CO2-to-vodka startup Air Company aims higher with aviation fuel

The company uses captured carbon dioxide to make sustainable aviation fuel at its reactor in New York City. JetBlue and Virgin Atlantic have pledged huge orders.

Two men wearing black clothes stand in an industrial facility
Air Company's Chief Technology Officer Stafford Sheehan, pictured left, and CEO Gregory Constantine (Air Company)
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The startup Air Company first made a splash three years ago by distilling vodka using captured carbon dioxide. At a converted nightclub in Brooklyn, New York, the company built a maze of tubes and tanks to turn the greenhouse gas into spirits — no grains or potatoes required. Since then, Air Company has tweaked its technology to produce another coveted, crystal-clear liquid: sustainable aviation fuel.

On Thursday, during Climate Week NYC, the startup unveiled a second, larger chemical reactor in Brooklyn. Air Company is now making small batches of CO2-derived jet fuel, including a 5-gallon order for the U.S. Air Force, which recently used the fuel to fly a large drone in northern Florida. 

Still, Air Company will need to scale its production exponentially if it’s going to fulfill its latest tall orders. 

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JetBlue, Virgin Atlantic and other aviation firms have agreed to buy 1 billion gallons of Air Company’s sustainable aviation fuel over the next decade, the companies said this week. The announcement follows a $30 million investment round in April led by Carbon Direct Capital Management and including JetBlue’s and Toyota’s venture capital arms, which brought Air Company’s total funding to $40 million.

Our technology and the products that we make are really a stepping stone to get to massive commodities,” said Gregory Constantine, CEO of Air Company. Along with vodka, the startup makes perfume and hand sanitizer using carbon dioxide captured from beverage manufacturing plants, which produce waste gases during fermentation.

From a decarbonization point of view, [aviation] is where we can have the most climate impact,” he told Canary Media.

The interior of a large industrial facility with a large white cylindrical tank in the foreground
Air Company turns carbon dioxide and hydrogen into fuel at its new facility in Brooklyn, New York. (Air Company)

The global aviation industry contributes more than 2 percent of global greenhouse gas emissions every year, a share that’s expected to soar as passenger air travel grows. Many aviation analysts agree that sustainable aviation fuel, or SAF, will play a key role in reducing emissions from long-haul flights and larger aircraft. Batteries and hydrogen, meanwhile, are expected to power mainly short-haul and regional flights.

Airlines currently use minuscule amounts of sustainable aviation fuel: about 26 million gallons in 2021, or well below 1 percent of total jet fuel demand. Nearly all existing SAF production uses corn, soybean, animal fats or used cooking oil. As industry demand increases, experts warn that relying on such materials could displace food supplies, drive deforestation or perpetuate industrial animal farming.

Air Company is among a growing group of startups that are working to replace petroleum-based kerosene and also develop the next generation of alternatives. 

The CO2-to-fuel startup Twelve is making aviation fuel using carbon dioxide captured from places like pulp and paper mills and ethanol refineries. LanzaTech makes ethanol from microbes that feed on carbon-rich waste gases emitted by steel mills in China; the resulting product is processed into synthetic kerosene and blended with jet fuel. Irish startup XFuel uses waste materials from construction, forestry and agriculture to make biofuels for planes and cargo ships.

The time [left] to address aviation emissions is very limited,” said Nicholas Flanders, co-founder and CEO of Twelve. We think that CO2-based fuels are going to be a really important wedge in this.”

His California-based company is partnering with Alaska Airlines and Microsoft to test its E-Jet” fuel on a commercial demonstration flight. Twelve recently raised $130 million to industrially scale its technology. (On Wednesday, the startup announced that it will also start producing sustainable marine fuels through a partnership with Virgin Voyages to clean up cruise ships.) 

The Biden administration aims to increase U.S. production of SAFs to 3 billion gallons per year by 2030 — an effort that recently received an important funding boost under the Inflation Reduction Act. While airlines and aviation experts applauded the law’s SAF provisions, some critics say the policy risks detracting from other, more immediate solutions to reducing emissions from flying, such as improving aircraft fuel efficiency and electrifying airport equipment.

