Sustainable Aviation Fuel: Part 4
Emerging startups and trends
Sustainable aviation fuel is becoming a reality, with the help of government incentives like the Inflation Reduction Act and using technologies that already exist. As we’ve seen in this blog series, however, large-scale adoption of SAF will require two things: abundant, cheap clean energy and highly efficient processes and catalysts to synthesize fuel. What it takes to get cheap clean energy is beyond the scope of our investigation, but over the past few months, we’ve had the opportunity to survey the synthetic fuel landscape and speak with some startups developing enabling technologies.
Based on the early-stage startups we had the chance to speak with, two areas stood out as particularly impactful for innovation: producing syngas and producing methanol. In this concluding post to our SAF blog series, we’ll share our findings in these two areas, as well as questions investors should consider when evaluating emerging SAF startups and technologies.
Improving syngas production for PtL
Syngas is the mixture of hydrogen (H2) and carbon monoxide (CO) used to produce liquid fuel (e.g. in a Fischer-Tropsch reactor). In a Power-to-Liquid (PtL) process, the hydrogen can be produced by the electrolysis of water. The bigger challenge is synthesizing CO, which is not easy to do efficiently.
The standard approach is the reverse water gas shift (RWGS), in which H2 and CO2 react to produce CO and water. This is a temperature-dependent, reversible reaction, and high temperatures are needed to convert more CO2 into CO. Even at 600°C, it is common for less than half of the CO2 to be converted to CO in a RWGS reactor. As a result, a SAF production process would also need to incorporate a CO2 separation unit, to recycle CO2 in the output stream and effectively run multiple passes through the RWGS reactor. This is a major source of inefficiency in a PtL process.
We spoke with Lydian Labs, a startup developing a more efficient RWGS reactor. Their reactor is resistively heated based on a novel catalyst material, enabling rapid and highly uniform heating to temperatures of ~1000°C in a matter of minutes. Lydian Labs believes they can achieve among the most efficient total energy consumption for the CO production step, and with a level of conversion that would allow direct pass into a Fischer-Tropsch reactor (less than ~20% unreacted CO2). And even as competing technologies like CO2 electrolyzers become more efficient, they expect the low CapEx cost of their catalyst to be a sustained advantage.
Direct electrolysis of CO2 is an alternative to RWGS that can consolidate syngas production to a single step, reducing capital and operational costs. Although an emerging tech, CO2 electrolyzers employ the same technologies seen in green hydrogen tech — aqueous alkaline, polymer membrane, or solid-oxide electrolyzer cells (SOEC) — and can usually function to co-produce hydrogen as well. Of the types of electrolyzers, SOECs are understood to have the potential for the highest energy efficiency. The drawbacks to SOECs are the capital costs and the need to operate at high temperatures, given that the ceramic electrodes do not hold up well to frequent cooling and re-heating. As a result, SOECs may be disadvantaged to use with intermittent energy sources, such as many renewables.
SeeO2 is one startup developing an SOEC that can produce CO and/or syngas. In the absence of water, they can convert CO2 to CO with high efficiency, which should allow it to beat even the best H2 electrolysis followed by RWGS. Using CO2 and water as co-inputs, they can produce syngas directly, with control over the H2:CO ratio. Beyond SAF, it’s worth noting that carbon monoxide has its own established markets in the polymer (polyurethane) and steel manufacturing industries as well. Some efforts to decarbonize steel production have focused on new systems which use H2 rather than coke (i.e. coal), but SeeO2’s technology could use CO as a near drop-in with current infrastructure, and with as good or even better efficiency than H2.
We also spoke with OMC, a startup taking a different approach to produce H2 and syngas. OMC’s thermochemical reactor can convert water to H2 or water & CO2 to syngas using heat energy rather than electricity. The heat could be generated from electrical heating, but it could also come from sources like solar heating or waste heat from industrial processes such as steel manufacturing. This creates the possibility for total energy efficiencies exceeding what could be achieved by electrolysis.
OMC’s reactor also uses simple, cheap materials (metal oxides) and is easier to scale to large volumes compared to electrolysis cells. Because electrolysis relies on the surfaces of electrodes, scaling to larger production capacities entails stacking many electrolysis modules, which means a linear correlation between capital costs and scale. This doesn’t leverage the economies of scale that are possible for a fluidized bed reactor like that used by OMC.
