going from the lab to tens of millions
0:08:24 of gallons a year.
0:08:27 What were a couple of things that didn’t work the first time that you had to figure
0:08:31 out sort of specifically?
0:08:37 The bacteria is robust, like I told you, but it also needs to be coddled a little bit sometimes.
0:08:41 And so you need to install some type of pretreatment.
0:08:47 And so learning how to pretreat cheaply was a very important learning.
0:08:53 When we went from doing a steel mill gas to a ferro alloy gas to a gas that’s made from
0:09:00 municipal solid waste from trash, you kind of handle the gas a little bit differently.
0:09:06 And so we had focused on our process and we had spent some time on the gas, but we really
0:09:09 learned, you know what, spend a little more time on the gas.
0:09:11 So that’s one thing we learned.
0:09:17 The second thing I think we learned, and something that’s obvious, right?
0:09:19 Building good relationships matters, right?
0:09:24 Nothing works the first time and having partners that are willing to be on the journey to improve
0:09:28 and optimize as you scale is important, right?
0:09:30 These units are not like a Christmas gift.
0:09:34 You open the box and voila, we’re running a capacity.
0:09:40 And so really, it’s about your partners and about their commitment to you, to the technology
0:09:43 and to getting to scale.
0:09:46 Let’s talk about just what it looks like.
0:09:53 So you said you have how many operating six in China and India?
0:09:54 And Europe.
0:09:59 We have one in Europe as well in Ghent in Belgium with our solar middle.
0:10:04 So in a somewhat abstracted way, just like basically, what is one of your facilities
0:10:05 look like?
0:10:08 Like maybe we should start at the smoke stack, right?
0:10:14 So there is what used to be pollution coming out of a smoke stack, and what happens?
0:10:15 You don’t let it go out.
0:10:18 You intercept it before it goes out.
0:10:21 You compress it and you put it into a reactor.
0:10:25 So there’s a gas and you particularly, you want carbon monoxide still?
0:10:26 Is that your input?
0:10:28 You want carbon monoxide.
0:10:32 You can also use carbon dioxide if you have hydrogen.
0:10:36 It depends on whether you have hydrogen or not, how well you can process carbon dioxide.
0:10:38 So let’s just focus on carbon monoxide.
0:10:40 That’s like sugar for our bacteria.
0:10:41 It’s like yum.
0:10:42 I’ll take that.
0:10:47 So then is the first thing you have to do, separate out the carbon monoxide from the
0:10:48 rest of the gases?
0:10:49 You don’t.
0:10:50 Okay.
0:10:56 So if you have a carbon monoxide, say 40% carbon monoxide stream in a bunch of other gases,
0:11:01 you can just pump that into your bioreactor and the bacteria will find the carbon monoxide
0:11:04 and it’ll just ignore all the other molecules floating around.
0:11:05 Okay.
0:11:06 So you pump that into the bioreactor.
0:11:08 What’s it look like inside the bioreactor?
0:11:09 What’s going on in there?
0:11:10 Yeah.
0:11:15 So imagine a bunch of bubbles and imagine you’ve got bacteria that are dividing, right?
0:11:16 They’re alive.
0:11:17 They’re dividing.
0:11:20 So it’s kind of a, not a clear liquid.
0:11:25 You’re seeing what look like little grape particles in there, but it’s just bacteria
0:11:26 floating about.
0:11:28 Gas bubbles come in.
0:11:30 That’s all you see.
0:11:33 And then on the back end, you see ethanol.
0:11:39 And in the bubbles in the tank, is that like a medium you have created that your bacteria
0:11:41 likes to live in?
0:11:42 That’s right.
0:11:43 That’s right.
0:11:44 They’re getting their vitamins.
0:11:45 They’re getting their minerals.
0:11:48 They’re getting their carbon source, that carbon monoxide.
0:11:51 And they’re floating about enjoying their day.
0:11:54 And you’re bubbling in the carbon monoxide the way like if there’s a fish tank, you just
0:11:56 bubble in the air.
0:11:57 Exactly.
0:12:00 So it, it’s continuous.
0:12:05 The process is constantly and the water is constantly moving around and so it’s not quite
0:12:11 like a fish tank, but it’s a great analogy and that works really well.
0:12:16 And the key, you said the bubbles like a fish tank, the key is to make those bubbles as
0:12:18 small as possible.
0:12:21 So it’s kind of faking out at the solution, right?
0:12:26 It’s like they’re dissolved, the amount of dissolved carbon monoxide getting to the
0:12:31 bacteria so that they can find it, eat it and poop out ethanol.
0:12:35 And how does the ethanol sort of come out of the tank?
0:12:37 The ethanol is with water.
0:12:43 And so we have to distill the ethanol out and then we take the water, which also has
0:12:49 media and other things and pump it back into the reactor so that we’re not wasting anything.
0:12:53 We’re, you know, we’re separating the bacteria, putting it back in the reactor, separating
0:12:56 the ethanol through distillation.
0:13:01 And then you just take the ethanol and clean it as much as you want for fuel grade to blend
0:13:02 with gasoline.
0:13:07 It doesn’t need to be that clean for putting it into cosmetics.
0:13:11 It needs to be really clean.
0:13:15 And who are you selling your ethanol to?
0:13:18 So most of the ethanol goes into blending with gasoline.
0:13:22 That’s what our partner in China is doing.
0:13:27 But what we do is we take a small amount of it right now when we’ve used it to do project
0:13:29 development or brand development.
0:13:34 So Cody, for example, uses our ethanol in some of their perfumes.
0:13:40 We’ve also converted it to polyester and on has made running apparel with the polyester
0:13:42 made from these recycled emissions.
0:13:45 Medbell has used it in cleaning products.
0:13:51 So we have quite a few partners that that you would recognize, H&M, Kraghoppers, they’ve
0:13:53 all used our polyester.
0:13:55 And it’s kind of neat, right?
0:14:00 Because if you stop and for a second think about this, you say, you know, this was going
0:14:01 to be pollution.
0:14:04 It was going to be greenhouse gases and particulates.
0:14:07 And instead I’m wearing it.
0:14:08 Yes.
0:14:10 And how’s the price?
0:14:16 So it’s more expensive than conventional polyester.
0:14:22 You would say it’s anywhere between 150 to 170 percent.
0:14:27 Fortunately, we have partners who are willing to pay more in the raw materials because the
0:14:32 raw material is not what impacts the price of the product.
0:14:33 Right.
0:14:36 They can pay significantly more for the polyester.
0:14:41 And it’s such a trivial percentage of the final cost of the good that it doesn’t move
0:14:42 the needle much.
0:14:47 Well, you know, I would have thought exactly the way you just said it.
0:14:50 But unfortunately what it does is it impacts their margins.
0:14:55 And in a world that’s obsessed with profit and margins, you have to give credit to our
0:15:02 partners for being able to say, I am going to make an investment in creating this, right?
0:15:08 Because their business leaders are not getting the margins that others are getting.
0:15:16 And so I think this is something I want to really hash out because I think we’re driven
0:15:19 to reduce our costs and to increase our profit.
0:15:23 And we’ve got these brave souls who are saying, well, I got to reduce carbon too.
0:15:26 And that’s important to us and to our future.
0:15:31 And I’m going to go against the trend and I’m not going to reduce my costs or increase
0:15:32 my profit.
0:15:33 I am going to do something good.
0:15:38 So REI, Kraghoppers, has a whole line of clothing with our stuff.
0:15:45 And they’re trying to help us get to a scale where we can reduce the costs so that maybe
0:15:48 someday they’ll get to the margins they need.
0:15:49 Yeah.
0:15:54 I mean, I feel like it’s great that these companies want to do this.
0:16:00 But to be meaningful at a global level, you need to get to a place where the ethanol you
0:16:06 sell is the same price as other ethanol.
0:16:10 And I’m curious what has to happen for you to get there.
0:16:11 Well, first of all, is that right?
0:16:12 Do you think of it the same way?
0:16:18 Are you trying to get to a place where your ethanol costs the same as corn ethanol or
0:16:20 any other ethanol?
0:16:23 Right now it’s actually pretty close to corn ethanol.
0:16:27 It’s just that it costs a lot more than ethylene, which is how polyester is made.
0:16:28 I see.
