Jennifer Holmgren on Carbon Capture and Transformation with LanzaTech

Extreme weather, heat waves, droughts. Climate change has continued to affect our environment and our lives. And what are we doing about it? Fortunately, there are companies like LanzaTech who dedicated 17 years and $500 million to innovating the use of waste carbon in sustainable fuels, fabrics, packaging, and other products that we use every day. In this episode, we are joined by their CEO, Jennifer Holmgren, to talk about their breakthrough in carbon capture and transformation. And how finding the right partners like Zara, Denote, and other industry-leading companies can shine the light on carbon capture and take their shared vision for a healthier environment into reality. Tune in and learn more about how this diverse team came together to help save our planet.

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Jennifer Holmgren on Carbon Capture and Transformation with LanzaTech

I am speaking with Dr. Jennifer Holmgren. She is the CEO of LanzaTech, an innovative carbon capture and transformation company that turns waste carbon into materials such as sustainable fuels, fabrics, packaging and other products that people use in their everyday life. LanzaTech is making quite a name for itself. I’m excited to have Jennifer here. Jennifer is a member of the National Academy of Engineering.

Jennifer, that’s impressive. I went and I looked that you have to be nominated by your peers. This is not something you apply to. It’s great recognition from peers. That’s something that people should also appreciate as we talk here. Jennifer is the author of more than 50 patents. She is a leader and an innovator. Jennifer has been credited with developing the first low-carbon drop-in aviation fuels and has received widespread recognition for her achievements. I’m super excited to have her here. Jennifer, welcome to the show.

Thank you so much, Victoria. I’m honored to have the chance to speak with you.

How did you get started on this journey? When did you first realize the importance of carbon, specifically carbon capture and transformation? Was there a moment that changed everything for you?

There was a moment that opened my eyes to the climate crisis. In my private role, I spent a lot of time thinking about energy democracy and the fact that, years ago, 1.3 billion people did not have access to power. When you imagine a world without power, how do you get water? How do you refrigerate? How do you do any of these things? How do you read a book at night? You realize that there is this massive disconnect that power will bring us together and equalize us. I was super interested in energy democracy. I was born in Colombia and read an article about the fact that climate change left unabated would mean that by 2050, Colombia would not be a coffee grower.

2050 is within our lifetimes. I always heard of climate change as our great-grandchildren and our children but nobody ever said our lifetime. Here is something fundamental to me, where I was born, why I like to drink and what’s going to happen in our lifetime. It also made me appreciate that climate change was going to be a fundamental change to our ecosystem, not just sea level rise, which is a big deal but I didn’t fully appreciate it.

That mentally transitioned me from energy democracy to clean energy democracy. Solving the energy crisis or the energy problems wasn’t going to be good enough. That’s how I mentally went to, “Climate change is the big gorilla in the room.” In carbon capture and transformation, what you start to realize is that we have a linear carbon economy. Take it out of the ground, use it and dump it in the air. I started to realize that there is so much carbon above ground already. Nature is circular. Why can’t we use all of that carbon? That’s how then we shifted to carbon capture and transformation.

What do you do at LanzaTech? You’ve been leading LanzaTech. I heard somebody say it’s an old startup and it feels that way because it’s been around for decades and you’ve been leading it for many years.

The company was founded in 2005. I came over in 2010. The reason I moved over is I’ve been thinking about climate and carbon. I was doing a lot of work with biofuels. I started up the drop-in sustainable aviation fuels and showed that was possible. When I was doing that work, we were trying to always chase the right feedstock.

 

We all recognized that conventional, biological, first-generation feedstocks would contribute. You’re not going to get 100 million barrels of production capacity a day, which is what the petroleum industry is. It’s a massive disconnect between conventional bio feedstocks and the petrochemical complex that we depend on.

Sean Simpson, the Founder of LanzaTech and Vinod Khosla, its largest investor, when he introduced me to LanzaTech, I realized that bacteria could eat carbon monoxide, hydrogen and carbon dioxide. There is enough of that stuff locked up in waste that we could get to the massive scales of the petrochemical complex. I was on a journey to retire. I saw this and thought, “This could be something. This could be relevant. It could have massive implications.” I went ahead and said, “I’ll do it for a couple of years.” Years later, here I am.

