Suncor bets on the future, invests in sustainable jet fuel

Suncor Energy has made an initial equity investment in a new U.s.-based company that aims to commercialize the production of sustainable jet fuel to help the aviation sector meet its climate targets.

The Calgary-based energy company has invested $15 million to help establish Lanzajet, an offshoot of Illinois-based biotech firm Lanzatech. The funding, alongside $10 million from Japanese trading and investment company Mitsui & Co. as well as participation from All Nippon Airways and the U.S. Department of Energy, will be used to build a demonstration plant in Soperton, Ga., that will produce 37.9 million litres a year of sustainable aviation fuel and renewable diesel.

Lanzatech, which has been around for 15 years and has 170 employees worldwide, calls itself a “carbon recycling” company. Its technology uses waste gases from steel mills, refineries and chemical plants and converts them through a bacterial process into a variety of other products, including ethanol. The creation of Lanzajet will see the company work toward the commercialization of an integrated biorefinery using waste gases to produce ethanol that can be blended into commercial jet fuel.

“We’re looking at early 2025 to have commercial plants running,” said Lanzatech CEO Jennifer Holmgren. “We need to be building as quickly as possible ... There are people who are making ethanol for jet fuel from other sources, and that’s great, but there’s only so much of that and the world uses 90 billion gallons of jet fuel a year. So we really need to build the supply chain, because the airlines are asking for it.”

Before the global aviation industry was crippled by COVID-19, it accounted for two per cent of global carbon emissions. The industry has stated its goal is to reach “carbon neutral” growth by 2020 and a 50 per cent decrease in carbon emissions by 2050.

Biofuels (which can be made from anything from palm oil to algae to waste gases like those used by Lanzatech) are seen by many as the industry’s best chance of reaching that goal. Unlike other sources of power, like solar or electric, they can use the same supply infrastructure as conventional jet fuel and don’t require the adaptation of aircraft or engines. According to the International Energy Agency, the first flight using blended biofuel took place in 2008. Since then, more than 150,000 flights worldwide have used biofuels.

Still, aviation biofuel production in 2018 was only about 15 million litres, less than 0.1 per cent of total aviation fuel consumption. To speed up the commercialization of the Lanzajet technology, both Suncor and Mitsui have committed to investing further in the construction of commercial production facilities after the demonstration plant meets all its technical and economic targets.

Suncor has also contracted to take a “significant” portion of the sustainable aviation fuel and renewable diesel produced by the plant for its own customers, said Jon Mitchell, Suncor’s vice-president of sustainability.

“We see lots of potential there,” Mitchell said. “I think that’s why we’re interested in getting involved in this demonstration commercial facility and then as things go well, seeing what type of market we’re able to build and grow.”

The Lanzajet announcement comes at a time when the global aviation industry is bleeding cash due to COVID-19 travel restrictions, and as the price of traditional jet fuel has fallen along with global oil prices. However, both Holmgren and Mitchell say the investment in sustainable aviation fuel is a bet on the future.

“There’s no doubt the aviation sector, as well as the oil and gas sector, have been hugely impacted by COVID, but we think that as we all start to recover from that, there still will be demand for sustainable jet fuel,” Mitchell said. “Our climate challenge isn’t going away.”

“I think everyone still sees the rationale for needing to do this,” Holmgren said. “I think many companies are saying, ‘Let’s use this time to invest in new technologies that need time to develop ... so that when we come out the other side we’ve got something to show for it.”