0:16:31 So for fuel, is the ethanol you make price competitive?
0:16:33 It is pretty equivalent, yeah.
0:16:38 The capital installed costs is much higher because they’ve optimized their capital for
0:16:43 years, well, hundreds of years, whereas we have not.
0:16:47 But once you get past the capital recovery, the costs are about the same.
0:16:50 So you’re saying you’re competing against depreciated assets.
0:16:52 They built factories a long time ago.
0:16:57 They don’t have to pay for the factories every month the way you do that kind of thing, that
0:16:58 kind of challenge.
0:16:59 That’s right.
0:17:00 That’s right.
0:17:02 But we’ll get there.
0:17:08 But you asked a more important question, and I guess, we are focused on keeping carbon
0:17:09 in the ground.
0:17:14 At the end of the day, this linear economy is not going to work, and we need to find
0:17:19 a way to reuse all carbon that’s already in circulation in our system, whether it’s municipal
0:17:23 solid waste, whether it’s industrial waste, whether it’s CO2 that’s in the atmosphere.
0:17:28 We’ve got to figure out how to use that as the resource from which everything is made.
0:17:30 So it’s great.
0:17:34 We need to reduce consumption, don’t get me wrong, but we have a whole lot of global
0:17:42 economies that are growing, and so how do we deliver to them what they need without pulling
0:17:44 more carbon out of the ground?
0:17:46 And that is what we focus on.
0:17:48 So the question is, are you cost competitive?
0:17:52 Well, there’s a lot of things that we can do that make us cost competitive when we get
0:17:56 to bigger scales and we deploy more units.
0:18:00 This is the beginning of the journey, the early days of the cell phone versus now.
0:18:05 And so what you’ve got to do is just build more and reduce costs, improve the technology,
0:18:06 reduce costs.
0:18:11 But the other thing that biology allows you to do is it allows you to skip steps that
0:18:14 you would naturally use in the petrochemical world.
0:18:24 So today to make polyester, I go from ethanol to ethylene to ethylene oxide to MEG to polyester.
0:18:30 Now what if I could go from the gas, not to ethanol, but to MEG?
0:18:34 Now I’ve put that whole supply chain inside my bacteria.
0:18:41 Now I can be competitive because I’m processing less and I’m doing it at room, you know, close
0:18:45 to room temperature, not like a thermo catalytic process.
0:18:50 So there is a day when I believe we’ll be competitive, but I think we’re always going
0:18:54 to have to ask ourselves the question, what are the externalities that go along with the
0:18:56 cost of the things we buy?
0:18:58 And I know that’s a delusional question.
0:19:02 Everybody’s like, well, we’ll just ignore all of those and get a lot of cheap stuff
0:19:07 made from fossil carbon, but are we going to carbon tax?
0:19:10 Do I have to be competitive with fossil?
0:19:13 Well, like a carbon tax would solve the externality problem, right?
0:19:18 The problem is when people use fossil fuel, they pollute and they impose a cost on the
0:19:21 world and that cost is not reflected in the price of the good.
0:19:25 And that is a market failure and you are competing against that market failure.
0:19:28 And I agree that a carbon tax is a good idea.
0:19:33 It hasn’t taken off politically in a broad way.
0:19:35 So that’s a challenge, right?
0:19:42 And like people being willing to pay a green premium seems limited by human nature at some
0:19:44 margin.
0:19:47 And that’s why I want you to applaud the people that are trying.
0:19:50 Fair enough.
0:19:55 In a minute, Howlonsitech is working on developing sustainable jet fuel.
0:20:12 Airplane emissions are a really hard problem to solve.
0:20:17 The physics of flight make it hard to create an economically sound electric plane, although
0:20:19 people are working on that.
0:20:22 People are working on hydrogen powered planes, but that’s also really hard.
0:20:25 That’s clearly going to take a long time.
0:20:31 So in the short to medium term, progress is more likely to come from what are known as
0:20:35 drop in sustainable aviation fuels.
0:20:41 As in you can just drop them into the currently used fuels without having to redesign the
0:20:42 whole plane.
0:20:47 And Jennifer Holmgren has been working on drop in sustainable fuels since before she
0:20:49 came to Lonsitech.
0:20:53 I’ve been working on sustainable aviation fuel from before there was such a thing as
0:20:56 a drop in sustainable aviation fuel.
0:21:00 So I worked on the first drop in fuels in my old job.
0:21:04 We did flight demos, Flight of the Green Hornet, all of that we showed that you could make
0:21:12 a hydrocarbon right biofuels until then were oxygenates ethanol biodiesel.
0:21:16 So we showed we could make a hydrocarbon that looked exactly like jet fuel.
0:21:17 And that was certified.
0:21:23 Those are the first drops that were certified for sustainable aviation fuel.
0:21:29 All of the fuel that’s made today that goes into an airplane that is not made from fossil
0:21:36 carbon is made with that type of a process that takes fats, oils, greases, and makes
0:21:39 them to sustainable aviation fuel.
0:21:44 The problem with that is how much if we go back to the same problem we started with,
0:21:51 how much of these biological feedstocks are there, the world uses 100 billion gallons of
0:21:56 aviation fuel today, you can’t do just food.
0:22:02 And so when I came to Lonsitech, I wanted to develop a route to aviation fuel from all
0:22:06 of this ethanol that you could make from all of these waste resources.
0:22:12 And that’s why we work Pacific Northwest National Lab to develop a route to take ethanol.
0:22:13 Any kind of ethanol doesn’t have to be ours.
0:22:19 Lots of other people know how to make ethanol to make sustainable aviation fuel.
0:22:23 When we got that certified for flight, we did the ASTM work.
0:22:27 We flew a flight with Virgin Atlantic from Orlando to Gatwick.
0:22:33 Commercial flight, by the way, that was kind of cool, 200 plus people on board, made from
0:22:37 recycled steel mill emissions.
0:22:41 We realized that what we needed to do was build a 10 million gallon a year facility,
0:22:46 a large commercial scale, mini commercial scale facility.
0:22:52 And so what we decided to do is to launch Lonsitech et cetera’s own entity and raise
0:22:59 cash into it so that we could build that plant and go really, really fast.
0:23:04 And so that plant is in Georgia, and it’s in Soaperton, Georgia, and it should be starting
0:23:07 up momentarily, I would say.
0:23:09 Like tomorrow?
0:23:11 What does momentarily mean?
0:23:16 And think of it in, it’s in the last stages of shakedown, say, within the next couple
0:23:18 of months kind of timeframe.
0:23:21 And what’s going to happen at that factory?
0:23:26 We’re going to take ethanol and we’re going to convert it to sustainable aviation fuel
0:23:32 using the Lonsitech et alcohol ethanol to sustainable aviation fuel, alcohol to jet
0:23:33 technology.
0:23:36 And does that fuel like a supplement?
0:23:38 Like how does that work?
0:23:41 Right now certification is for 50/50 blends.
0:23:47 You can only put it with kerosene 50/50.
0:23:55 And are you using the ethanol you make from pollution, from waste emissions at that plant?
0:24:01 No, because we decided that since what we needed to prove at commercial scale was the
0:24:06 sustainable aviation fuel technology, we could use any ethanol to do that.
0:24:10 We didn’t need to raise the capital to build both.
0:24:16 And so right now it can use our ethanol made from waste emissions, or it can use sugarcane
0:24:22 ethanol, corn ethanol, cellulosic, any ethanol that they can find.
0:24:27 That’s the first part of the journey is just to show that they can get that technology
0:24:29 to commercial scale.
0:24:33 And what ethanol, in fact, what is the source of the ethanol you’re going to use there?
0:24:38 The first ethanol will be sugarcane ethanol that’s been brought from Brazil.
0:24:42 And so what is the broader context for sustainable jet fuel right now?
0:24:44 Like, I know that’s a whole conversation.
0:24:48 Planes are very hard to decarbonize in many ways.
0:24:55 So give me the broader context for jet fuel and where your plant fits.
0:25:03 Well, you know, the world uses 100 billion gallons a year of aviation fuel that target
0:25:11 that the industry has set for itself is a minimum of 10 billion gallons by 2030 of sustainable
0:25:13 aviation fuel.
0:25:19 And today we’re in the hundreds, it’s, let’s say 100 million gallons.
