Air Company raises $69M to convert CO2 into jet fuel

Investors are betting big on Air Company’s efforts to cut carbon emissions from planes.

The New York–based startup announced today that it raised $69 million in a Series B funding round led by Avfuel, an aviation fuel supplier, along with Lowercarbon Capital, IQT, Alaska Airlines, and other investors. That money will go toward building commercial production facilities for sustainable aviation fuel — a move that could help expand production of SAF, which remains limited in supply and expensive.

“The key impact Air Company can have toward fighting climate change is we eliminate the need for crude oil,” Stafford Sheehan, Air Company’s co-founder and chief technology officer, told Canary Media.

The company — and the SAF industry in general — has a long way to go before realizing that vision.

Jet fuel combustion is responsible for 2 percent of global CO₂ emissions linked to energy use. If the aviation sector transitions to using SAF, total flight emissions could fall by up to 80 percent.

But widespread adoption of SAF, an umbrella term for lower-carbon fuels, has been slow. In 2023, 24.5 million gallons of SAF were used to fuel U.S. flights. That’s a fraction of the roughly 69 million gallons of fossil jet fuel the country burns every day. As climate regulation and voluntary corporate commitments push airlines to cut emissions, the demand for SAF is expected to grow quickly, according to McKinsey.

Air Company makes its SAF using a proprietary system that involves capturing carbon dioxide directly from the atmosphere and combining the CO₂ with hydrogen to create paraffins — colorless, oily liquids that it says can be dropped into conventional jet engines. Companies such as Twelve and LanzaTech are also vying to repurpose CO₂ into sustainable jet fuels.

Right now, Air Company operates two pilot facilities in the Brooklyn neighborhood of Bushwick, both of which produce small batches of CO₂-derived fuel for test flights. The startup plans to use its new investment to build an undisclosed number of ​“mini refineries,” which it aims to complete within the next two or three years, according to the founders. These refineries will ​“collect data” to try to prove that its technology can work for large-scale SAF production.

“In order to really fight climate change, we need to build plants that are the size of refineries,” Sheehan said in reference to oil plants, which can occupy up to several hundred football fields’ worth of land. ​“Getting up to that level of scale is what a lot of this funding is going toward.”