Energy Drivers – What is the role of low carbon cement in the energy transition?

00:00:03 - 00:01:00

Lance Mortlock

Welcome to our next episode of the Energy Drivers podcast. I'm Lance Mortlock and I'm your host for today's discussion with Apoorv Sinha, founder and Chief Executive Officer at Carbon Upcycling Technologies. Throughout our series, we invite Canadian energy and industrial leaders to discuss key issues, share insights, and ask challenging questions. We're pleased to have Apoorv on our show today. He’s been recognized as a leading climate tech innovator by Forbes Energy 30 under 30 and by Maclean's 2024 powerlist. His company is revolutionizing concrete production by capturing CO2 emissions and waste materials to create low carbon alternatives to traditional cement. We will discuss the implications of his work on the energy transition and the future of carbon management. Apoorv thank you for joining our podcast.

00:01:00 - 00:01:03

Apoorv Sinha

Thanks for having me, Lance.

00:01:04 - 00:01:38

Lance Mortlock

So, Apoorv, let's get into this. I’m really pleased to have you here today. Maybe we could start by you sharing a bit about yourself, and at a high level, introducing carbon upcycling to our listeners. I came across the phrases I was sort of preparing for this podcast. The catch phrase that you use as a company, “closing the carbon loop.” And when reading about your company, super fascinating. So, tell us more about you and your company at a high level.

00:01:39 - 00:03:59

Apoorv Sinha

Absolutely, Lance. Firstly, I guess just to start out, I would say I have a technical background as a founder. I'm a chemical engineer by training, and essentially have been looking at different ways of, contributing to the energy sector and the decarbonization problem that we're facing over the next few years and decades. For the majority of my professional career, I co-founded Carbon Upcycling with a couple of other people back in 2014. So, we're just entering our 11th year of existence and really our work has changed and evolved quite a bit. We, initially we were focused on, low-carbon building materials and advanced composites and looking at pharmaceutical applications of our technology. But by and large, I think our thesis has always been that we want to change the paradigm where, most of what people hear about in the world today when it comes to CO2 is that it is our biggest challenge as humanity. We have to figure out a way of taking 30 odd billion tonnes of carbon emissions that we emit into the atmosphere and essentially put that in a place where it does not affect our climate and the way we live, in the radically kind of accelerated ways that it is. Even just given what we're seeing with the fires in California at the moment.

And so our vision has been to kind of change that paradigm where we were trying to figure out, is there a way of converting carbon emissions from a problem into a resource where we can actually use this as a valuable feedstock for other types of materials and processes that we think could add value to humanity and to society, and ultimately leave us in a much better place, for the generations to come. And, when I think about this, tactically now, Lance, obviously you and I have kind of interacted with each other for a period of time. You know, I think we've become a lot more targeted and focused at Carbon Upcycling about what we think is the impact we can drive in the short to medium term. So, I think a little bit now about getting to 4 or 5 million tonnes of emission reduction impact in the building materials space by 2030. And that's kind of what we're focused on today.

00:04:00 - 00:04:27

Lance Mortlock

So maybe double-clicking on that a little bit. I'm always fascinated by industrial and energy companies that really champion and invest in sustainable ventures, and I'm sure many of our listeners share that sentiment. What is it about carbon upcycling currently that you're developing that you think further advances clean technologies and sustainability? Maybe peel back the onion a little bit.

00:04:28 - 00:06:37

Apoorv Sinha

Yeah, I think by and large these heavy industries or hard-to-abate sectors like steel and cement, even fertilizer production, they require technologies that are able to change the fundamental chemistry of making these materials.

And in the case of Carbon Upcycling, what we've really focused on is how can we take the inherent carbon emissions associated with making clinker, which is essentially the most important ingredient of cement production. How can we replace that with an alternative that instead of emitting CO2, for every tonne of product that you make, actually sequester CO2.

