Even as more drivers trade in gas cars for electric vehicles (EVs), the vast majority of cars on the road still run on fossil fuels. More of 95 percent of the 1.31 light-duty vehicles (including passenger cars, delivery vans, and small pickup trucks) worldwide rely on gas or diesel, according to the most recent date from the U.S. Energy Information Administration. While EVs accounted for over 20 percent of global car sales in 2024 and overall EV sales are expected to continue, they remain a small fraction of the total fleet and are likely to stay that way for the foreseeable future. Aircela, a New York City-based climate tech startup, is betting on a middle-ground solution—one aimed at environmentally conscious automakers and drivers who aren’t quite ready to give up their gas-powered cars.
In late May, the startup unveiled its carbon-neutral fuel technology on the rooftop of its office in Manhattan’s Garment District. The machine, about the size of a refrigerator and resembling a chunk of honeycomb, uses direct air capture technology powered by renewable energy to extract carbon dioxide directly from the air and convert it into gasoline.
The end product is a liquid “drop-in” fuel, meaning it can be used in standard gasoline or diesel engines without any modifications. This makes Aircela’s fuel accessible “directly where fuel is needed”—in remote locations, industrial facilities, or private driveways that lack robust energy infrastructure, according to Eric Dahlgren, co-founder and CEO of Aircela. The startup views its carbon-free gasoline as a “complement” to EVs, Dahlgren said, helping to decarbonize transportation without requiring automakers and drivers to part with their existing vehicles. Aircela’s gasoline is set to begin deployment this fall.
“The key advantage is that Aircela machines don’t require major infrastructure overhauls,” Dahlgren told Observer. “From a customer standpoint, there’s no need to modify engines or change how vehicles operate. We’re simply changing how the fuel itself is made, which allows us to decarbonize transportation without forcing customers into entirely new systems.”
Dahlgren’s ambitions began as a Ph.D. student in environmental engineering at Columbia University, where he met Professor Klaus S. Lackner, a physicist who pioneered direct air capture technology. While at Columbia, Dahlgren focused his dissertation on small-scale solutions for carbon management infrastructure, earning the best paper award in 2013 from Engineering Economist, an academic journal for capital investment research. Dahlgren and Lackner maintained their connection, collaborating on research into air-to-fuel conversion methods. This collaboration inspired Dahlgren to transform his research into a commercial product. Five years later, Aircela was born.
Aircela’s journey began in 2019 when Dahlgren and his wife, Mia, who serves as the company’s chief operating officer, started developing the technology in their Manhattan apartment. Three years later, the startup expanded into commercial office space and has raised a total of $5.54 million to date to accelerate development, according to Pitchbook. Aircela is backed by investors including Chris Larsen, founder of the crypto payment service Ripple; Jeff Ubbem, an activist board member of ExxonMobil; Maersk Growth, a Danish venture capital fund; and others.
How it works
Aircela’s air-to-gasoline conversion process is divided into three subsystems. First, a fan pulls air into the machine, where it passes through a plastic and nylon net that extracts CO2, creating a liquid carbon solution. Next, an electrolyzer regenerates absorbents while separating the CO2 to produce hydrogen gas. Finally, a compressor processes the gases into methanol, which is then refined into gasoline.
Dahlgren explained that each machine currently produces about one gallon of gasoline every 24 hours, removing 10 kilograms of CO2 from the atmosphere for each gallon produced.
Aircela is working toward mass production of its machines. Designed to be assembled in modular parts, the machines can be scaled without the need for large, centralized facilities. The company is collaborating with specialized manufacturing partners for component production, while handling final assembly and system integration in-house.
“The technology is fully built, so this phase is about proving performance at commercial scale, optimizing production, and building customer confidence as we grow,” Dahlgren said.
Aircela’s plans for early adoption
Within the next two years, Aircela plans to manufacture between 50 and 100 machines for early field deployments, according to Jonny Lowndes, the company’s head of commercialization. Aircela is already in talks with potential customers, including several automakers. In late 2024, the startup showcased its technology to Jaguar Land Rover as part of the automaker’s sustainability innovation challenge. It is also in early discussions with a U.S.-based manufacturer and a German automaker, although the company declined to disclose their names.
Beyond the automotive sector, Aircela is targeting niche markets such as motorsports for racing vehicles, long-haul trucking and shipping. These industries “still rely on liquid fuels today,” Lowndes noted, and are looking for solutions to “reduce fossil dependence without overhauling their engineers, vehicles or infrastructure.”
Aircela argues that its carbon-neutral fuel could actually be more environmentally friendly than electric charging—especially in regions where EV infrastructure still depends on fossil-fuel-powered grids. Executives say creating gasoline from air requires less energy than supplying power to EV charging networks. “At its core, Aircela is solving a different part of the emissions problem: how to eliminate fossil carbon from liquid fuels entirely,” Dahlgren explained.
The company acknowledges the challenges ahead, particularly skepticism about the viability of turning air into gasoline—an idea that many customers and regulators are encountering for the first time, according to Lowndes. In response to Aircela’s product launch, some Reddit users expressed concerns that scaling the technology may not be commercially viable, predicting that operational costs could outweigh the economic returns from the gasoline produced.
However, profitability isn’t a primary concern for the startup just yet. Lowndes emphasized that Aircela is focused on transparency by showcasing working machines, conducting real-world field tests, and ensuring its fuels meet motor-grade standards. The company also plans to send its gasoline to third-party labs for independent validation to bolster its credibility.
Looking ahead, Aircela aims to demonstrate that carbon-neutral fuels can help decarbonize sectors that won’t electrify overnight. Instead of pushing for a complete fleet replacement, the startup is betting on a complementary approach that allows consumers and industries to reduce their carbon footprint without giving up existing vehicles.
In the long term, Dahlgren expects the company to produce millions of units to make a meaningful impact on transportation emissions. “We want to show that fuel itself is part of the climate solution,” he said.