OREANDA-NEWS. Mitsui & Co., Ltd. underwrote USD 20 million of LanzaTech ("LT") newly issued preferred shares. Mitsui is the lead investor of this finance round (total USD 60 million).

LT has engaged in the development of microorganism gas fermentation* technology which converts carbon monoxide (CO) and carbon dioxide (CO2) containing gases into fuel and chemicals such as ethanol and butadiene. LT's main business will be licensing the unique technology.

LT has successfully demonstrated the technology, using waste gas from a steel mill in China, by converting waste gas (which contains mainly CO and hydrogen) to ethanol in late 2012. LT is currently working on a world first commercial project (expected to be operational in 2015) where industrial gas is converted by microorganism gas fermentation technology. On top of this effort, LT is moving ahead on diversifying the variety of feed gases (such as gasified municipal solid waste biogas) and end products (such as butadiene, acetic acid and jet fuel) with prominent partners in each industry.

Ethanol produced by LT's technology is a clean energy made from waste gases and is expected to be used as bio-ethanol to be added to gasoline which is required by regulations in various regions and countries.

LT is also undertaking gas fermentation technology development with CO2 containing gases. Once commercialized, this technology is going to be a groundbreaking business to tackle global warming by creating valuable products out of greenhouse gases.

The aim of our investment is to create a new business where Mitsui actively contributes to developing next generation bio-fuels and chemicals made from waste gases. Through this investment, Mitsui is going to be involved in marketing of LT's technology, business developments and product off-take worldwide. To strengthen Mitsui's involvement, Mitsui will appoint a director as well as send personnel to LT.

This is the third "business innovation project" to be undertaken under Mitsui's new framework to pursue innovative business, established in October 2012. Under the framework, innovative projects are defined as business endeavors newly set up with the aim of creating business for the next generation projects, which are deemed to generate profit from a long-term business perspective. The new framework enables business units to pursue relevant long-term business opportunities, without being subject to some of the strict criteria for investment and certain exit benchmarks stipulated in Mitsui's regulations.