0:25:20 Okay.
0:25:25 So it has to go up by a factor of 100 in a few years, if they’re going to make that
0:25:26 happen.
0:25:33 And just like a really dumb question, like, what makes sustainable aviation fuel sustainable?
0:25:37 Like, what does it mean to say sustainable aviation fuel?
0:25:38 What is that?
0:25:43 It just means it has a lower carbon footprint, but it doesn’t do it at the cost of a very
0:25:45 large water footprint or other things, right?
0:25:51 So the full life cycle analysis, the focus though is in greenhouse gas emissions and
0:25:54 a reduction in greenhouse gas emissions.
0:26:02 And is the basic idea that ethanol has lower greenhouse gas emissions than oil as a source
0:26:03 for jet fuel?
0:26:05 I mean, is that the very basic idea?
0:26:06 Yeah.
0:26:13 So the basic idea is take the ethanol to aviation fuel and compare that to fossil derived petroleum
0:26:15 derived aviation fuel.
0:26:19 That’s where you make the comparison, not at the petroleum, that’s a hard comparison to
0:26:20 make.
0:26:23 You make it at the product at what you’re going to put on the plane.
0:26:29 And so just tell me more about, you know, you’re building a sustainable jet fuel plant.
0:26:32 Like what is the broader industry like?
0:26:35 Are there different technologies at your plant?
0:26:37 Like, what, I don’t know anything about that side of the business.
0:26:39 Tell me something about it.
0:26:42 You know, you need to imagine a refinery, right?
0:26:44 That’s exactly what this looks like.
0:26:51 If you drive by our plant in in Soberton, you, it’ll be like you’re looking at a refinery.
0:26:58 A refinery that that is small because refineries actually take very dense liquid and convert
0:27:01 it to a bunch of different products through a bunch of unit operations.
0:27:04 We only have really compact unit operation.
0:27:05 It’s really three steps.
0:27:08 Takes the ethanol to ethylene.
0:27:09 Think of that.
0:27:15 Then take ethylene to sustainable aviation fuel in a two step process.
0:27:19 The ethanol to ethylene is done with our partner, TechMeep.
0:27:25 They have a technology that efficiently takes ethanol to ethylene and then we go from there.
0:27:38 And is the hope that you will use your Lanzatech ethanol as the input at this plant soon, eventually?
0:27:40 Sure.
0:27:41 We will use it at this plant.
0:27:44 But also one of the things we’re doing is building plants together.
0:27:49 We have projects across the world in Europe, in the Middle East where we’re taking waste
0:27:54 like municipal solid waste, taking it to ethanol and taking ethanol to SAF.
0:27:56 SAF is sustainable aviation fuel.
0:27:57 Yes.
0:27:58 Thank you for that.
0:27:59 Yeah.
0:28:00 Yeah.
0:28:04 And we call that circular, by the way, that joint offering because obviously it’s circular
0:28:10 carbon from waste to aviation fuel and it’s the joint Lanzatech Lanzatech.
0:28:12 So we do expect this plant.
0:28:15 We expect other plants to use our ethanol.
0:28:21 But moreover, we expect integrated solutions.
0:28:32 I feel like there’s this long history of people trying to use synthetic biology, biotechnology
0:28:34 to make fuel.
0:28:38 And it has been really hard for a long time and people talk about why it used to be a
0:28:43 bad idea or why people who aren’t making fuel talk about why fuel is not the right thing
0:28:44 to make.
0:28:46 Like, tell me about that history.
0:28:55 I mean, look, you’re trying to do something that’s been done in a specific way for over
0:28:58 120 years, right?
0:29:00 And so now you’re going to say, well, I’m going to do it in a new way.
0:29:03 And oh, by the way, it’s going to be cheaper, cleaner and better.
0:29:10 And it’s like, OK, let’s get a dose of realism here.
0:29:16 When you look at sustainable aviation fuel, I believe that the use of fat soils and lipids,
0:29:22 which is what is being done today, we’re seeing more and more plants being built.
0:29:26 So you’re starting to get to the, OK, this is the keeper part of the curve, just like
0:29:29 we did with solar, just like we did with cell phones.
0:29:32 The only problem is now you’ve got to get to a point where you’re going to be feedstock
0:29:33 limited.
0:29:36 And we just have to do the same thing with our technology and other technologies that
0:29:42 are out there, build enough, get to capacity, reduce costs and keep building.
0:29:45 And I think most people don’t think about technology that way.
0:29:50 They sort of expect it magically to show up without remembering.
0:29:56 I always used to laugh, you know, I remember in 2010, because I have these articles, you’d
0:30:03 see all of these publications, you know, solar is 10 years out and will always be 10 years
0:30:04 out.
0:30:06 Those were literally the headlines, right?
0:30:07 You’re nodding.
0:30:09 So I know you remember this.
0:30:12 But here we are, you can’t turn around without seeing a solar installation.
0:30:15 And every day we make it cheaper and better.
0:30:18 It’s cost competitive with fossil carbon power.
0:30:26 And I just think people need to realize new technologies take 20, 30 plus years to deploy
0:30:27 in a way that makes sense.
0:30:30 And our technology is completely disruptive.
0:30:34 Nobody had ever done this gas fermentation before.
0:30:39 So I think a 30 year cycle to get to where you’re economically viable and competitive
0:30:42 everywhere is not unreasonable.
0:30:43 We’ve been around for 20 years.
0:30:45 We know our technology works.
0:30:49 We de-risk the technology, we de-risk the market.
0:30:53 But now instead of deploying five at a time, we want to deploy 20 at a time.
0:30:57 So you’ve got to reduce the cost.
0:31:01 What do you think might go wrong?
0:31:07 Like what would be reasons you might not make it to where you want to get to?
0:31:13 Yeah, that’s a lovely question.
0:31:16 The hurdles are big, right?
0:31:20 You know, legislation stands against you.
0:31:23 Nobody had ever heard of us doing gas fermentation.
0:31:29 So corn and sugar cane ethanol get incentives in the United States that we don’t receive.
0:31:34 So it’s very hard to be competitive with something that’s getting an incentive.
0:31:35 I used the Tesla example.
0:31:39 Remember Tesla couldn’t sell in New Jersey because it didn’t have dealerships and there
0:31:45 were rules that actually block new ideas, new marketing methods, new sales method.
0:31:47 And that’s the same thing with what we do.
0:31:54 I also think there is this natural skepticism of anything new.
0:31:56 And we always try to find the problem with it.
0:32:01 And so for the first 30 years, 20 years, you’ve got to deal with people telling you what you’re
0:32:02 doing is wrong.
0:32:09 And nobody ever says, okay, what you’re doing may not work, but that’s okay because what
0:32:11 we’re doing isn’t working.
0:32:13 And so we need to replace it.
0:32:20 And so to me, what slows us down is people asking the wrong questions.
0:32:26 And I always say this is a sector where we need allies.
0:32:30 We need people saying they’re going to get there.
0:32:33 You need to push them along and to help them along.
0:32:41 And this is what we’re going to do to help these industries grow rather than not cost-effective,
0:32:43 not the same profit.
0:32:44 Not a good idea.
0:32:50 I mean, that negativism is draining.
0:32:54 Thank you for going down the road of the sad story.
0:32:56 Let’s talk about the happy story now.
0:32:58 Like, tell me the happy story.
0:33:01 What’s the happy story of the next 10 years?
0:33:03 Well, the happy story is very simple.
0:33:09 We have shown that you can take every type of waste carbon that’s already above ground
0:33:12 and make the products you use every day.
0:33:17 Sustainable aviation fuel, we decarbonize steel mills at the same time that we decarbonize
0:33:18 aviation, right?
0:33:21 And you can poo poo that all you want, but the fact is we’ve done it, we’ve shown it,
0:33:26 it works, and nobody can tell me that fresh fossil carbon is the future.
0:33:29 And I can tell you, let’s just keep that carbon in the ground.
0:33:32 So what do the next 10 years look like for us?
0:33:34 We’re going to keep showing you that.
0:33:39 We’re going to show you that food, fuel, and chemicals can all be made from waste carbon
0:33:41 that’s above ground.
0:33:47 And specifically, like, what are the sort of big, big projects in the kind of short to
0:33:48 medium term for you?