And so generally most of cement production comes from the baking of limestone. You can consider limestone almost kind of to make the clinker, which is kind of the flour to a cookie. And so it makes up most of what we call cement today. And if we can replace the clinker in the cement with materials like slags or coal combustion ashes or clays like Carbon Upcycling has been doing over the last few years, our view is that we can come up with the lowest-cost, lowest-energy way of producing a cement that is just as good today, but without the carbon emission impact that it comes with. And there's the additional benefit, Lance, of instead of having to always use kind of large amounts of limestone from virgin earth, if instead we're able to get feedstocks that are coming as byproducts from the steel industry or waste generation, or in some cases conventional power generation, then we're also able to create a waste-to-value argument as well, which can take essentially the waste of one industry to make a feedstock for another.

And so, I think in a nutshell, I would say that would be kind of the core value prop. And of course, because we've been working with industrial wastes from a few different sectors, it also has the ability to help strengthen local supply chains, which we're becoming more and more excited about because we think that the whole world is going to start moving in that direction.

00:06:38 - 00:07:04

Lance Mortlock

That's awesome. And maybe let's put a size on the challenge into context. Cement is most widely used in building material in the world and is considered, I think, from what I know, very carbon intensive. Alex, could you give us an idea of the carbon footprint created through cement production? Any numbers that you could share, bring up?

00:07:05 - 00:08:04

Alexandr Kim

Yeah. Sure thing. And in preparation for this episode, I was doing a bit of research just to get acquainted with the subject and the industry and most industry associations and stakeholders quote numbers between 5% and 10% in terms of overall emissions on the global and perhaps national scale. But I would like to maybe quote Vaclav Smil, who I know is one of your favorite authors, Lance. In his book How the World Really Works, he mentioned that cement production is roughly responsible for 8% of global emissions, and the production of one tonne of cement release approximately 0.9 tonnes of CO2.

So it's almost a 1-to-1 ratio. And it's worth noting that figure accounts for both CO2 released from the calcination of limestone, and Apoorv briefly mentioned how you need to heat up limestone to create lime and carbon dioxide, so that thermal process is the calcination aspect, as well as the energy used to power the production processes.

But all in all, it's about 8% of global carbon emissions.

00:08:05 - 00:08:30

Lance Mortlock

Yeah. I mean, those are big numbers. You know, reducing the carbon footprint of cement production is a critical challenge to the energy transition. Apoorv, are those numbers consistent with what you might have seen in the past. And maybe perhaps more importantly, how does your technology reduce the CO2 impact compared to the traditional industry?

00:08:31 - 00:11:18

Apoorv Sinha

Yeah, Lance, they're absolutely consistent with our understanding of the challenge. And just to give your listeners another point of context, we hear a lot about the carbon footprint associated with flying. And all of global aviation makes up about 1% of global emissions in the world. So, when Alex talks about 8%, with Dr Smil’s book as an example, that's eight times more carbon footprint, that is essentially hidden in our infrastructure.

And as we build more, as we urbanize, this number is expected to grow larger. And of course, we're making some massive headway with renewable work in power generation, with electric vehicles and our transport. But I think with cement, exactly for the reasons that Alex mentioned, the challenge is much more fundamental because the chemistry itself is responsible for over two thirds of the emission associated with the industry.

So, if you had green electrons all through the grid, you would still have over 65% of emissions from cement production stay exactly the same. And so with our technology, to give you an idea of kind of what we're bringing to the table, our view is that if we can replace limestone as the core or the sole kind of primary feedstock to make cement with materials like slabs from the steel industry or ashes or clays, we're essentially getting to a place where we could, with the results we've already been able to demonstrate with partners today, reduce the carbon footprint of the final cement product by up to 50% to 60% on a lifecycle basis. So essentially what that means is you can have those emissions by creating a domestically sourced, derived product and that material can still be just as climate resilient and durable and adaptable for use as cement and concrete tend to be today. And the last thing I'll mention here is it's not just about the scale of the problem, but also from what we've found talking to our customers and partners, it's also about the ease of implementation. And so to have a technology like ours that is able to use the carbon emission right at the cement plant, use it at a dilute concentration of 5% or 6% or 10%, as opposed to requiring expensive carbon capture necessarily on the front end. These are other pieces that we have found can be problematic or can serve as hindrances for the use of this technology in the field. And so when we start kind of ideating and come up with some pragmatic solutions, the appetite that we've seen from the industry to actually start incorporating these innovations and start using them seems to be quite profound and, frankly, gratifying because as, you and Alex mentioned, we have quite a lot of work to do.

