LanzaTech Global, Inc. (NASDAQ:LNZA) announced Wednesday that its municipal solid waste (MSW) to ethanol pilot plant in Kuji City, Japan has achieved successful operational results, demonstrating the viability of its gas fermentation technology. According to InvestingPro data, the company, currently valued at $32.72 million, appears undervalued based on Fair Value estimates despite facing significant financial challenges with an EBITDA of -$101.81 million in the last twelve months.
The 1/10th commercial scale facility, owned and operated by SEKISUI CHEMICAL CO., LTD. (TSE:4204), has been running since April 2022 with a capacity to produce approximately 400 tons of ethanol annually.
According to the company’s press release, the plant maintained ethanol yields above guaranteed performance levels for more than 14 consecutive days at steady state. The system processed syngas with combined carbon monoxide and hydrogen content as low as 40%, demonstrating the technology’s ability to handle challenging gas compositions.
The pilot project was funded through a joint venture between Sekisui Chemical and INCJ, a private-public fund overseen by Japan’s Ministry of Economy, Trade, and Industry, with additional funding from the Japanese Ministry of the Environment.
"The results at Kuji once again demonstrate the scalability and technical viability of our fermentation platform," said Dr. Jennifer Holmgren, CEO of LanzaTech, in the statement. While the technology shows promise, InvestingPro data reveals LanzaTech is quickly burning through cash with a negative free cash flow yield. The company’s stock has experienced significant volatility, falling over 92% in the past year. Subscribers to InvestingPro can access 14 additional ProTips and a comprehensive Pro Research Report on LNZA, available for over 1,400 US equities.
The facility has been processing non-recyclable waste materials that would typically be sent to landfills or incinerators. LanzaTech reports that its technology successfully integrated with traditional gasifier systems while maintaining performance despite variable feedstock conditions.
The company states that the demonstrated ability to process diverse waste streams could support development of circular carbon economy initiatives across different regions with varying waste profiles.
In other recent news, LanzaTech Global, Inc. has been awarded a €40 million grant from the European Union’s Innovation Fund for a carbon recycling project in Norway. This initiative will utilize LanzaTech’s bioreactor technology at Eramet Norway’s manganese smelter to convert greenhouse gases into approximately 23,500 metric tons of ethanol annually. Additionally, LanzaTech has announced updates to its agreements with LanzaJet, Inc., aiming to enhance the development of sustainable aviation fuel (SAF). The revised agreements will grant LanzaTech two tranches of shares in LanzaJet upon reaching specific milestones at the Freedom Pines facility in Georgia. If LanzaJet is sold or goes public before these milestones are met, LanzaTech’s ownership stake will increase to 50% without further investment. Furthermore, LanzaTech and its partners, including British Airways PLC and Shell Ventures LLC, have executed a series of amended agreements. These modifications adjust the structure and share issuance terms related to their SAF production efforts at the Soperton, Georgia facility.
