Shell Invests in Sustainable Aviation-Fuel Maker LanzaJet

(Bloomberg) --

Royal Dutch Shell Plc has invested in sustainable-fuels technology company LanzaJet, adding to a string of deals positioning the oil giant for the energy transition.

The Anglo-Dutch major didn’t disclose financial terms, but its expansion into clean energy has so far comprised small acquisitions, as well as organic growth. That contrasts with European peers Total SE and BP Plc, which have acquired billions of dollars’ worth of renewable assets.

LanzaJet is building an “alcohol-to-jet” facility in the U.S. state of Georgia, with capacity to produce 10 million gallons of sustainable aviation fuel, or SAF, a year from 2022. Its technology can use ethanol made from “recycled pollution” for jet fuel production, according to a statement. As much as 90% of its fuels can be produced as SAF, with the remaining 10% as renewable diesel.

For Shell, the LanzaJet deal adds to recent purchases of a virtual power plant operator and an electric vehicle charging network, and is one of several inroads into greener jet fuels, according to the company.

“It is part of a list of portfolio investments that we’re putting together to create a broader range of technology pathways for sustainable aviation fuels,” Anna Mascolo, president of Shell Aviation, said in an interview. “The critical piece for the industry is SAF at pace and SAF at scale.”

Cutting Carbon

Aviation has, so far, proved trickier to decarbonize than other methods of transport. While hydrogen has been touted as the future for long-haul trucks and electric vehicles are expected to replace the internal combustion engine, SAF accounts for less than 0.1% of global aviation fuel, according to the International Energy Agency.

“Aviation is a very difficult industry to decarbonize because you need high-energy, density fuels to be able to fly these planes long distances,” LanzaJet Chief Executive Officer Jimmy Samartzis said. While airlines have curbed some emissions by upgrading fleets and improving efficiency, “the bulk of it in the immediate to medium-term has to be SAF.”

LanzaJet was created last year by alternative-energy technology company LanzaTech Inc. It plans to develop four plants to produce sustainable jet fuel as well as renewable diesel. LanzaJet’s investors include Suncor Energy Inc. and Mitsui & Co. In February, it teamed up with British Airways, which will use some of LanzaJet’s ethanol-derived fuel starting late 2022.

In addition to its initial LanzaJet deal, Shell will be able to make further investments in the construction of new production facilities in the coming years, according to the statement.

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