Out of thin air: how Twelve is closing the carbon loop by turning emissions into products

Based in Berkley, California, Twelve is a company with a big idea: what if, instead of making things from fossil fuels, we could make identical products out of air and water while significantly reducing emissions? With so many fossil fuel-derived products set to remain essential in a net-zero future, it’s an idea that could turbo-charge the fight against climate change. To find out how Twelve is turning what sounds like a conjuring trick into a reality, we caught up with Nicholas Flanders, Twelve’s Co-Founder and CEO – who recently spoke at the 2024 edition of our LO Generations Summit – to find out how his company’s pioneering technology is closing the carbon loop.

Watch the interview with Nicholas Flanders, co-founder and CEO of Twelve:

What inspired you and your co-founders to create Twelve?

Growing up in rural upstate New York, I developed a love for nature. That, combined with my interest in science fiction and industry, led me to seek large-scale industrial solutions to the climate crisis. 

My co-founders and I started Twelve in 2016 with a vision of creating what we call the carbon transformation company. We wanted to help solve climate change by making products that are emissions-intensive, yet essential to the global economy, in a much more environmentally positive way. 

Twelve’s sustainable aviation fuel produces 90% fewer emissions than conventional jet fuel

Twelve’s technology promises something quite magical. How does it work? 

At Twelve, we turn CO₂ from the air into products currently made from fossil fuels – everything from aviation fuel to the building blocks of many plastics – even the stuff in your running shoes. We start with CO₂ and water, break them apart using renewable, green electricity, and then recombine the elements to make new products that are molecularly identical to the ones you get from petroleum today.

Making those same products from CO₂ and water instead [of fossil fuels] has big environmental benefits. For example, Twelve’s sustainable aviation fuel produces 90% fewer emissions than conventional jet fuel.

What makes your solution different from carbon offsetting or carbon capture and storage?

At Twelve, we’re working toward closing the carbon loop. This shift is part of what we call the carbon transition: moving from petroleum-based carbon to atmospheric carbon. Unlike the traditional linear model of extracting, using and discarding carbon, this creates a truly circular economy.

In other words, carbon transformation isn’t an offset – it’s an inset. It directly reduces emissions within a company’s supply chain by replacing fossil fuel-based inputs with carbon-derived ones.

We want to have a big impact on the climate by addressing hard-to-decarbonise industries

Why is Twelve so focussed on aviation?

We want to have a big impact on the climate by addressing hard-to-decarbonise industries like aviation, where we have exciting momentum. We recently announced the largest e-fuel offtake agreement ever signed by a European airline with International Airlines Group, the parent company of British Airways. It’s a 14-year partnership for 785,000 tonnes of sustainable aviation fuel, but that’s just a drop in the ocean relative to the total opportunity. Globally, we consume about 100 billion gallons of jet fuel annually, accounting for 2–3% of global CO₂ emissions. 

Read also: The low-carbon materials that could slash construction emissions

What makes Twelve’s e-fuel better than plant-based sustainable aviation fuels (SAFs)?

Our e-fuel offers significant CO₂ emissions reductions of up to 90% or more versus Jet A aviation fuel, much more than you get with bio-based fuels. We achieve this with a hundredth to a thousandth of the water, a tenth to a hundredth of the land, and a virtually unlimited feedstock: CO₂ that’s already been emitted. This contrasts with biofuels, which require waste cooking oils or land to grow crops. To be sure, we support the use of all kinds of SAF, including biofuels, all of which we need to address the climate crisis. But we believe e-fuels have the most potential to scale and meet sector-wide demand.

A wide range of customers… are excited about our products because they offer a huge environmental improvement over fossil alternatives with no trade-offs in quality

What about other consumer products?

At Twelve, we’re working to create a world made from air. That means taking products currently made from oil, like laundry detergent, running shoes, workout gear and consumer electronics, and making them from CO₂ and water instead.

A wide range of customers, from major transportation sectors like the aviation and maritime industries, as well as consumer sectors such as furniture, apparel and electronics, are excited about our products because they offer a huge environmental improvement over fossil alternatives with no trade-offs in quality. These are “drop-in” products: drop-in fuels can be used in existing aircraft engines, and drop-in chemical feedstocks integrate seamlessly into today’s supply chains for car parts, clothing and more.

Read also: Thread counts: regenerative cotton on the rise in fashion

How competitive is your price point?

This is a new technology and industry. So, early on, our products will carry a scaling premium. But in the long term, as we scale up and reach the size of industries that have been around for a century, products made from CO₂, water and renewable energy have the potential to be cost-competitive with those made from fossil fuels. We’re excited to partner with pioneering companies and brands committed to coming on this journey with us.

Clean energy is vital to maximising the emissions reductions Twelve can deliver. How do you think the sector is developing?

Everything is being electrified and demand for green electricity is exploding in virtually every sector, from AI [artificial intelligence] to e-fuels and electric vehicles. That means we need massive growth in renewable energy and other next-generation, carbon-free electricity sources. We’re going to see tremendous investment in the grid; not just in renewables like wind and solar but also in new sources of carbon-free energy, such as small modular nuclear reactors.

For now, this demand growth has put upward pressure on prices, affecting every sector reliant on green electricity. However, this is a near-term supply crunch. In the long term, rising demand for clean power will lead to enormous capital investment, ultimately reducing costs across industries.

We’ve already attracted top Silicon Valley deep-tech investors and have now transitioned to a growth capital stage. We recently closed a Series C round

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How has investor appetite been for your business model?

Our model is based on multi-year offtake agreements for products made from CO₂. Once revenues are secured, we obtain project financing.

We’ve already attracted top Silicon Valley deep-tech investors and have now transitioned to a growth capital stage. We recently closed a Series C round and a USD 400 million project equity partnership with TPG Rise Climate. The funding we secure enables us to build and operate AirPlant™ to manufacture and deliver our products. We also recently secured the first construction loan for an e-fuel facility in the US, partnering with a major lender in the solar space.

Where do you expect Twelve to source most of its CO₂ as you scale up?

Today, we capture CO₂ from point sources, focussing on biogenic emissions from industries like pulp and paper, ethanol and biogas. In the long term, we plan to source our CO₂ from direct air capture (DAC), though it’s currently more expensive than point-source capture. 

Within the next decade, we expect to see more Twelve projects powered by DAC, and we envision building dozens of Air Plants across the US and, eventually, internationally. Our goal is to make products like jet fuel and chemical feedstocks at large scales, addressing climate change with solutions that hold real market value.

Are you optimistic about tackling the climate crisis?

I believe humanity will address the climate crisis, but we’re currently acting too slowly to avoid some damaging effects. Sooner or later, innovation will enable us to overcome our collective sluggishness – though this is likely to happen later than we all hope.