Wellington, March 11 NZPA - Biofuel entrepreneur LanzaTech says it has attracted interest from China in its technology, which was last September used in a pilot plant at the New Zealand Steel works to convert waste gas into high-octane ethanol.

The biofuel company said the capability of its microbes to produce ethanol at a low cost has led to a life sciences director at the Chinese Academy of Sciences (CAS), Dr Zhibin Zhang signing a letter of intent with LanzaTech cofounder Dr Sean Simpson.

"LanzaTech has some good news about China," the company said. "It's just the tip of the iceberg, but we can't tell you any more at this stage."

Dr Zhang visited the LanzaTech laboratory and pilot plant at the beginning of March, leading to the agreement on a number of projects covering both technology services and innovation.

"We look forward to collaborating with LanzaTech to bring its world class technology to China," he said in a statement.

In August last year, LanzaTech, collected the "Green Technology Innovator of the Year"" award at the annual Frost and Sullivan Asia Pacific Industrial Technologies Awards in Singapore.

About the same time Dr Simpson was reported to have returned from a trip to China which promoted the process for producing ethanol at the Glenbrook steel works .

The potential for the LanzaTech process was identified in 2005 and the company attracted funding from a consortium that included Stephen Tindall's K1W1 investment fund and an international "cleantech" investpr, Khosla Ventures.

The company has expanded the application of its process to include biomass-derived syngas to able to produce fuels from both industrial waste gas and biomass. It has said the biomass syngas attracted interest in the United States.

Dr Simpson has estimated that the world's steel mills generated enough carbon monoxide emissions to produce 227 billion litres of ethanol a year, and that around half of the world's steel is produced in China, home to four of the top 10 steel producers in the world. The process captures emissions equivalent to half a tonne of carbon dioxide for each tonne of steel produced, and removes particulates, nitrogen and oxygen before sending the resulting gases to a fermentation chamber where the company's proprietary microbes produce ethanol.

The fermentation process is fuelled by a synthetic gas that can be produced from a wide range of biomass resources, including municipal rubbish, waste wood and organic industrial waste such as tyres. Gasification is used to break down the chemical bonds in the biomass, making up to 80 percent of the energy available for fermentation.

Dr Simpson said ethanol was a common transport fuel in China and the authorities there wanted to clean up the steel industry.