LanzaTech Boosts LanzaJet Stake to 53% as SAF Production Begins
Move solidifies position in the booming sustainable aviation fuel market as its Georgia plant begins commercial production of ethanol-based jet fuel.
LanzaTech Global (NASDAQ: LNZA) has increased its ownership in its sustainable aviation fuel spin-off, LanzaJet, to a 53% non-controlling stake, a strategic move that strengthens its foothold in the rapidly expanding decarbonization sector. The announcement follows a landmark operational achievement for LanzaJet, which recently commenced commercial production of sustainable aviation fuel (SAF) from ethanol at its Freedom Pines facility in Georgia.
The development provides LanzaTech with greater exposure to the burgeoning SAF market—projected to grow to over $225 billion by 2035—without requiring additional capital investment. The equity was acquired through pre-agreed issuances tied to LanzaJet’s successful sublicensing of its Alcohol-to-Jet (ATJ) technology, a process originally developed by LanzaTech and the Pacific Northwest National Lab.
Despite the significance of the operational milestone, LanzaTech's stock showed a modest decline in recent trading, closing at $13.42. The shares have traded in a wide range over the past year, between $11.20 and $274.00, indicating significant market volatility and a broader reset in valuation for green-technology companies.
A New Era for Aviation Fuel
LanzaJet’s Freedom Pines facility represents a critical breakthrough for the aviation industry, becoming the world's first to commercially produce jet fuel from ethanol. The plant, which has a production capacity of 10 million gallons of renewable fuel annually, uses a proprietary technology to convert low-carbon ethanol into a "drop-in" sustainable aviation fuel.
This fuel is certified under ASTM D7566 and is fully compatible with existing aircraft and infrastructure. Critically, it can reduce greenhouse gas emissions by a minimum of 85% compared to conventional, petroleum-based jet fuel, offering a scalable solution for an industry under pressure to decarbonize. The aviation sector is targeting net-zero carbon emissions by 2050, with SAF expected to account for up to 80% of the required emissions reductions, according to industry body IATA.
Tapping a Trillion-Dollar Market
The strategic importance of LanzaJet is underscored by the explosive growth forecast for the SAF market. Driven by regulatory mandates and corporate climate goals, the market is poised for a compound annual growth rate (CAGR) of nearly 58% between 2025 and 2035, as detailed in market analyses. Policies like the EU's ReFuelEU Aviation initiative, which mandates increasing SAF blend percentages starting in 2025, are creating a durable, long-term demand curve.
LanzaJet's technology is backed by a consortium of major corporate and governmental partners, reflecting broad confidence in its potential. Investors include Suncor Energy, Shell, British Airways, and All Nippon Airways, highlighting deep interest from both the energy and aviation sectors. This diverse coalition has been instrumental in scaling the technology from the lab to commercial reality.
Outlook and Strategy
For LanzaTech, which specializes in carbon capture and transformation, the increased stake in LanzaJet represents a pivotal moment. The company's business model is centered on converting waste carbon and other low-cost feedstocks into valuable products like fuels and chemicals. The success of LanzaJet validates this strategy and provides a clear path to monetizing its innovations in a high-growth vertical.
While the company's stock has faced headwinds, the operational progress at LanzaJet provides a strong fundamental catalyst. With a single "Hold" rating and a consensus analyst price target of $14.00, the market appears to be in a wait-and-see mode. However, as the Freedom Pines facility ramps up production and the value of SAF assets becomes increasingly apparent, LanzaTech's majority position in a pioneering clean energy venture positions it at the forefront of aviation's green transition.