Tell us a little bit about LanzaTech’s technology. How does this work? Is that a bacteria?

Yes. The way to think about LanzaTech is you’re used to ferment sugars. That’s how we make beer and wine. What LanzaTech does is it ferments gases, hydrogen, carbon monoxide and carbon dioxide. It’s a typical fermentation but it’s not yeast and sugar. It’s bacteria and gases. What’s interesting is it is a continuous process. It’s like a refinery process. The chemistry happens quickly. You’re used to making beer, you put it in a vat, let it ferment for a few months, come back and get a beer. Here, you get beer in seconds. That lends itself to something that has the ability to scale because it happens quickly.

I have spoken with a couple of leaders who are working in the biosurfactant space and those are batch processes primarily. You’re inherently limited based on the size of the kit that you can build, the level of reactivity and other things. Yet, to get to a continuous process, similar to what we experienced in much of the chemical industry, it’s a game changer.

It means you have to get the engineering right because it is such a different system than conventional fermentation. Think of it as a marriage of refining petrochemical and conventional fermentation, we have to bring both of those things together. You said, “You have been around for a long time.” It takes a long time to scale a disruptive technology. This is why. Biology and engineering both have to be disruptive and different. We have to bring it all together.

Let’s start talking about partnership. When I think about LanzaTech, there seem to be three fundamentals to LanzaTech’s success, innovation, partnership and persistence. It doesn’t happen overnight. Let’s talk a little bit about partnerships because that seems to have been critical to both persistence and innovation.

You’ve made a lot of progress through partnerships with industry-leading companies and even consumer brands such as Danone and ZARA. People could go out and buy some LanzaTech-originated products and clothing. Why are partnerships important to you? How did you come to figure that out?

If you think of a startup company, there’s only so much core knowledge, capability, people and resources that we can have. Partnerships help us in a couple of ways. One is they bring the core knowledge of that other company to bear and all the resources. BASF, for example, is an investor and a partner. Look at the knowledge they bring to the chemical sector. That helps us.

Climate change left unabated would mean that by 2050, Columbia would not be a coffee grower. Click To Tweet

On the back end, working with the ZARAs and the Danones, helps us understand the entire supply chain. How do they get the product? A small company can figure all these things out but it takes a long time. What most people don’t realize is you might figure it out wrong. A lot of the domain knowledge is know-how. It’s not written anywhere, understood nor published. You might try to figure it out yourself. It’s not the same as working with somebody who’s been doing it for 100 years and has learned how to put it all together. I would say partnerships are central to everything we do.

Was it hard to get those first partnerships established?

It is always harder at the beginning. After a while, as soon as ZARA or Danone says, “This is what we’re doing,” everybody picks up the phone and says, “What? How can we work with you?” Before that, while you’re establishing yourself, it does take a lot of convincing. What I have always found is that if you go to the top, you get to people who can imagine the same thing you’re imagining and then they make it happen.

You have to work at different levels in an organization. You have to work at the worker level. At the end of the day, without their buy-in, nothing’s ever going to happen. You also have to work at the top where they can imagine a different world. A lot of people say that CEOs of large corporations have to focus on the next quarter but they’re the visionaries. They’re the ones who are thinking, “What do I want this company to be after I leave?” They can imagine a different future. They’re always willing to bet on new approaches.

You’re very experienced in this. What characteristics make a good partner or a good partnership?

The most important thing is a shared vision. You have to align on what the outcome has to be. What are you trying to achieve? You have to make sure that you agree that the path and the how aren’t necessarily set yet. If it’s an early partner and you’re developing something new, there might be a course correction. You need partners who are willing to course correct with you rather than fight you on the course correction. Alignment of vision and understanding that how to get there is not yet defined.

Also, it’s understanding that new things can take a lot longer than you expect them to be planned. Have a partner who’s patient and understands the need to be patient, which is also why alignment at every level of the organization is important. You don’t want your champion inside that other organization to run afoul of, “You haven’t delivered this yet.” You want to support them. That means you support every level.