0:33:54 Well, I think some of our big projects, first of all, we’ve got to scale sustainable aviation
0:33:55 fuel.
0:34:02 And so showing our first plant and its economics is going to enable a bunch of other plants
0:34:03 to get built.
0:34:10 The other thing I want to show is integration, more and more to reduce cost.
0:34:18 What you don’t want is a unit that makes ethanol and a unit that makes aviation fuel next to
0:34:25 each other and not integrated, or a unit that makes hydrogen that we need to convert CO2
0:34:26 being a separate standalone.
0:34:30 The more we integrate, the cheaper things get, right?
0:34:36 And so to me, as we make our technology cheaper, I want to also show that integration with
0:34:41 others is cheaper and cheaper, and that’s where your economies come in.
0:34:48 And the final thing I want to do is just really show that biology needs to be thought of differently.
0:34:51 Petroleum is densest liquid known demand.
0:34:54 That’s why we’ve grown these massive centralized refineries.
0:35:03 What biology can do is use local resources, enabling a country to use its local feedstocks
0:35:08 and be able to make selectively the product it wants.
0:35:10 So do you want to make aviation fuel?
0:35:11 Great.
0:35:13 Do you want to make polyester?
0:35:14 Great.
0:35:24 And we want to do this and leverage the power of biology to enable economies to grow while
0:35:26 their population grows.
0:35:30 Because the biggest concern I have is if you’re a developing economy and you’re watching
0:35:36 your population grow, every time they buy something, a dollar goes out of the country,
0:35:39 so somebody else gets paid for the goods.
0:35:43 I want people to be able to grow and grow their economies and grow the jobs and grow
0:35:44 everything at the same time.
0:35:51 And I think biology, with its ability to be distributed and local, enables that.
0:35:55 And frankly, I don’t think anything else does.
0:36:00 And I want to show that over the next five to 10 years.
0:36:13 We’ll be back in a minute with the Lightning Round.
0:36:16 I want to finish with a Lightning Round.
0:36:17 Uh-oh.
0:36:18 Uh-oh.
0:36:22 Your dad, I have read, was an airline mechanic.
0:36:27 And I’m curious how his work influenced you.
0:36:34 He taught me how to fix things and to want to fix things and to care about aviation.
0:36:36 What was something you fixed with your dad?
0:36:37 Oh, everything.
0:36:40 I crawled around planes, although I never fixed anything.
0:36:45 I just crawled around with him on planes and cars and things, yeah.
0:36:46 That’s cool.
0:36:49 Um, what’s one thing I should do if I visit Colombia?
0:36:52 Oh, my gosh, eat the food.
0:36:56 Yeah, the food is amazing.
0:36:58 What’s one thing I should eat?
0:36:59 My favorite, Patacones.
0:37:02 I don’t know what Patacones are.
0:37:09 That’s plantains that are not ripe, so they’re green.
0:37:13 And you squish them and you fry them and you squish them again and you put salt on them.
0:37:17 It’s kind of like the French fries of Barranquilla, which is where I grew up.
0:37:21 Um, I understand that you went to the Paris Olympics.
0:37:22 Oh, yeah.
0:37:27 And, you know, obviously you work a lot with microbes, and so I’m curious, would you swim
0:37:28 in the sun?
0:37:29 No.
0:37:41 Um, tell me about the first greyhound that you rescued.
0:37:50 We rescued two dogs, two greyhounds that had badly broken their legs, and they had been
0:37:56 repaired by an agency, and then we adopted them.
0:38:04 I learned that 30% of greyhounds wash out because they’ve broken something or have been injured.
0:38:07 It’s a very sad, sad, sad thing.
0:38:14 And they are amazing dogs, amazing.
0:38:18 Jennifer Holmgren is the CEO of Lanzatec.
0:38:21 Today’s show was produced by Gabriel Hunter-Chang.
0:38:25 It was edited by Lydia Jean Cotte and engineered by Sarah Boubière.
0:38:29 You can email us at problem@pushkin.fm.
0:38:32 I’m Jacob Goldstein, and we’ll be back next week with another episode of What’s Your Problem?
0:38:34 [Music]
0:38:37 What’s Your Problem?
0:38:39 What’s Your Problem?
0:38:41 Call us at problem@pushkin.fm.
0:38:50 [BLANK_AUDIO]
0:00:21 aviation fuel, and polyester.
0:00:28 Let’s do it.
0:00:32 I’m Jacob Goldstein, and this is What’s Your Problem, the show where I talk to people
0:00:35 who are trying to make technological progress.
0:00:40 My guest today is Jennifer Holmgren, the CEO of Lanzatec.
0:00:41 Jennifer’s problem is this.
0:00:47 How do you take pollution from steel plant smokestacks, feed it to bacteria, and get
0:00:52 the bacteria to excrete ethanol?
0:00:53 Ethanol is a kind of alcohol.
0:00:56 It’s the kind of alcohol you drink.
0:01:02 And in addition to being made in the alcohol you drink, ethanol is made as a fuel additive.
0:01:06 In that context, it’s often made from corn, or sugarcane.
0:01:12 But expanding the footprint of industrial agriculture to grow, say, more corn for fuel
0:01:16 can mean more emissions and higher food prices.
0:01:18 Hence the idea behind Lanzatec.
0:01:24 Find a different source of ethanol, one that doesn’t require food crops.
0:01:29 Lanzatec was founded in 2005 by two scientists from New Zealand.
0:01:31 Jennifer Holmgren was not one of them.
0:01:36 She joined the company as CEO in 2010 when Lanzatec was moving from a sort of proof of
0:01:39 concept to scaling in the real world.
0:01:44 We started our conversation by talking about the scientific work that led to the company’s
0:01:46 creation.
0:01:56 So is it right that the first kind of insight or idea is that there is a bacteria that ideally,
0:02:02 theoretically, could turn pollution, carbon monoxide, into ethanol?
0:02:03 That’s right.
0:02:09 And the founders knew that this was possible because they knew that they were gas-eating
0:02:10 organisms.
0:02:14 And they were able to go to a library in Germany which stores organisms that are known in catalogue
0:02:19 and then say, “I want that one and that one and that one,” and bring it to their lab and
0:02:20 start using it.
0:02:23 So they were getting like vials of bacteria?
0:02:24 Yeah.
0:02:25 Yeah.
0:02:26 Absolutely.
0:02:28 And did they find one that worked?
0:02:29 Absolutely.
0:02:34 But they had to do a lot of optimization because it’s a bacteria that wants to make a different
0:02:38 molecule acetate and they wanted to make ethanol.
0:02:41 And so they had to do a lot of work to optimize the bacteria.
0:02:44 And they did it without using genetic methods.
0:02:49 They did it all by direct evolution, kind of like you put two orchids together to make
0:02:50 a third.
0:02:51 So let’s talk about that a little bit.
0:02:55 So what was the bacteria that they found?
0:02:57 It’s called C. aro.
0:03:04 So the long name is C. arothanogenum and we call it C. aro.
0:03:06 And it is an anaerobic.
0:03:12 You can only find it in places where there’s no oxygen, but it was around at the beginning
0:03:16 of the earth when there was no oxygen.
0:03:17 Oh, wow.
0:03:19 That was its glory days.
0:03:20 Exactly.
0:03:21 It’s glory days.
0:03:24 We like to say it’s our great, great, great, great, great grandfather.
0:03:25 Yeah.
0:03:26 Where does it hide?
0:03:29 Where does the microbe that doesn’t like oxygen hide today?
0:03:36 It’s been found in gut biome, like from rabbits.
0:03:39 It’s been found in…
0:03:41 Is it true that it’s in rabbit poop?
0:03:42 Well, yeah.
0:03:45 So I was trying to be more delicate and say, biome.
0:03:47 I’ll take rabbit poop.
0:03:48 Yeah, I’ll take rabbit poop.
0:03:50 Yeah, it’s found in rabbit poop.
0:03:53 So for all we know, it could be in our guts too, I don’t know.
0:03:56 But it’s definitely in rabbit poo.
0:03:58 It is in…
0:04:00 You can find it in vents, underwater sea vents.
0:04:03 You can find it in all of these places where…
0:04:04 And it’s…
0:04:07 That’s actually one of the neat things about this bacteria.
0:04:09 It is robust.
