CEOs of Virgin Atlantic and LanzaTech Talk About the Bright Future of Recaptured Carbon as Fuel

Earlier this month, I was invited to dig into the weeds on Virgin Atlantic’s latest alternative fuel efforts and take the first flight using the new fuel developed by LanzaTech.  Unfortunately, I wasn’t able to go, but I was able to get Geoff Fischer to take the trip and report back.  Geoff has written here a couple times in the past.  Today, he starts with a look back on biofuels as well as an interview with the CEOs of both Virgin Atlantic and LanzaTech.

Disclosure: Virgin Atlantic paid for Geoff’s travel.

Over the last decade, there have been more experiments with alternative aviation fuels than Fast and Furious movies. Airlines have partnered with industrial, academic and governmental groups to develop fuels from waste vegetable oil, as well as plant-based oils from coconut and palm, and from the Jatropha and Camelina families. They’ve tried fuels made from algae, agricultural waste, municipal waste and even “forest residuals” (the stumps, branches and limbs left over after a timber harvest).

And all of these have actually taken to the skies. Collaboration between aircraft and engine manufacturers and the American Society for Testing and Materials (ASTM) validated their safety and effectiveness, and established standards for “drop-in” fuels. Alternative fuels that are ASTM qualified can be blended at ratios up to 50/50 with traditional jet fuel and fly without any engine or aircraft modification.

Surprisingly, it hasn’t been hard to find alternative fuels that work well and produce significantly lower levels of carbon dioxide, sulfur and other emissions than traditional kerosene. But what has been hard is to find alternative fuels that are also cost effective and sustainable at scale. (For example, Brett explained here in 2009 why algae was not a viable solution at that time.)

The aviation industry is said to produce 2 percent of the world’s CO2 emissions, but with thin margins and unceasing competitive and cost pressures, reducing that carbon footprint with alternative fuels isn’t happening anytime soon without subsidies of some kind. This is why despite great fanfare around the tests, alternative fuels do not yet have much ongoing industry usage.

KLM’s efforts are one of the exceptions that prove the rule. In 2016, they signed up corporate customers and other investors to help foot the bill for an ongoing three-year program in which all of their departures from LAX are powered by biofuel.

Virgin Atlantic has been another industry pioneer of sustainability practices in general and alternative fuels in particular, as Brett first wrote about here in 2007. They ran the first demonstration flight using a plant-based biofuel blend in one engine of a 747 in 2008. But that effort did not get traction, and in 2011 they partnered with US-based LanzaTech which was developing techniques to make fuel from the emissions of steel plants and other factories.

This “recaptured carbon” approach was appealing because no incremental resources had to be used to produce the fuel source, and in fact the waste gases were being saved from otherwise being released into the atmosphere. LanzaTech’s solution involves building a facility at the plant site that diverts the emissions and processes them into ethanol. Then in a second stage (often located elsewhere) the ethanol is converted into jet fuel.

The two companies claim that this solution, unlike many that have come before, is indeed scalable and commercially viable. Their math is that roughly two-thirds of the world’s steel mills are compatible with this process, and if rolled out globally it could supply up to 20% of global aviation fuel needs.

On the eve of the first commercial flight powered by this recaptured carbon fuel, I sat down with Craig Kreeger, CEO of Virgin Atlantic and Dr. Jennifer Holmgren, CEO of LanzaTech to learn more about their approach.

Geoff Fischer, Cranky Flier: This has been a seven year partnership effort. What would you say have been the biggest challenges, from a scientific and aviation point of view respectively, in this seven-year journey?

Dr. Jennifer Holmgren, CEO LanzaTech: When we started talking, it was a technology that we were developing. One of the challenges we had was scaling up. It took a lot of effort to scale it up and it took a lot longer [than expected]. And then when we were ready to do a demonstration flight, it turned out it was going to be difficult to do as a demonstration, and we decided to wait until the ASTM qualification and do it as a commercial flight. All of these things added difficulty because it got to a point where people were asking ‘Are you really going to do this or not?’ But I’m happy with where we are today.

Craig Kreeger, CEO Virgin Atlantic: I think of it more from a partnership point of view than an aviation point of view. We went all-in with LanzaTech pretty early, and there were times during the intervening period where fuel prices dropped a lot, and it became questionable whether or not this was going to be economically viable at scale, and whether it made sense to stay this course. We love the technology, love the company, love the source: waste carbon. The thing we overcame was our own doubts along the way. And today marks a real important milestone for us, in feeling like we were right to put all of our eggs in this basket. I think that was really the question for us – should we be diversifying what we were focusing on? We fell in love with this idea, with Jennifer and where she was headed, and it sustained us through some debate and questions.

Geoff: Is your relationship exclusive? Does LanzaTech have the ability to work with other carriers, and are you seeking to?

Jennifer: Yes, we are able to work with other carriers. But we have commitments to Virgin Atlantic including an offtake agreement which I am very happy with. But it’s not exclusive and I think it’s fair to say that neither Virgin nor LanzaTech believe that having something exclusive helps the industry.

Craig: Correct.

Geoff: Have you heard interest from your Joint Venture partners (Air France, Delta and KLM) or do you see having a role in encouraging them to participate?

Craig: The simple answer is that as we are still in the to-be-scaled and to-be-validated phase, most airlines are pursuing their own solutions. There isn’t going to be one solution to this problem. We want a proliferation of solutions that collectively make a gigantic difference. So Delta keeps me informed on the things they’re working on, we keep them informed of the things we’re working on, and I’m sure there will be best practices and opportunities for us to share in each others’ work. But at this point we are working independently and I think that’s actually good, because I think we need multiple options.

Geoff: Ultimately at scale, from an operational perspective, isn’t it most likely that one or two solutions will need to “win out” given constraints at airports and getting fuel into airplanes?

Craig: I don’t think so. I think the opposite is true.

Jennifer: I agree and I would add that’s the whole point of being ASTM qualified [as] a drop-in fuel up to a 50% blend. All of the other fuels are being certified in the same way. So that actually means the airports and airlines can use any of these fuels. That’s the point of what ASTM is trying to do…. They are trying to standardize, which helps prevent these fuels from being more expensive than they might already be, which is the last thing you’d want.

Geoff: A few questions about the fuel itself. Does your product have the benefits other biofuels have of reduced sulfur emissions? And are there any concerns around the freeze point?

Jennifer: It has no aromatics so it burns cleaner. It has no sulfur whatsoever. So it has all of the benefits that you would see in a synthetic paraffinic kerosene. And there is no freeze point issue. It exceeds Jet A and often Jet A1 freeze points. They’re actually kind of cool because they are great blending components. They can improve the overall properties of [the blended] fuel.

In Part 2, I will continue the discussion, explore the economics of scaling up this solution, and report on VS 16 from Orlando to London/Gatwick on October 2, the first commercial flight of recaptured carbon fuel.