Latest / The Manufacturing Podcast with Fexingo: Factories, Supply Chains, and Industrial Business / How a California Factory Is Making Jet Fuel from Carbon Dioxide
Transcript
- Lucas: Jet fuel accounts for about two and a half percent of global carbon dioxide emissions, and it's one of the hardest sectors to decarbonize because kerosene has an energy density that's incredibly tough to beat with batteries or hydrogen. But a company called Twelve, based in Berkeley, California, just opened a new facility that's making jet fuel directly from captured CO₂ and water. Luna: Wait — from CO₂? Not from plants or waste biomass like most sustainable aviation fuels today? Lucas: Exactly. No biomass involved. Twelve uses a process called carbon transformation. They take CO₂ captured from industrial sources — or even from direct air capture — and combine it with water in an electrolyzer that runs on renewable electricity. That produces carbon monoxide and hydrogen, which is a synthesis gas. Then they feed that syngas into a Fischer-Tropsch reactor, which is a mature technology from the petrochemical world, to produce a crude oil that gets refined into jet fuel. Luna: So basically they're building a synthetic fuel plant that skips the petroleum entirely. How much are they making right now? Lucas: Their current demonstration plant in Berkeley produces about ten thousand gallons per year. That's tiny compared to global jet fuel demand of roughly one hundred billion gallons annually. But the point is they've proven the chemistry at a commercial scale, and they're already planning a larger facility in Washington state that should hit one million gallons per year by 2028. Luna: A million gallons is still a drop in the bucket, but I get the scaling trajectory. Who's backing this? Lucas: Alaska Airlines is a strategic partner — they've signed offtake agreements and invested directly. Microsoft is also in, partly because they're buying carbon removal credits from the process. And the Department of Energy has given them grants through the arpa e program. The technology has attracted serious industrial capital because it produces a true drop-in fuel — no modifications needed to aircraft or airport infrastructure. Luna: That drop-in piece is huge. Airlines don't want to retrofit their fleets. But what about the cost? Lucas: Right now it's expensive — somewhere between seven and ten dollars per gallon, compared to conventional jet fuel at about two dollars. But that gap is closing because of the Inflation Reduction Act's 45Q tax credit, which pays $85 per ton of CO₂ captured and used as a feedstock. Twelve estimates that with scale and carbon credits, they can reach price parity by the early 2030s. Lucas: You know, this kind of deep dive into how a new factory actually works — the chemistry, the economics, the supply chain — is exactly why we do this show. It's also why a handful of listeners chip in monthly over at buy me a coffee dot com slash fexingo. That direct listener support is what keeps this podcast ad-free and lets us spend time on stories like this one. Luna: Yeah, it's a small community but it makes a real difference. And it means we don't have to cram in ad breaks. So back to the fuel — what does this mean for the supply chain if synthetic jet fuel scales? Lucas: If this becomes widespread, it fundamentally changes the geography of fuel production. Today jet fuel is refined near oil fields or large ports. Twelve's process can be built wherever there's captured CO₂ and renewable electricity — so next to a cement plant, a steel mill, or even a direct air capture facility. That decentralizes production and reduces dependence on long pipelines and tanker ships. Luna: So we could see jet fuel made in the middle of Nebraska near a corn ethanol plant that's capturing its CO₂, or in Texas next to a carbon capture project at a gas plant. Lucas: Exactly. And because the feedstock is CO₂ and water, the process doesn't compete with food production like some biofuels do. It also produces a cleaner fuel — the resulting kerosene has fewer aromatics and sulfur compounds, which means less soot and fewer contrails, which have a warming effect too. Luna: Contrails are actually a bigger climate problem than people realize. So the environmental benefit goes beyond just carbon. Lucas: Right. But we have to be realistic about scale. Ten thousand gallons is a pilot plant. To replace one percent of global jet fuel, you'd need about a billion gallons of synthetic fuel per year. That would require dozens of factories the size of a small oil refinery, each consuming gigawatts of renewable electricity. It's not going to happen overnight. Luna: But it's a start. And unlike hydrogen or battery aircraft, drop-in synthetic fuel can use existing infrastructure starting tomorrow. Lucas: That's the key. Twelve is one of several companies — there's also LanzaJet, E-Jet from Switzerland, and others — all chasing the same idea. The manufacturing challenge is building these electrolyzers and Fischer-Tropsch reactors at scale and driving down costs. It's really a manufacturing story as much as a chemistry one. Luna: It reminds me of the solar panel story — expensive at first, then scaling drove costs down 90 percent. Could the same happen here? Lucas: Potentially. Electrolyzers have already seen cost declines of forty to fifty percent in the last five years. Fischer-Tropsch is a mature process but hasn't been built at the scale needed for aviation fuel. If we see a hundred million dollars of investment in production capacity, costs could fall fast. And the 45Q tax credit essentially acts as a demand subsidy, which de-risks the early plants. Luna: So what's the biggest hurdle right now? Technology, cost, or policy? Lucas: I'd say the availability of cheap, clean electricity. You need a lot of renewable power to run the electrolysis. A plant that makes a million gallons per year might need fifty megawatts of continuous power. That's a significant chunk of a wind farm. And then you need a source of concentrated CO₂, which isn't always available near renewable power. So the logistics of siting these plants is the next big engineering challenge. Luna: Makes me wonder if we'll see CO₂ pipelines, like the ones for ethanol or natural gas, to move CO₂ from industrial sources to these fuel factories. Lucas: There are already discussions about CO₂ pipeline networks, especially in the Midwest where ethanol plants produce huge volumes of pure CO₂. That could feed a cluster of synthetic fuel plants. It's essentially building a new industrial supply chain from scratch. Luna: And that's exactly the kind of thing we cover on this show. So Lucas, do you think we'll actually be flying on CO₂-derived fuel in ten years? Lucas: I think by 2036 we'll see the first commercial flights using a blend of conventional and synthetic fuel from these sources. Maybe not a full tank, but a ten percent blend is feasible without any technical changes. And that alone could start to decarbonize aviation in a meaningful way. Luna: It's still a long road, but at least there's a road. And it starts in a factory in Berkeley making ten thousand gallons a year. Lucas: Exactly. It's a reminder that manufacturing is becoming as much about chemistry as it is about assembly — and the factory of the future might look more like a chemical plant than a traditional assembly line.