0:04:11 It’s strong.
0:04:16 And it doesn’t like oxygen, so oxygen will kill it, but it is something that allows you
0:04:19 to do industrial biotech.
0:04:29 So they find this very ancient bacterium, it’s robust, but it’s not evolved to make ethanol.
0:04:30 It’s not evolved to make what you want.
0:04:32 What’s it evolved to make?
0:04:35 It makes acetate as a primary product.
0:04:39 So yeah, they evolved it to make ethanol as the primary product.
0:04:46 So there is this sort of field of directed evolution that they’re using here.
0:04:47 Tell me about directed evolution.
0:04:50 It’s a relatively young field in this context.
0:04:52 What does it mean?
0:04:53 How do you do it?
0:05:01 Well, it means you’re putting stress on the bacteria and selecting colonies that are
0:05:03 making what you want it to make.
0:05:06 And if you want it to make ethanol, you select for those.
0:05:12 So eventually, through sort of applying selective pressure in this way, they get to a strain
0:05:17 of C-auto that loves to make ethanol.
0:05:18 Yep.
0:05:19 Okay.
0:05:20 Yep.
0:05:22 And that’s around the time you get to the company.
0:05:23 Is that right?
0:05:24 Yeah.
0:05:29 So there was still optimization to be done, and they had started doing a pilot at a steel
0:05:31 mill in New Zealand.
0:05:33 And so I knew the system worked.
0:05:38 I just didn’t know how scalable it was to commercial scale.
0:05:42 And by scalable, I don’t mean that you couldn’t build a big one, but that you could make money
0:05:45 from it building a big one.
0:05:47 That’s such a huge issue, right?
0:05:51 Like this idea of people call it techno economics.
0:05:57 There are a million clever ideas like this that are elegant and intellectually satisfying.
0:06:04 But in this big sort of commodity global scale world, the question is like, great, but can
0:06:09 you make it at a competitive price at scale, right?
0:06:12 So how do you start to answer that question?
0:06:18 Well, I think you need to start with what you think you can do.
0:06:22 And then you validate it as you go from lab to pilot to demo.
0:06:25 And then you ask yourself, what else do I need to do to make it economic?
0:06:31 And in our case, it’s a really great bioreactor.
0:06:35 It’s also water recycling and media.
0:06:37 If you don’t, you know, let me explain media.
0:06:41 So when you grow a plant, you need fertilizer, right?
0:06:44 Nitrogen, sulfur.
0:06:48 And so what we had to do was figure out how to feed it a minimum amount of nitrogen and
0:06:50 sulfur and vitamins.
0:06:55 All of these little things, energy use, all of these impact the cost.
0:07:01 And so in a lot of ways, I like to think of a techno economic analysis as a tool that
0:07:05 allows you to say, I got to optimize that because it’s too expensive.
0:07:10 So now you have factories in countries around the world.
0:07:13 You were to some degree, at least operating at scale.
0:07:16 I’m curious, what are what are a few things you had to learn to get here?
0:07:21 Well, I think a specific one is finding the right partners.
0:07:26 We ended up going to China because we were looking for a steel mill that we could work
0:07:29 with and 50% of the world steel was made in China.
0:07:31 They were also in growth mode.
0:07:37 They wanted to reduce their carbon intensity, but they wanted to use it as a license to
0:07:38 grow.
0:07:42 And so China was in the right mode to think about new technologies.
0:07:48 And so we were able to go there, find a partner who was interested in using our technology
0:07:50 and then demonstrating it.
0:07:54 We build 100,000 gallon a year facility.
0:08:01 And then we use that as a path to building basically a 15 million gallon a year facility.
0:08:04 And that’s what we have operating now.
0:08:11 We have six facilities, average size 30 to 50 million gallons a year.
0:08:17 Building each one produces 30 to 50 million gallons of ethanol.
0:08:23 So tell me about a couple of the things you learned going from the lab to tens of millions
0:08:24 of gallons a year.
0:08:27 What were a couple of things that didn’t work the first time that you had to figure
0:08:31 out sort of specifically?
0:08:37 The bacteria is robust, like I told you, but it also needs to be coddled a little bit sometimes.
0:08:41 And so you need to install some type of pretreatment.
0:08:47 And so learning how to pretreat cheaply was a very important learning.
0:08:53 When we went from doing a steel mill gas to a ferro alloy gas to a gas that’s made from
0:09:00 municipal solid waste from trash, you kind of handle the gas a little bit differently.
0:09:06 And so we had focused on our process and we had spent some time on the gas, but we really
0:09:09 learned, you know what, spend a little more time on the gas.
0:09:11 So that’s one thing we learned.
0:09:17 The second thing I think we learned, and something that’s obvious, right?
0:09:19 Building good relationships matters, right?
0:09:24 Nothing works the first time and having partners that are willing to be on the journey to improve
0:09:28 and optimize as you scale is important, right?
0:09:30 These units are not like a Christmas gift.
0:09:34 You open the box and voila, we’re running a capacity.
0:09:40 And so really, it’s about your partners and about their commitment to you, to the technology
0:09:43 and to getting to scale.
0:09:46 Let’s talk about just what it looks like.
0:09:53 So you said you have how many operating six in China and India?
0:09:54 And Europe.
0:09:59 We have one in Europe as well in Ghent in Belgium with our solar middle.
0:10:04 So in a somewhat abstracted way, just like basically, what is one of your facilities
0:10:05 look like?
0:10:08 Like maybe we should start at the smoke stack, right?
0:10:14 So there is what used to be pollution coming out of a smoke stack, and what happens?
0:10:15 You don’t let it go out.
0:10:18 You intercept it before it goes out.
0:10:21 You compress it and you put it into a reactor.
0:10:25 So there’s a gas and you particularly, you want carbon monoxide still?
0:10:26 Is that your input?
0:10:28 You want carbon monoxide.
0:10:32 You can also use carbon dioxide if you have hydrogen.
0:10:36 It depends on whether you have hydrogen or not, how well you can process carbon dioxide.
0:10:38 So let’s just focus on carbon monoxide.
0:10:40 That’s like sugar for our bacteria.
0:10:41 It’s like yum.
0:10:42 I’ll take that.
0:10:47 So then is the first thing you have to do, separate out the carbon monoxide from the
0:10:48 rest of the gases?
0:10:49 You don’t.
0:10:50 Okay.
0:10:56 So if you have a carbon monoxide, say 40% carbon monoxide stream in a bunch of other gases,
0:11:01 you can just pump that into your bioreactor and the bacteria will find the carbon monoxide
0:11:04 and it’ll just ignore all the other molecules floating around.
0:11:05 Okay.
0:11:06 So you pump that into the bioreactor.
0:11:08 What’s it look like inside the bioreactor?
0:11:09 What’s going on in there?
0:11:10 Yeah.
0:11:15 So imagine a bunch of bubbles and imagine you’ve got bacteria that are dividing, right?
0:11:16 They’re alive.
0:11:17 They’re dividing.
0:11:20 So it’s kind of a, not a clear liquid.
0:11:25 You’re seeing what look like little grape particles in there, but it’s just bacteria
0:11:26 floating about.
0:11:28 Gas bubbles come in.
0:11:30 That’s all you see.
0:11:33 And then on the back end, you see ethanol.
0:11:39 And in the bubbles in the tank, is that like a medium you have created that your bacteria
0:11:41 likes to live in?
0:11:42 That’s right.
0:11:43 That’s right.
0:11:44 They’re getting their vitamins.
0:11:45 They’re getting their minerals.
0:11:48 They’re getting their carbon source, that carbon monoxide.
0:11:51 And they’re floating about enjoying their day.
0:11:54 And you’re bubbling in the carbon monoxide the way like if there’s a fish tank, you just
0:11:56 bubble in the air.
0:11:57 Exactly.
0:12:00 So it, it’s continuous.
0:12:05 The process is constantly and the water is constantly moving around and so it’s not quite
0:12:11 like a fish tank, but it’s a great analogy and that works really well.
0:12:16 And the key, you said the bubbles like a fish tank, the key is to make those bubbles as
0:12:18 small as possible.
0:12:21 So it’s kind of faking out at the solution, right?
0:12:26 It’s like they’re dissolved, the amount of dissolved carbon monoxide getting to the
0:12:31 bacteria so that they can find it, eat it and poop out ethanol.