Methanol as a precursor and as a fuel
We’ve been focused on SAF, but much of the technology to produce SAF is part of an ecosystem of approaches enabling the synthesis of other renewable fuels and chemicals. One such product that is catching increasing attention is methanol. Methanol can be converted into SAF through a multi-step process that uses similar catalysts as other alcohol-to-jet processes. A related (in fact, older) process by ExxonMobil can convert methanol into gasoline as well, and the startup P1 Performance Fuels is commercializing an improved methanol-to-gasoline process that outputs truly drop-in gasoline. Dimethyl ether, a gaseous intermediate in the methanol-to-jet conversion, could itself serve as a replacement for residential propane. Oberon Fuels is commercializing its production from renewable biogas. Finally, methanol is of interest as a liquid fuel in its own right, especially for the shipping industry.
Just as diverse as the uses for methanol are the technologies emerging to produce it. Methanol can be synthesized from syngas (similar to, but using a different catalyst than Fischer-Tropsch), but newer approaches allow the synthesis of methanol directly from H2 and CO2, with greater efficiency. Germany-based ICODOS is taking this a step further by integrating aspects of the methanol production process with the CO2 separation and capture from waste gases. The methanol/water output also functions as a solvent for CO2 absorption, for example, while the input H2 stream facilitates CO2 desorption. The integration allows nearly 100% utilization of the CO2. Oxylus Energy has developed an electrolysis catalyst that can produce methanol directly from CO2 and water, removing the need for an additional H2 or syngas production step.
Unlike Ethanol-to-jet, the Methanol-to-jet process is actually not yet an ASTM-approved pathway to produce SAF, though it is likely only a matter of time. But there is benefit in having multiple fuel molecules (methanol, dimethyl ether, gasoline, SAF), with their distinct advantages and use cases, all closely linked in a value chain. Innovations that make methanol synthesis cheaper and more efficient are transformative for the industry as a whole.
Considerations for investors
As we’ve spoken with startups and experts over the past couple of months, we’ve compiled some questions to evaluate innovations in the SAF space. In addition to the operational advantages or constraints of the tech, it’s important to understand the potential ease or difficulty of deploying the tech at scale. And of course, the maturity of the tech should match the stage of investment and level of risk of interest to the investor.
Operational tech advantage:
- How do your tech advantages translate to value? What price point for SAF is attainable with this innovation? How does that compare with other SAF and market prices for regular fuel?
- What is the efficiency of your catalyst or system (e.g. mass of product versus quantity of energy or feedstock input)? How does this compare with competitors?
- What is your feedstock? Is the supply scalable? How sensitive is the catalyst or system to varying feedstock spec?
- What are your assumptions for electricity price and intermittency/availability?
- What comes out the other end of the reactor? Is it a mixture of compounds? Is further purification required?
- For systems that integrate carbon capture with conversion to a product: Why is this advantaged? Are you just co-locating two operations, or is there real synergy in the chemistry/physics enabled by this integration?
Deployment advantage:
- Does your catalyst or system use expensive/rare metals or other expensive materials?
- Is it a standard form factor that is easy to manufacture? How large of a system is required for the economics to work?
- How significant will manufacturing/capital cost be? How does it change with increasing production scales (e.g., 1 million gallons, 50 million gallons)?
- What partnerships will be required to go to market and what is the status of the those relationships?
Maturity of the tech:
- How much product (methanol, syngas, fuel, etc.) have you produced?
- How long have you run the catalyst or system and in what conditions?
- What are the risks/uncertainties at the next levels of scale? Is there still scientific risk or just engineering risk?
SAF innovation can make a difference
As the first post of this series pointed out, SAF and other synthetic fuels function as a form of energy storage, a kind of “liquid battery” with all the conveniences of fossil fuels. SAF can’t address the constraints of energy supply, and its adoption is largely dependent on the availability of affordable clean energy, which other industries must address. But there are innovations — more efficient and selective chemistries and more integrated processes — that can move the tipping point to large-scale SAF production. Identifying and investing in the best ones and stacking them together could make a real difference in accelerating a transition away from fossil fuels and creating a cleaner world.
Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in seed-stage companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture.