I’ve talked with a couple of folks about this. When we start talking about green technology, carbon capture and some of the innovations that derive a more sustainable future, a lot of the innovation happens in smaller companies such as LanzaTech and yet, the larger companies, BASF, Danone, ZARA or whomever, have the footprint, the wherewithal and the capability to test it in the market and apply more resources. There’s this risk of a bit of a David and Goliath. Maybe sometimes a fear that this big company is going to either take over or overwhelm your efforts. How do you strike that balance? How have you thought about that?

I don’t know that you can strike that balance easily and that it is company-specific. How you deal with each company is different. It’s a little bit like dancing with an elephant. You have to be careful. The other thing is you don’t want a relationship where somebody comes in, they’re the big gorilla, they know they’re the big gorilla and they’re going to tell you what to do. If there is no mutual trust and respect, then you are going to run into a problem as a small company.

 

You can tell from the early discussions, in the joint development agreements and from the beginning that maybe this is one you want to walk away from or this is one you want to do. The biggest concern is that a lot of small companies don’t create a pipeline so they depend on one company. When you depend on one company, you can run into a lot of trouble for all the reasons we’ve discussed.

Let’s turn back over to innovation. Innovation is central to you and LanzaTech but what does that mean? What does that look like for you in LanzaTech? What do you think about innovation? How do you foster innovation inside the company?

That’s hard. Innovation in the first 5 years versus years 15 to 20 is different. You get to a point where you can let the perfect be the enemy of the good. You want to reoptimize and redo rather than get the first commercial up and running and optimize there. There are a lot of things that happen. First of all, Sean Simpson, the Founder of LanzaTech, is an incredible man and an innovative scientist.

He’s always pushing the envelope. That leads to the science team that he manages to always be pushing the envelope. It also sets the tone for the rest of the company because they follow the example. From my side, I also try to always push the envelope and ask why. “Why are you doing it that way? Can you do it differently? Can we reduce the cost by doing it differently?” Creating a culture of innovation means that every one of your leaders needs to create that culture.

You would say you can’t be innovative in finance but you can. You can develop new ways of doing agreements. The business, the finance, the science and the engineering all have to be innovative but you have to be able to stop them from over-innovating. Otherwise, you’ll never build anything. You have to be able to say, “That’s good enough. Get it out there and we’ll do the next generation.”

I would also add one other thing, which is important. If you look at my management team, everybody’s different. They look different. They’re from different backgrounds. They have different capabilities. The other thing that fosters innovation is not having a homogeneous company, not at the leadership level, not at the middle management level and not at the individual contributor level. To be honest, the biggest distinguishing feature of LanzaTech is we don’t look like anybody else.

If you look at LanzaTech, for instance, on LinkedIn and look at the people in the company, it is quite a diverse group. The number of women in leadership positions is striking, which is not typical in the startup ecosystem and chemical world. People have different backgrounds, skin colors, points of view and a variety of things.

You talk about stopping innovation at some point so you can implement that. How do you think about that innovation process and making sure that you don’t kill off innovation too soon nor let it persist too long? One of the reasons, for instance, that we’re seeing a lot of partnerships between larger companies and smaller innovative companies is because it’s hard inside big companies to innovate in a way that makes a difference.

Innovations get killed off very quickly, potentially, in large companies because of the rules, the regs, the size requirements and what have you of these ideas yet by the same token, it can be dangerous if you don’t stop saying, “That’s enough creativity. It’s time to move on.” How do you know when it’s time to say, “Let’s go test this out and move forward?”

Biology and engineering both have to be disruptive. Both have to be different, and we have to bring it all together. Click To Tweet

You don’t. It’s an organic process. You say, “This piece is ready. Let’s test it on the next scale.” In the meantime, you don’t stop innovation. You stop that prototype. There’s still innovation in the background and that innovation in the background is important. You stop at a prototype, you go to the next scale and then it’s like, “That’s not quite what we expected at that scale.”

In the background, you’ve had innovation going on and optimization that you could then adapt quickly into that prototype. You don’t stop. What you have to say is, “We have enough to go to the next scale. Continue with your work and then let’s see if it needs to save us or if it’s what we’re going to do next.” It’s not stopping innovation.