0:12:35 And how does the ethanol sort of come out of the tank?
0:12:37 The ethanol is with water.
0:12:43 And so we have to distill the ethanol out and then we take the water, which also has
0:12:49 media and other things and pump it back into the reactor so that we’re not wasting anything.
0:12:53 We’re, you know, we’re separating the bacteria, putting it back in the reactor, separating
0:12:56 the ethanol through distillation.
0:13:01 And then you just take the ethanol and clean it as much as you want for fuel grade to blend
0:13:02 with gasoline.
0:13:07 It doesn’t need to be that clean for putting it into cosmetics.
0:13:11 It needs to be really clean.
0:13:15 And who are you selling your ethanol to?
0:13:18 So most of the ethanol goes into blending with gasoline.
0:13:22 That’s what our partner in China is doing.
0:13:27 But what we do is we take a small amount of it right now when we’ve used it to do project
0:13:29 development or brand development.
0:13:34 So Cody, for example, uses our ethanol in some of their perfumes.
0:13:40 We’ve also converted it to polyester and on has made running apparel with the polyester
0:13:42 made from these recycled emissions.
0:13:45 Medbell has used it in cleaning products.
0:13:51 So we have quite a few partners that that you would recognize, H&M, Kraghoppers, they’ve
0:13:53 all used our polyester.
0:13:55 And it’s kind of neat, right?
0:14:00 Because if you stop and for a second think about this, you say, you know, this was going
0:14:01 to be pollution.
0:14:04 It was going to be greenhouse gases and particulates.
0:14:07 And instead I’m wearing it.
0:14:08 Yes.
0:14:10 And how’s the price?
0:14:16 So it’s more expensive than conventional polyester.
0:14:22 You would say it’s anywhere between 150 to 170 percent.
0:14:27 Fortunately, we have partners who are willing to pay more in the raw materials because the
0:14:32 raw material is not what impacts the price of the product.
0:14:33 Right.
0:14:36 They can pay significantly more for the polyester.
0:14:41 And it’s such a trivial percentage of the final cost of the good that it doesn’t move
0:14:42 the needle much.
0:14:47 Well, you know, I would have thought exactly the way you just said it.
0:14:50 But unfortunately what it does is it impacts their margins.
0:14:55 And in a world that’s obsessed with profit and margins, you have to give credit to our
0:15:02 partners for being able to say, I am going to make an investment in creating this, right?
0:15:08 Because their business leaders are not getting the margins that others are getting.
0:15:16 And so I think this is something I want to really hash out because I think we’re driven
0:15:19 to reduce our costs and to increase our profit.
0:15:23 And we’ve got these brave souls who are saying, well, I got to reduce carbon too.
0:15:26 And that’s important to us and to our future.
0:15:31 And I’m going to go against the trend and I’m not going to reduce my costs or increase
0:15:32 my profit.
0:15:33 I am going to do something good.
0:15:38 So REI, Kraghoppers, has a whole line of clothing with our stuff.
0:15:45 And they’re trying to help us get to a scale where we can reduce the costs so that maybe
0:15:48 someday they’ll get to the margins they need.
0:15:49 Yeah.
0:15:54 I mean, I feel like it’s great that these companies want to do this.
0:16:00 But to be meaningful at a global level, you need to get to a place where the ethanol you
0:16:06 sell is the same price as other ethanol.
0:16:10 And I’m curious what has to happen for you to get there.
0:16:11 Well, first of all, is that right?
0:16:12 Do you think of it the same way?
0:16:18 Are you trying to get to a place where your ethanol costs the same as corn ethanol or
0:16:20 any other ethanol?
0:16:23 Right now it’s actually pretty close to corn ethanol.
0:16:27 It’s just that it costs a lot more than ethylene, which is how polyester is made.
0:16:28 I see.
0:16:31 So for fuel, is the ethanol you make price competitive?
0:16:33 It is pretty equivalent, yeah.
0:16:38 The capital installed costs is much higher because they’ve optimized their capital for
0:16:43 years, well, hundreds of years, whereas we have not.
0:16:47 But once you get past the capital recovery, the costs are about the same.
0:16:50 So you’re saying you’re competing against depreciated assets.
0:16:52 They built factories a long time ago.
0:16:57 They don’t have to pay for the factories every month the way you do that kind of thing, that
0:16:58 kind of challenge.
0:16:59 That’s right.
0:17:00 That’s right.
0:17:02 But we’ll get there.
0:17:08 But you asked a more important question, and I guess, we are focused on keeping carbon
0:17:09 in the ground.
0:17:14 At the end of the day, this linear economy is not going to work, and we need to find
0:17:19 a way to reuse all carbon that’s already in circulation in our system, whether it’s municipal
0:17:23 solid waste, whether it’s industrial waste, whether it’s CO2 that’s in the atmosphere.
0:17:28 We’ve got to figure out how to use that as the resource from which everything is made.
0:17:30 So it’s great.
0:17:34 We need to reduce consumption, don’t get me wrong, but we have a whole lot of global
0:17:42 economies that are growing, and so how do we deliver to them what they need without pulling
0:17:44 more carbon out of the ground?
0:17:46 And that is what we focus on.
0:17:48 So the question is, are you cost competitive?
0:17:52 Well, there’s a lot of things that we can do that make us cost competitive when we get
0:17:56 to bigger scales and we deploy more units.
0:18:00 This is the beginning of the journey, the early days of the cell phone versus now.
0:18:05 And so what you’ve got to do is just build more and reduce costs, improve the technology,
0:18:06 reduce costs.
0:18:11 But the other thing that biology allows you to do is it allows you to skip steps that
0:18:14 you would naturally use in the petrochemical world.
0:18:24 So today to make polyester, I go from ethanol to ethylene to ethylene oxide to MEG to polyester.
0:18:30 Now what if I could go from the gas, not to ethanol, but to MEG?
0:18:34 Now I’ve put that whole supply chain inside my bacteria.
0:18:41 Now I can be competitive because I’m processing less and I’m doing it at room, you know, close
0:18:45 to room temperature, not like a thermo catalytic process.
0:18:50 So there is a day when I believe we’ll be competitive, but I think we’re always going
0:18:54 to have to ask ourselves the question, what are the externalities that go along with the
0:18:56 cost of the things we buy?
0:18:58 And I know that’s a delusional question.
0:19:02 Everybody’s like, well, we’ll just ignore all of those and get a lot of cheap stuff
0:19:07 made from fossil carbon, but are we going to carbon tax?
0:19:10 Do I have to be competitive with fossil?
0:19:13 Well, like a carbon tax would solve the externality problem, right?
0:19:18 The problem is when people use fossil fuel, they pollute and they impose a cost on the
0:19:21 world and that cost is not reflected in the price of the good.
0:19:25 And that is a market failure and you are competing against that market failure.
0:19:28 And I agree that a carbon tax is a good idea.
0:19:33 It hasn’t taken off politically in a broad way.
0:19:35 So that’s a challenge, right?
0:19:42 And like people being willing to pay a green premium seems limited by human nature at some
0:19:44 margin.
0:19:47 And that’s why I want you to applaud the people that are trying.
0:19:50 Fair enough.
0:19:55 In a minute, Howlonsitech is working on developing sustainable jet fuel.
0:20:12 Airplane emissions are a really hard problem to solve.
0:20:17 The physics of flight make it hard to create an economically sound electric plane, although
0:20:19 people are working on that.
0:20:22 People are working on hydrogen powered planes, but that’s also really hard.
0:20:25 That’s clearly going to take a long time.
0:20:31 So in the short to medium term, progress is more likely to come from what are known as
0:20:35 drop in sustainable aviation fuels.
0:20:41 As in you can just drop them into the currently used fuels without having to redesign the
0:20:42 whole plane.
0:20:47 And Jennifer Holmgren has been working on drop in sustainable fuels since before she
0:20:49 came to Lonsitech.
0:20:53 I’ve been working on sustainable aviation fuel from before there was such a thing as
0:20:56 a drop in sustainable aviation fuel.
0:21:00 So I worked on the first drop in fuels in my old job.
0:21:04 We did flight demos, Flight of the Green Hornet, all of that we showed that you could make
0:21:12 a hydrocarbon right biofuels until then were oxygenates ethanol biodiesel.
