Chinese steel company Baosteel has signed a commercial partnership deal with New Zealand clean technology company LanzaTech.

The pair will work with the Chinese Academy of Sciences (CAS) to commercialise technologies for producing fuel ethanol from steel mill off gases.

Baosteel and LanzaTech will construct a demonstration plant at one of Baosteel’s steel mills, with the aim of scaling the model again toward the construction of the first fully commercial plant in China.

The demonstration facility is expected to be in operation in the second half of 2011.

Traditional technologies are restricted to the use of food resources for ethanol production. LanzaTech has developed a gas fermentation technology that allowsthe use of off-gases from the steel industry for fuel ethanol production.

LanzaTech and Baosteel will work with CAS scientists toaccelerate the deployment of this technology and to jointly research, develop and commercialise related technologies.

This approach provides a strategically important alternative to the use of food resources and reduces carbon emissions from industry, which supports China’s energy policy.

Dr Sean Simpson, cofounder and chief scientist for LanzaTech said “Baosteel is aware that increases in economic growth and industrialisation are traditionally associated with high polluting technologies.

"To break this paradigm, they are positioning themselves to be a leader in the field of low carbon, recyclable and environmentally friendly steel products.”

LanzaTech has run a pilot plant using its technology to produce ethanol from steel mill flue gases at NZ Steel at Glenbrook, Auckland since 2008. A demonstration plant is the last stage before commercial operation.