I do want to comment on your large versus a small company. You hit a point about stopping too soon, potentially. What’s important is that LanzaTech has raised $500 million. We got here by spending $500 million. There is no large company that has ever focused on an idea, gas fermentation and put $500 million to work and hundreds of people.

Most people don’t think about that because they think, “A big company can put hundreds of millions of dollars. This big company got a $1 billion R&D budget.” They’re doing hundreds of things. For 17 years with $500 million, that’s how we got to where we got. You cannot do that in a big company. I’ve never seen that done at a big company.

That’s a great perspective. You’re right. There is this assumption that big companies have big resources. The resources are very splintered sometimes, as opposed to having a smaller sandbox or a singular focus and getting everybody aligned on some of the same challenges, problems and solutions that you’re looking for.

Jennifer, you have been a very prolific innovator. You’ve got 50 patents. You’ve spent a lot of time throughout your career being innovative in a technical way. How did you transition from being the doer and the innovator to being the leader? As the CEO, you’ve got to, in some ways, separate yourself. Certainly, as LanzaTech has gotten much more recognition and as you’ve joined with a SPAC to help raise more funds and go public eventually, I suppose, how have you made that personal transition in leadership?

It’s baby steps, to be honest. I started with always being in the lab to making the case for other people to be in the lab to do new things to eventually creating and leading a business unit and then transferring to LanzaTech. It’s steps. To be honest, it’s been a career that’s been unplanned. It’s been about, “There’s a hole there. Maybe I can fill it.” It’s always been that way in my life. “I can do that and make that happen.” Eventually, that became my new job.

Identifying opportunities and being willing to step in and step up is important. That’s a good lesson for people as well to be able to do that and not be afraid to do that. When we think about sustainability and carbon capture, economics are challenging. You’ve already talked about the fact that LanzaTech has spent $500 million over 17 years to get to commercial technologies some of which have spun off successfully, for instance, LanzaTech.

What I see is companies are setting aggressive targets. Consumers are very willing to speak about sustainability and the importance of sustainability, recycling and renewable packaging or renewable fuels and yet, the actual cost of this and who’s going to pay for it still seems to be an open issue. What do you think about that? You’re deep in the heart of this. How do you envision this playing forward?

 

First of all, I always tell people, don’t ask me about being cost competitive. In my mind, that’s the wrong question to ask. If you don’t consider the externalities and you consider the fact that the petrochemical industry is 100 and maybe more years old, it’s very hard to say that new technologies and new approaches are going to get down the cost curve in such a way that they will be cost-competitive.

I get very unhappy when that question gets asked because it has pushed some other companies that do some of the same things we’re trying to do over the edge. If overcommitted, they’re like, “We’re going to be cost competitive by next year.” You aren’t. People are being forced to make commitments they can’t meet and not go into it with eyes wide open. That’s a failure mode of new technologies and industries.

We all have to be realistic and grounded in the fact that we will not compete with a 150-year-old industry. We will not compete on day one. We will become competitive. We believe in a day where externalities will be priced. We believe in partners who are willing to be first, either they pay more or introduce our products into things that have enough of a margin that they can add a little extra. It goes back to the same question you asked me earlier about finding the right partners.

Eventually, we’ll go down the cost curve, be cost-competitive and won’t have to compete with an industry that doesn’t consider externalities. All of these things will happen. Until then, we need the right partners who are willing to absorb a little bit of the extra costs and sell to consumers who are also willing to absorb a little bit of the cost. Together, we will create a new ecosystem, way of life and way of making the things we need and use.

One of the things I struggle with is certainly when I look at consumer products companies that are making promises that we will have 50% renewable content in all of our products by 2030 in some cases. I sit here baffled. I don’t think we have the technology yet to be sufficiently scaled to be able to offer that in a widespread case.

When we think about some of the circularity, we don’t have the circular feedstocks available. To me, that’s where some of the challenges are. Maybe it’s the order of the appropriate sequence. We have to have the technology and then we figure out the feedstock and the feedstock infrastructure. What do you think about that? This is a challenge that we’re facing across a broad number of areas.

There are a couple of ways to think about it. First of all, I always believe that you’ve got to create an environment where you get to skate to where the puck is going. The problem is that sometimes, it doesn’t get there. You have to be careful and set aggressive targets because you will always miss your target.