0:21:16 So we showed we could make a hydrocarbon that looked exactly like jet fuel.
0:21:17 And that was certified.
0:21:23 Those are the first drops that were certified for sustainable aviation fuel.
0:21:29 All of the fuel that’s made today that goes into an airplane that is not made from fossil
0:21:36 carbon is made with that type of a process that takes fats, oils, greases, and makes
0:21:39 them to sustainable aviation fuel.
0:21:44 The problem with that is how much if we go back to the same problem we started with,
0:21:51 how much of these biological feedstocks are there, the world uses 100 billion gallons of
0:21:56 aviation fuel today, you can’t do just food.
0:22:02 And so when I came to Lonsitech, I wanted to develop a route to aviation fuel from all
0:22:06 of this ethanol that you could make from all of these waste resources.
0:22:12 And that’s why we work Pacific Northwest National Lab to develop a route to take ethanol.
0:22:13 Any kind of ethanol doesn’t have to be ours.
0:22:19 Lots of other people know how to make ethanol to make sustainable aviation fuel.
0:22:23 When we got that certified for flight, we did the ASTM work.
0:22:27 We flew a flight with Virgin Atlantic from Orlando to Gatwick.
0:22:33 Commercial flight, by the way, that was kind of cool, 200 plus people on board, made from
0:22:37 recycled steel mill emissions.
0:22:41 We realized that what we needed to do was build a 10 million gallon a year facility,
0:22:46 a large commercial scale, mini commercial scale facility.
0:22:52 And so what we decided to do is to launch Lonsitech et cetera’s own entity and raise
0:22:59 cash into it so that we could build that plant and go really, really fast.
0:23:04 And so that plant is in Georgia, and it’s in Soaperton, Georgia, and it should be starting
0:23:07 up momentarily, I would say.
0:23:09 Like tomorrow?
0:23:11 What does momentarily mean?
0:23:16 And think of it in, it’s in the last stages of shakedown, say, within the next couple
0:23:18 of months kind of timeframe.
0:23:21 And what’s going to happen at that factory?
0:23:26 We’re going to take ethanol and we’re going to convert it to sustainable aviation fuel
0:23:32 using the Lonsitech et alcohol ethanol to sustainable aviation fuel, alcohol to jet
0:23:33 technology.
0:23:36 And does that fuel like a supplement?
0:23:38 Like how does that work?
0:23:41 Right now certification is for 50/50 blends.
0:23:47 You can only put it with kerosene 50/50.
0:23:55 And are you using the ethanol you make from pollution, from waste emissions at that plant?
0:24:01 No, because we decided that since what we needed to prove at commercial scale was the
0:24:06 sustainable aviation fuel technology, we could use any ethanol to do that.
0:24:10 We didn’t need to raise the capital to build both.
0:24:16 And so right now it can use our ethanol made from waste emissions, or it can use sugarcane
0:24:22 ethanol, corn ethanol, cellulosic, any ethanol that they can find.
0:24:27 That’s the first part of the journey is just to show that they can get that technology
0:24:29 to commercial scale.
0:24:33 And what ethanol, in fact, what is the source of the ethanol you’re going to use there?
0:24:38 The first ethanol will be sugarcane ethanol that’s been brought from Brazil.
0:24:42 And so what is the broader context for sustainable jet fuel right now?
0:24:44 Like, I know that’s a whole conversation.
0:24:48 Planes are very hard to decarbonize in many ways.
0:24:55 So give me the broader context for jet fuel and where your plant fits.
0:25:03 Well, you know, the world uses 100 billion gallons a year of aviation fuel that target
0:25:11 that the industry has set for itself is a minimum of 10 billion gallons by 2030 of sustainable
0:25:13 aviation fuel.
0:25:19 And today we’re in the hundreds, it’s, let’s say 100 million gallons.
0:25:20 Okay.
0:25:25 So it has to go up by a factor of 100 in a few years, if they’re going to make that
0:25:26 happen.
0:25:33 And just like a really dumb question, like, what makes sustainable aviation fuel sustainable?
0:25:37 Like, what does it mean to say sustainable aviation fuel?
0:25:38 What is that?
0:25:43 It just means it has a lower carbon footprint, but it doesn’t do it at the cost of a very
0:25:45 large water footprint or other things, right?
0:25:51 So the full life cycle analysis, the focus though is in greenhouse gas emissions and
0:25:54 a reduction in greenhouse gas emissions.
0:26:02 And is the basic idea that ethanol has lower greenhouse gas emissions than oil as a source
0:26:03 for jet fuel?
0:26:05 I mean, is that the very basic idea?
0:26:06 Yeah.
0:26:13 So the basic idea is take the ethanol to aviation fuel and compare that to fossil derived petroleum
0:26:15 derived aviation fuel.
0:26:19 That’s where you make the comparison, not at the petroleum, that’s a hard comparison to
0:26:20 make.
0:26:23 You make it at the product at what you’re going to put on the plane.
0:26:29 And so just tell me more about, you know, you’re building a sustainable jet fuel plant.
0:26:32 Like what is the broader industry like?
0:26:35 Are there different technologies at your plant?
0:26:37 Like, what, I don’t know anything about that side of the business.
0:26:39 Tell me something about it.
0:26:42 You know, you need to imagine a refinery, right?
0:26:44 That’s exactly what this looks like.
0:26:51 If you drive by our plant in in Soberton, you, it’ll be like you’re looking at a refinery.
0:26:58 A refinery that that is small because refineries actually take very dense liquid and convert
0:27:01 it to a bunch of different products through a bunch of unit operations.
0:27:04 We only have really compact unit operation.
0:27:05 It’s really three steps.
0:27:08 Takes the ethanol to ethylene.
0:27:09 Think of that.
0:27:15 Then take ethylene to sustainable aviation fuel in a two step process.
0:27:19 The ethanol to ethylene is done with our partner, TechMeep.
0:27:25 They have a technology that efficiently takes ethanol to ethylene and then we go from there.
0:27:38 And is the hope that you will use your Lanzatech ethanol as the input at this plant soon, eventually?
0:27:40 Sure.
0:27:41 We will use it at this plant.
0:27:44 But also one of the things we’re doing is building plants together.
0:27:49 We have projects across the world in Europe, in the Middle East where we’re taking waste
0:27:54 like municipal solid waste, taking it to ethanol and taking ethanol to SAF.
0:27:56 SAF is sustainable aviation fuel.
0:27:57 Yes.
0:27:58 Thank you for that.
0:27:59 Yeah.
0:28:00 Yeah.
0:28:04 And we call that circular, by the way, that joint offering because obviously it’s circular
0:28:10 carbon from waste to aviation fuel and it’s the joint Lanzatech Lanzatech.
0:28:12 So we do expect this plant.
0:28:15 We expect other plants to use our ethanol.
0:28:21 But moreover, we expect integrated solutions.
0:28:32 I feel like there’s this long history of people trying to use synthetic biology, biotechnology
0:28:34 to make fuel.
0:28:38 And it has been really hard for a long time and people talk about why it used to be a
0:28:43 bad idea or why people who aren’t making fuel talk about why fuel is not the right thing
0:28:44 to make.
0:28:46 Like, tell me about that history.
0:28:55 I mean, look, you’re trying to do something that’s been done in a specific way for over
0:28:58 120 years, right?
0:29:00 And so now you’re going to say, well, I’m going to do it in a new way.
0:29:03 And oh, by the way, it’s going to be cheaper, cleaner and better.
0:29:10 And it’s like, OK, let’s get a dose of realism here.
0:29:16 When you look at sustainable aviation fuel, I believe that the use of fat soils and lipids,
0:29:22 which is what is being done today, we’re seeing more and more plants being built.
0:29:26 So you’re starting to get to the, OK, this is the keeper part of the curve, just like
0:29:29 we did with solar, just like we did with cell phones.
0:29:32 The only problem is now you’ve got to get to a point where you’re going to be feedstock
0:29:33 limited.
0:29:36 And we just have to do the same thing with our technology and other technologies that
0:29:42 are out there, build enough, get to capacity, reduce costs and keep building.
0:29:45 And I think most people don’t think about technology that way.
0:29:50 They sort of expect it magically to show up without remembering.
