First published on the Cleantech Investor website, July 2012
Air Fuel Synthesis pitches at the Cleantech Investor Future Transport Challenge during the Investing in Future Transport conference in City Hall, London, on 16 August 2012
A UK- based company, Air Fuel Synthesis Ltd (AFS) was founded in 2009 to create carbon-neutral liquid fuels from renewable energy sources. The entrepreneurial management team is led by Peter Harrison, CEO, a civil engineer with a career in civil engineering, offshore developments and the chemical industry. Other members of the team have considerable senior level experience in renewable energy businesses, research and the engineering industry, including Rolls-Royce, IMI, ICI Aldermaston and Clipper Wind.
Founder Professor Marmont is very much a renewable energy pioneer. He has managed wind farms in the US and has developed biomass businesses in the UK. Furthermore, his Leicestershire farm is virtually energy self-sufficient and low carbon.
AFS uses a process which captures CO2 from a point source or the atmosphere, electrolyses water to make hydrogen and combines the CO2 and hydrogen to make hydrocarbon fuels. The process uses established synthetic fuels and chemical techniques, but with unique variations. AFS products include methanol, petrol, diesel, aviation fuel and raw material for all forms of plastics. The company has already applied for two patents and is on the verge of applying for another whilst working on the development of more intellectual property.
There are numerous advantages to AFS synthetic fuels. Crucially they are production price-stable as they are not linked to the oil price, and they are also net carbon-neutral. AFS synthetic fuels can replace existing fossil oil-based transport fuels without the need to change infrastructure. And AFS carbon capture products can be easily located wherever there is renewable energy - especially where that energy is stranded or surplus.
AFS is operating a demonstrator facility today as a precursor to its first commercial air fuel synthesis plant. The facility, which is located in Teesside, is producing a range of liquid hydrocarbon fuels using air capture of CO2 and developing intellectual property, technology and processes for the design and build of a first commercial unit. Although initial applications will be small scale, the technology has the potential to be used across the board as fossil fuels become more expensive. AFS has a strong business case for initial commercial applications in motor racing, where a niche market for specialised fuel formulations exists at prices that an AFS plant can match - but with the added bonus of being carbon-neutral. Other target customers include distribution centres, breweries and operations with point source of CO2 and/or renewable electricity. Island communities and military stations with stranded or surplus renewable energy are also potential customers.
AFS is 55% owned by the founders, with angel investors owning 25% and the remaining 20% in the hands of minority investors. The company is considering several partnering and financing options to build the UK’s first commercial 1,200 litres a day carbon-neutral synthetic fuel plant. Equity funding is the preferred choice, but partnering with a customer or supplier are also options and the company has good relations with companies like ITM Power. To date AFS has received around £1.1 million cash equity from angel investors to build the demonstrator unit and run the development programme. The company is currently seeking additional funding of between £5 and £6 million to develop further intellectual property, build the first commercial plant and establish the business.
In June AFS was given the Innovation in Low Carbon Economy award by the East Midlands branch of Business in the Community (BITC).