There is no way that you will ever make your target. That’s not what people want to know. If you set a mild target that you know you can easily achieve, you still will probably miss it. It’s better to shoot forward. If you shoot for the moon and miss it by 10%, you’re way better off than shooting for the next street and missing it by 2%.

We have to be aggressive and support very aggressive companies. I do think though that we have to be careful that we’re not in La La Land that magically, the feedstock is going to appear out of nowhere and be available. There’s a balance between being aggressive and realistic. What does it take to reach that goal? What has to happen? You need some good planning but be very aggressive in your planning.

Creating a culture of innovation means that every one of your leaders needs to create that culture. Click To Tweet

I’m excited about what I see from consumer brands. It used to be that they said 2050 targets. Now, they’re saying 2030 targets. They have roadmaps for those. I’ve seen them on the roadmaps as feedstocks don’t become available. All of a sudden, instead of, “I’m going to do this 50 years from now,” they’ve got roadmaps and they’re planning. Every year, they adjust and make progress. The partners we’ve been working with have impressed me with what they’re willing to do and try. They understand that it’s baby steps.

Jennifer, what’s next for you and LanzaTech?

For us, what we need to do is go much more quickly. We’re starting to get to that exponential part of the curve. We have two commercial plants running. We’re building another seven plants. We’ve got seven in engineering. We’re starting to get to that inflection point. We want to capitalize on that and make sure that there are no delays.

The supply chain is a mess but we don’t want that to slow us down. We’re trying to think of more innovative ways to deliver our technology so we can build all these plants. That’s going to be a flywheel. Once we have more plants, we have more products. Once we have more products, we can make more ZARA dresses and everything works well.

The other thing I’m excited about is synthetic biology. I honestly believe that the future is about the selectivity that biology can bring to the conversion of waste. We make ethanol but we can make acetone, isopropanol and octanol. All of a sudden, you can imagine distributed units using waste feedstocks making all of the chemicals you’re used to. Whenever the price of acetone is high, you make acetone. You can’t do that in the petrochemical industry.

You asked me about being competitive, we cannot compete on this playing field and be successful. We got to create a new one and compete there. When we think about the way commodities are made, nobody’s going to say, “You have to have the same capital and operating costs.” We bring different advantages of selling feedstock. That’s what’s next for us.

We want to go public because of the conversations, “I don’t know how many people believe that carbon capture and transformation can matter.” In the public market, we can show people that this matters. With our partners, we create success. That’s what we need, shine a light on carbon capture and transformation.

We need to get it to the next generation. I was talking to my daughter, “All these energy companies care about is making money.” We were listening to a strategy podcast. That’s how we get geeked out in my house. It was this whole aspect of, “All anybody cares about is making money. What about the world? We need to be looking at environmental sustainability, finding new solutions and figuring this out.”

I said, “I’m talking to Jennifer Holmgren. You would be interested in what she’s doing.” It’s the whole figuring out. This is where you are working. You’ve brought Steve Stanley on board to help license technology and move it forward faster so that it gets into more people’s hands and companies’ hands and can make a bigger impact. By going public, you can change that dialogue and have more funding to do the things you need to do.

That’s what we hope. We think people like you who are shining a light on what we’re doing are helping us get there, Victoria.

I hope so. Jennifer, this has been wonderful. Thank you for joining me. I appreciate it.

Thank you, Victoria.

Thanks for reading, everyone. We will talk to you again soon.

 

Important Links

• LanzaTech
• National Academy of Engineering
• Danone
• ZARA
• BASF
• LinkedIn – LanzaTech

About Jennifer Holmgren

Dr. Jennifer Holmgren is CEO of LanzaTech, an innovative Carbon Capture and Transformation company that transforms waste carbon into materials such as sustainable fuels, fabrics, packaging, and other products that people use in their daily lives.

A member of the National Academy of Engineering and the author of more than 50 patents, Jennifer is credited with developing the first low-carbon, drop-in aviation fuels.

She has been recognized for her achievements, including the 2021 Prix Voltaire International, the 2021 Edison Award, the 2021 Women in Leadership Sustainability Award (WLSA), and she was recently named one of 25 leading women shaping climate action by GreenBiz.

 

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