Swiss-based cleantech venture capital pioneer Emerald Technology Ventures, which manages more than EUR1 billion (USD1.1 billion) in assets, has recently announced its substantial investment in INERATEC, a leader in sustainable aviation fuel (SAF) production. The Series B funding round, amounting to USD129 million and led by Piva Capital, marks Emerald’s first venture into the sustainable fuels arena. This investment will enable INERATEC, located in Karlsruhe, Germany, to enhance and expand its unique synfuel production process, catering to the growing demand from airlines and other companies.

INERATEC’s groundbreaking technology centres around manufacturing reactors that create liquid fuels (synfuels) from non-fossil-based feedstocks. This patented technology and proprietary production process ensure scalability and efficiency, positioning INERATEC competitively in the rapidly evolving low- and zero-carbon fuel market.

This strategic move comes as large fuel consumers, particularly in the aviation industry, seek alternatives to traditional, high-emission fuels like kerosene. Sustainable aviation fuels are increasingly recognised as the most viable option for airlines aiming to achieve net-zero carbon goals. This shift is gaining momentum, with many of the world’s largest carriers and global industry bodies committing to 2050 carbon neutrality targets.

European and American regulations are also driving this green transition. Europe has set deadlines for incorporating SAF into carriers’ fuel mixes, while the American Inflation Reduction Act offers tax credits for SAFs, supporting the Biden administration’s goal of 100% American-made SAFs in aviation fuel by mid-century.

INERATEC’s technology is uniquely capable of producing synfuels from carbon dioxide and hydrogen. These inputs can vary in cost, complexity, and emissions footprint, providing versatility in the production process. CO2 can be sourced from agricultural or industrial outputs, including cement production, offering a lower-emission alternative, or even through direct air capture for a carbon-neutral solution. Hydrogen can be derived from industrial processes or generated via water electrolysis using renewable electricity.

Experts forecast a significant expansion in the global SAF market, with an estimated annual growth of 28% from 2023 to 2035. Emerald partner Christoph Frei highlights the crucial role of SAFs in decarbonising the aviation sector, expressing enthusiasm for supporting INERATEC’s endeavors in Europe and beyond.

INERATEC CEO Tim Böltken views this financing round as a pivotal moment not just for INERATEC, but for the entire energy sector’s shift from fossil fuels to sustainable e-fuels.