Initially the alliance between NZ-based LanzaTech and Khosla Ventures will focus on the conversion of of waste industrial gases into ethanol.The project is also being supported by two existing New Zealand based investors.

This funding will further technology development and help establish a pilot plant as well as do engineering work to prepare for commercial-scale ethanol production.

It is estimated this technology could produce 50 billion gallons of ethanol from the world's steel mills alone, turning the liability of carbon emissions into valuable fuels worth over $50 billion per year at very low costs and adding substantial value to the steel industry.

The technology will also be a key contributor to the cellulosic biofuels business as it can convert syngas produced through gasification into ethanol.

LanzaTech was co-founded in 2005 by Dr Richard Forster and Dr Sean Simpson, who both have many years of experience in biotechnology and biofuels. The company is aggressively pursuing the development of advanced gas to ethanol technologies based on work developed in its laboratories in Auckland, New Zealand.

As part of its two-pronged strategy of technology development and deployment, LanzaTech has sought international patent protection for its ethanol production process and is forming partnerships to commercialize its technologies and processes.