0:29:56 I always used to laugh, you know, I remember in 2010, because I have these articles, you’d
0:30:03 see all of these publications, you know, solar is 10 years out and will always be 10 years
0:30:04 out.
0:30:06 Those were literally the headlines, right?
0:30:07 You’re nodding.
0:30:09 So I know you remember this.
0:30:12 But here we are, you can’t turn around without seeing a solar installation.
0:30:15 And every day we make it cheaper and better.
0:30:18 It’s cost competitive with fossil carbon power.
0:30:26 And I just think people need to realize new technologies take 20, 30 plus years to deploy
0:30:27 in a way that makes sense.
0:30:30 And our technology is completely disruptive.
0:30:34 Nobody had ever done this gas fermentation before.
0:30:39 So I think a 30 year cycle to get to where you’re economically viable and competitive
0:30:42 everywhere is not unreasonable.
0:30:43 We’ve been around for 20 years.
0:30:45 We know our technology works.
0:30:49 We de-risk the technology, we de-risk the market.
0:30:53 But now instead of deploying five at a time, we want to deploy 20 at a time.
0:30:57 So you’ve got to reduce the cost.
0:31:01 What do you think might go wrong?
0:31:07 Like what would be reasons you might not make it to where you want to get to?
0:31:13 Yeah, that’s a lovely question.
0:31:16 The hurdles are big, right?
0:31:20 You know, legislation stands against you.
0:31:23 Nobody had ever heard of us doing gas fermentation.
0:31:29 So corn and sugar cane ethanol get incentives in the United States that we don’t receive.
0:31:34 So it’s very hard to be competitive with something that’s getting an incentive.
0:31:35 I used the Tesla example.
0:31:39 Remember Tesla couldn’t sell in New Jersey because it didn’t have dealerships and there
0:31:45 were rules that actually block new ideas, new marketing methods, new sales method.
0:31:47 And that’s the same thing with what we do.
0:31:54 I also think there is this natural skepticism of anything new.
0:31:56 And we always try to find the problem with it.
0:32:01 And so for the first 30 years, 20 years, you’ve got to deal with people telling you what you’re
0:32:02 doing is wrong.
0:32:09 And nobody ever says, okay, what you’re doing may not work, but that’s okay because what
0:32:11 we’re doing isn’t working.
0:32:13 And so we need to replace it.
0:32:20 And so to me, what slows us down is people asking the wrong questions.
0:32:26 And I always say this is a sector where we need allies.
0:32:30 We need people saying they’re going to get there.
0:32:33 You need to push them along and to help them along.
0:32:41 And this is what we’re going to do to help these industries grow rather than not cost-effective,
0:32:43 not the same profit.
0:32:44 Not a good idea.
0:32:50 I mean, that negativism is draining.
0:32:54 Thank you for going down the road of the sad story.
0:32:56 Let’s talk about the happy story now.
0:32:58 Like, tell me the happy story.
0:33:01 What’s the happy story of the next 10 years?
0:33:03 Well, the happy story is very simple.
0:33:09 We have shown that you can take every type of waste carbon that’s already above ground
0:33:12 and make the products you use every day.
0:33:17 Sustainable aviation fuel, we decarbonize steel mills at the same time that we decarbonize
0:33:18 aviation, right?
0:33:21 And you can poo poo that all you want, but the fact is we’ve done it, we’ve shown it,
0:33:26 it works, and nobody can tell me that fresh fossil carbon is the future.
0:33:29 And I can tell you, let’s just keep that carbon in the ground.
0:33:32 So what do the next 10 years look like for us?
0:33:34 We’re going to keep showing you that.
0:33:39 We’re going to show you that food, fuel, and chemicals can all be made from waste carbon
0:33:41 that’s above ground.
0:33:47 And specifically, like, what are the sort of big, big projects in the kind of short to
0:33:48 medium term for you?
0:33:54 Well, I think some of our big projects, first of all, we’ve got to scale sustainable aviation
0:33:55 fuel.
0:34:02 And so showing our first plant and its economics is going to enable a bunch of other plants
0:34:03 to get built.
0:34:10 The other thing I want to show is integration, more and more to reduce cost.
0:34:18 What you don’t want is a unit that makes ethanol and a unit that makes aviation fuel next to
0:34:25 each other and not integrated, or a unit that makes hydrogen that we need to convert CO2
0:34:26 being a separate standalone.
0:34:30 The more we integrate, the cheaper things get, right?
0:34:36 And so to me, as we make our technology cheaper, I want to also show that integration with
0:34:41 others is cheaper and cheaper, and that’s where your economies come in.
0:34:48 And the final thing I want to do is just really show that biology needs to be thought of differently.
0:34:51 Petroleum is densest liquid known demand.
0:34:54 That’s why we’ve grown these massive centralized refineries.
0:35:03 What biology can do is use local resources, enabling a country to use its local feedstocks
0:35:08 and be able to make selectively the product it wants.
0:35:10 So do you want to make aviation fuel?
0:35:11 Great.
0:35:13 Do you want to make polyester?
0:35:14 Great.
0:35:24 And we want to do this and leverage the power of biology to enable economies to grow while
0:35:26 their population grows.
0:35:30 Because the biggest concern I have is if you’re a developing economy and you’re watching
0:35:36 your population grow, every time they buy something, a dollar goes out of the country,
0:35:39 so somebody else gets paid for the goods.
0:35:43 I want people to be able to grow and grow their economies and grow the jobs and grow
0:35:44 everything at the same time.
0:35:51 And I think biology, with its ability to be distributed and local, enables that.
0:35:55 And frankly, I don’t think anything else does.
0:36:00 And I want to show that over the next five to 10 years.
0:36:13 We’ll be back in a minute with the Lightning Round.
0:36:16 I want to finish with a Lightning Round.
0:36:17 Uh-oh.
0:36:18 Uh-oh.
0:36:22 Your dad, I have read, was an airline mechanic.
0:36:27 And I’m curious how his work influenced you.
0:36:34 He taught me how to fix things and to want to fix things and to care about aviation.
0:36:36 What was something you fixed with your dad?
0:36:37 Oh, everything.
0:36:40 I crawled around planes, although I never fixed anything.
0:36:45 I just crawled around with him on planes and cars and things, yeah.
0:36:46 That’s cool.
0:36:49 Um, what’s one thing I should do if I visit Colombia?
0:36:52 Oh, my gosh, eat the food.
0:36:56 Yeah, the food is amazing.
0:36:58 What’s one thing I should eat?
0:36:59 My favorite, Patacones.
0:37:02 I don’t know what Patacones are.
0:37:09 That’s plantains that are not ripe, so they’re green.
0:37:13 And you squish them and you fry them and you squish them again and you put salt on them.
0:37:17 It’s kind of like the French fries of Barranquilla, which is where I grew up.
0:37:21 Um, I understand that you went to the Paris Olympics.
0:37:22 Oh, yeah.
0:37:27 And, you know, obviously you work a lot with microbes, and so I’m curious, would you swim
0:37:28 in the sun?
0:37:29 No.
0:37:41 Um, tell me about the first greyhound that you rescued.
0:37:50 We rescued two dogs, two greyhounds that had badly broken their legs, and they had been
0:37:56 repaired by an agency, and then we adopted them.
0:38:04 I learned that 30% of greyhounds wash out because they’ve broken something or have been injured.
0:38:07 It’s a very sad, sad, sad thing.
0:38:14 And they are amazing dogs, amazing.
0:38:18 Jennifer Holmgren is the CEO of Lanzatec.
0:38:21 Today’s show was produced by Gabriel Hunter-Chang.
0:38:25 It was edited by Lydia Jean Cotte and engineered by Sarah Boubière.
0:38:29 You can email us at problem@pushkin.fm.
0:38:32 I’m Jacob Goldstein, and we’ll be back next week with another episode of What’s Your Problem?
0:38:34 [Music]
0:38:37 What’s Your Problem?
0:38:39 What’s Your Problem?
0:38:41 Call us at problem@pushkin.fm.
0:38:50 [BLANK_AUDIO]
Jennifer Holmgren is the CEO of LanzaTech. Her problem is this: How do you capture pollution from factories, feed it to bacteria, and get the bacteria to produce ethanol, which can become everything from polyester to jet fuel?
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