Rather than putting all our eggs in the basket of sustainable aviation fuels, we need to have a more comprehensive approach,” said John Fleming, a senior scientist at the Center for Biological Diversity’s Climate Law Institute.

Turning captured CO2 into fuel for flying

On a quiet commercial block in Brooklyn’s Bushwick neighborhood, Air Company’s leaders showcased the new reactor.

The startup’s technology begins with just two ingredients: carbon dioxide and hydrogen. The latter element is produced on-site using an electrolyzer, a boxy device that splits water into hydrogen and oxygen using electricity. A chemical reactor combines the CO2 and hydrogen using a metal catalyst to produce either ethanol (ethyl alcohol) for consumer products, or paraffins — colorless, oily liquids — for sustainable aviation fuel. 

In 2021, Air Company built a pilot-scale facility in Calgary, Canada to demonstrate its direct CO2 hydrogenation” technology. The project, which was partially funded by the NRG COSIA Carbon XPRIZE, used carbon captured from the flue stream of a large gas-fired power plant. After operating the pilot reactor for a year, Air Company recently relocated the equipment to Brooklyn.

The startup plans to build another, even bigger reactor near Niagara Falls to take advantage of the region’s abundant hydropower resources, Constantine said. Today, Air Company’s operations mostly draw from New York City’s grid, which is primarily powered by fossil fuels. A rooftop solar array on the startup’s first Brooklyn facility powers some of the operations, and the company subscribes to CleanChoice Energy to support wind and solar projects elsewhere.

The source of electricity is an essential factor in how sustainable” the new fuels really are, since turning carbon dioxide into liquids is an incredibly energy-intensive process — and given that burning CO2-derived fuels in engines still releases carbon back into the atmosphere. Ideally, the amount of CO2 fuel producers are capturing or removing will exceed the amount of emissions they are generating. 

A jar of clear liquid
Startup Twelve makes "E-Jet" fuel from CO2 using an electrochemical process. (Twelve)

If not, so-called electrofuels could result in net harms rather than net benefits to the climate and environment,” according to an August report from the Center for Biological Diversity, of which Fleming was the lead author.

Air Company says its new CO2-based aviation fuel has the potential to reduce greenhouse gas emissions by more than 97 percent compared to traditional jet fuel. Twelve says its E-Jet product has roughly 90 percent lower life-cycle emissions than conventional jet fuel — a figure that includes the carbon emissions associated with manufacturing solar panels or wind turbines used to power the electrolyzers.

While Twelve also uses captured carbon dioxide, its approach to making fuel differs from Air Company’s method. 

The California startup uses electricity and catalysts to split CO2 into carbon monoxide and also split H2O into hydrogen. This produces a synthetic gas. (Typically, syngas” is made by burning coal, fossil gas or biomass.) In a second step, Twelve’s syngas is run through a series of chemical reactions known as the Fischer-Tropsch process to create liquid hydrocarbons.

A small silver mechanical device
Twelve's electrochemical reactor uses catalysts to transform CO2 into jet fuel. (Twelve)

Twelve began producing its first batches of E-Jet a year ago, as part of a pilot program with the U.S. Air Force. The startup is now working to build a much larger plant to produce fuel for its partnership with Alaska Airlines and Microsoft, according to CEO Flanders. He said only that the facility will be built in the United States, and he declined to discuss the timeline and location of the upcoming commercial demonstration flight.

Air Company is likewise in the process of developing fuel to test in commercial planes with other large, yet-to-be-announced partners. Constantine said the earlier test flight with the Air Force drone proves that not only does the fuel work, but it’s safe [and] it can fly at the exact same data points” as conventional jet fuel.

It’s not a conceptual idea anymore; we’ve demonstrated that we have the ability to produce it,” he said of his startup’s sustainable aviation fuel. Now the challenge is to produce it at scale.”

Maria Gallucci is a clean energy reporter at Canary Media, where she covers hard-to-decarbonize sectors and efforts to make the energy transition more affordable and equitable.