Sustainable aviation fuel (SAF) is developing rapidly within an uneven business environment around cleantech as a whole. Despite some work on electric planes, route optimization, and improved aerodynamics, the aviation industry’s strong consensus is that the real path to decarbonization is to swap out petroleum for fuels made from biomass or electricity. Airlines are investing in technology and signing offtake agreements now so that they can meet blending mandates that loom in Europe and parts of Asia, as well as claim subsidies that are becoming available in the US.
Just this past week, the SAF start-up Lydian Labs raised $43 million in series A funding. The round was led by Breakthrough Energy Ventures (BEV) through a new investment fund backed by Oneworld, a coalition of 15 international airlines.
Lydian’s system includes two reactors: one that uses hydrogen to convert carbon dioxide to carbon monoxide and another that uses the resulting CO + H2 mixture to make jet fuel. Those steps—syngas production and Fischer-Tropsch synthesis, respectively—are established chemical technologies that several companies are exploring to make sustainable fuels.
The firm says its edge comes from proprietary reactors that allow it to skip energy-intensive steps such as syngas compression and gas separation while also reducing or eliminating expensive components like heat exchangers and recycle loops. The equipment was also designed to run on renewable electricity, Lydian says, giving it a much smaller physical footprint than methane-fired systems and a built-in compatibility with intermittent power.
Lydian has a pilot facility in Boston capable of making 30 metric tons (t) per year of SAF. It is planning to start up a demonstration-scale plant with a capacity of 7,000 t in 2028 and advance to a 70,000 t plant in 2030.
“Investment from a fund backed by airlines and specifically focused on SAF represents more than general confidence in climate technology: it is a strong indication that sophisticated industry stakeholders see meaningful potential in Lydian’s particular technology, team, and path toward commercial deployment,” says Frederic Clerc, managing director of the Urban Future Lab, an innovation hub at New York University.
And Clerc notes that the Oneworld BEV Fund is more than just a new door to knock on for SAF start-ups looking for cash. “Application-specific funds can also bring sector expertise, customer relationships, and a clearer understanding of the commercial requirements that are often just as important as capital for scaling an industrial technology,” he says.
Lydian was in the 2022 cohort of the Carbon to Value Initiative, an accelerator program at the Urban Future Lab focused on conversion of CO2 to fuels and chemicals. Clerc says the aggressive deployment timeline fits with what he has seen from Lydian’s leadership. Though venture capital is an expensive way to fund a start-up, Clerc says, it can make sense in quickly developing areas like SAF.
