During Thursday's extended trading session, the price of LanzaTech Global, Inc. (NASDAQ: LNZA) surged by 8.94% to $1.95. This came after the stock ended at $1.79 during the regular session, down 1.65%. The announcement of an equity transaction was the cause of the noteworthy rise.

Extension Of LanzaTech's Capabilities

An increase in LanzaTech's stock ownership was announced in relation to LanzaJet, Inc., a well-known supplier of fuel and technology for sustainable aircraft. This extension allows LanzaJet to further sublicense the Alcohol-to-Jet (ATJ) technology in accordance with an earlier agreement.

This technique, which was first created by LanzaTech in association with the Pacific Northwest National Lab and the U.S. Department of Energy, makes it easier to convert ethanol into SAF. In return for additional equity, LanzaJet received authorization to deploy this technology.

On June 18, 2024, LanzaTech acquired the first of three anticipated tranches of LanzaJet common stock, increasing its ownership from approximately 23% to 36%. This acquisition follows LanzaJet's licensing and engineering agreement with Jet Zero Australia, which is developing Australia's inaugural ethanol-to-SAF plant. LanzaJet's Freedom Pines Fuels in Soperton, Georgia, serves as the reference facility for this initiative.

Projected Growth And Future Prospects

The expectation is that LanzaTech's ownership in LanzaJet will increase as the company expands internationally and looks to further sublicense the ATJ system. The second and third equity issuances are projected to elevate LanzaTech's ownership to approximately 46% and 53%, respectively, over the next 12 to 18 months, contingent on project development and ATJ technology deployment.

LanzaTech and LanzaJet are actively collaborating on various projects, where LanzaJet will utilize ethanol from LanzaTech's proprietary waste-to-ethanol biorefining platform to produce SAF through its advanced ATJ technology. This SAF production process can potentially reduce aviation emissions by a minimum of 85%, depending on the technology and feedstock used.

Strategic Implications For The Future

This announcement signifies the initial execution of LanzaTech's strategic plan for commercializing the ATJ process, established when LanzaJet was spun off four years ago. LanzaTech's increased equity in LanzaJet coincides with the burgeoning global demand for SAF, highlighting the significant opportunities for both companies.