Money pours into carbon dioxide-based fuels

An ambitious approach to cutting the carbon footprint of aviation—using electrochemistry and catalysis to make jet fuel out of carbon dioxide that would otherwise be in the atmosphere—is attracting many millions of dollars in investment.

The start-up Air Company says it has raised $69 million in a series B funding round led by the jet fuel supplier Avfuel and supported by several other aviation companies as well as sustainability-focused venture capital funds.

The company has a pilot plant in Brooklyn, New York, and is developing larger commercial-scale facilities. Air Company’s cofounder, Staff Sheehan, says the money it raised will help accelerate the timing of those plants. The firm’s process makes jet fuel–grade paraffins from green hydrogen and CO₂ using a solid catalyst inside a fixed-bed reactor. It powers the process with renewable electricity purchased on the local electrical grid.

The pilot plant also makes methanol and ethanol, but improvements to the catalyst mean the output of the scaled-up versions will be closer to straight jet fuel. Sheehan says the alcohols were a good starting point. “You don’t need to remove as much atomic oxygen from the CO₂. Plus, you don’t need to make as many carbon-carbon bonds.” But booming demand for sustainable aviation fuel (SAF) makes longer hydrocarbons such as those in jet fuel a bigger opportunity, he says.

In addition to private funding, the firm has significant support from US government agencies, including a $65 million contract with the Department of Defense and an ongoing project with NASA, both of which center on making jet fuel from atmospheric CO₂ in remote locations such as battlefieldsand other planets.

Separately, the start-up Twelve has unveiled $600 million in new investment led by the private equity group TPG Rise Climate, along with $45 million in loans. The firm is in late-stage construction on a demonstration-scale plant in Washington State that is slated to make about 190,000 L of jet fuel per year starting in 2025.

Twelve says $200 million of the money is in the form of a series C investment in the company. The rest will finance future plants that Twelve is developing elsewhere in the US. That structure is significant, according to industry insiders, because CO₂-based fuel chemistry has struggled to attract significant project financing even as venture capital has flowed into the companies developing it.

Twelve’s core technology is an electrolysis cell that uses proton-exchange membranes to convert CO₂ to carbon monoxide. From there, a separate reactor makes jet fuel from the CO and hydrogen using a process licensed from the Fischer-Tropsch chemistry specialist Emerging Fuels Technology.

Fuels like the ones made by Air Company and Twelve will account for about 10% of the net emissions reduction that United Airlines hopes to make as part of its goal of reaching net zero by 2050, according to United’s decarbonization director, Rohini Sengupta. Biofuels, energy efficiency, and improved plane designs will get the company the rest of the way there.

In a recent press briefing hosted by the Carbon Capture Coalition, an industry nonprofit, Sengupta described the fuels, often called e-fuels, as “one of the most promising future technologies that we’re seeing emerge in the market.” Because they can be made with CO₂ removed from the ambient air, e-fuels “can be a very closed-loop story from an emission standpoint,” she said.

“The elephant in the room is the green premium,” Sengupta said. Before United and other airlines will make real purchases of large volumes of e-fuels, she said, “the cost to produce needs to come down.” Using e-fuels would at least double the fuel cost of a flight, according to a 2022 projection by the German Environment Agency.

Sengupta described one solution United is piloting, in which the San Francisco 49ers football team pays that premium for its private flights on the airline. “They have their own climate targets, their own net-zero ambitions,” she said. “We can allocate travel emission reductions if they help us buy the SAF.” Sengupta said such arrangements create a demand that will help producers achieve economies of scale.

But cost isn’t the only barrier for e-fuels. Using the same renewable electricity to displace coal-fired power plants or electrify road transportation results in a CO₂ emissions cut 5–10 times as large as what synthetic jet fuel can manage, according to recent estimates.