Ze-gen said Tuesday that it has raised $20 million in a Series B round to commercialize its technology for turning trash into syngas by dropping it into a vat of red-hot liquid iron.

The funding comes from Oman-based Omaz Zawawi Establishment as well as previous investors including Flagship Ventures, VantagePoint Venture Partners and the Massachusetts Technology Development Corp.

Founded in 2004, Boston-based Ze-gen injects construction and municipal waste into a vat of liquid iron. The heat leaches carbon from waste material and breaks hydrocarbons into a "syngas" of carbon monoxide and hydrogen.

CEO Bill Davis told a Greentech Media conference in October that the company could make syngas at a cost of $6 per million British thermal units, or BTUs, which would be competitive with prices for natural gas in U.S. markets over the past few years.

Making energy out of the estimated 400 billion tons of waste produced around the world each year is an attractive way to tackle the environmental costs of disposing of it as well as finding new sources of power (see Greentech Innovations: Why Trash-to-Fuel Might Finally Work).

Cities and companies often have to pay up to $30 a ton to landfills and other destinations that take their construction debris and municipal waste – and that landfill waste lets off methane, a potent greenhouse gas. Some landfills are seeking to capture that methane –natural gas by another name – as a fuel for electricity generation, a method also being tried out by livestock operations that want to capture methane from decomposing manure.

Syngas, on the other hand, is generally defined as a mixture of hydrogen and carbon monoxide. Other waste-to-syngas companies include Environmental Power, whose Microgy subsidiary produces methane and syngas from manure and waste, and Nexterra Energy, whose systems for turning wood chips and other green waste into syngas for heat and electricity generation are used by companies in both Canada and the United States (see Funding Roundup: Mega Solar Deals, Algal Biofuels and Clean Water). 

Then there are several startups, such as Fulcrum BioEnergy, Range Fuels, BlueFire Ethanol and Coskata, that are seeking to turn waste into ethanol (see Biofuels and Electricity Take Out the Trash). The latest to make news is Montreal-based Enerkem Inc., which said Monday it is entering the start-up phase for its first commercial-scale plant meant to convert old utility poles into cellulosic ethanol.

Ze-gen, on the other hand, will concentrate first on on-site industrial applications for its technology, Davis said in October.

While the gas can be used for a variety of applications, including burning to generate electricity, Davis said in October that the company would first concentrate on a  "burner model." That is, Ze-gen envisions installing on-site gasification systems at industrial operations that produce organic waste, so those clients could use the syngas generated to displace fossil fuels for their boiler systems and other industrial process heat needs.

Doing gasification on-site would reduce costs of transporting waste, and could help companies reduce their greenhouse gas emissions, Davis explained. Of course, the company's technology could also be used to generate syngas that can be burned to power electricity generation, he said.

Ze-gen had previously raised a total of $8 million to build a test plant in New Bedford, Mass. that has been converting about one ton of waste per hour for five hours a day into syngas.

The company wants to have full-scale commercial facilities up and running by 2012, it announced Tuesday. That timeline is later than Ze-gen's previously announced plans to have a full-scale commercial plant running by the end of 2009, as reported by The Boston Globe.