00:11:19 - 00:12:09

Lance Mortlock

Yeah. I mean, those numbers approximately 50% CO2 reduction. I mean, that’s huge. And speaking of the impact, I'm wondering how your technology also affects supply chains from an input perspective. To my knowledge, traditional production requires numerous resources, often sourced through international partners. And maybe given that we might see more US protectionism in 2025, I mean, the news cycle as it relates to Trump right now is pretty wild.

Can carbon upcycling help Canadian cement producers in reducing supply-chain related risks that we might see this year and beyond?

00:12:10 - 00:14:52

Apoorv Sinha

Yeah, Lance, you're exactly right. I think even prior to the US elections in the last couple of months, we've seen a much bigger emphasis on creating strong local supply chains, both in the States as well as in Canada and even in the EU block.

And our view is that there are a couple of interesting challenges that the cement industry faces. Incidentally much of the carbon emission reductions that the industry has achieved in the last 20 to 30 years has been reliant on supplementary materials or materials that are used to substitute cement to a partial degree coming from, the conventional power-generation industry, where coal power plants will make fly ash and that fly ash will go in to replace a portion of your clinker in cement.

Similarly, blast furnace slag from blast furnaces in iron production tends to have a similar impact, so, in a sense, the fact that these other industries have not decarbonized has allowed cement kind of create a lower-carbon product. But as these industries are changing their way of doing business, it is creating a much higher pressure on the cement industry to figure out other ways of decarbonizing.

And incidentally, this also hits on supply chains because as blast furnaces are shutting down in the West, as you can imagine, they're being replaced by electric arc furnaces, which do not produce a material like the cement companies can thus far use. And so instead, they're importing this material from Indonesia, from Japan, from Vietnam, from China, from Turkey.

And to your point, this is going to become much more a point of scrutiny as we go into the next four years. And, frankly, we think that is absolutely the right thing because ultimately, this is not too dissimilar to kind of just offshoring the most kind of carbon intensive parts of your supply chain.

And even if the driver is to create domestic jobs and domestic supply chains, we think ultimately it drives towards the same net kind of result, which is, if you can source the materials locally, create local jobs, then in a sense, it actually couples the carbon impact that we want to achieve with the domestic economic activity that we want to internalize as policymakers.

And so we're very much advocates of trying to do this kind of innovation so that the capital investments that are happening over the next few years happen in Canada, happen in the US or in other parts of the Western world, so that this material and this kind of feedstock in these supply chains is being sourced locally, creating local jobs at every step of the way, as opposed to, kind of maybe, being lost through externalities.

00:14:53 - 00:15:48

Lance Mortlock

On that point, I've often said, both on this show and personally, that Canada needs more infrastructure to foster our economic growth and, as I'm sure you can appreciate, Canada is kind of on its knees economically right now. And I think one thing all Canadians can agree on is that we need better affordability and we need to get the economic engine of this country going, which means we need more cement for construction purposes. And so I’m curious, Apoorv, as you scale operations, how economically feasible is your technology approach and what challenges do you face in expanding production in an economy that might be poised for a lot more development in the coming few years?

 00:15:49 - 00:18:28

Apoorv Sinha

It's a very good question, Lance. And, one of the things that we pride ourselves on is listening to our customers and to the industry and trying to make sure that as innovators, we're coming up with solutions that are pragmatic and actually work with what their constraints are. And so, what we've already proven is that with the work, with the commercial demonstration units that we've got working here in Western Canada, in Calgary, we've been able to already achieve price parity. And even with the extra cost of our processing, our partner Burnco is able to provide an equal cost or, almost equal cost material, to most of its end customers, depending on the scale of the project. As we go into a project that we're going to deploy in Ontario, in Mississauga, with our other partner, CRH. Again, we're very keen to make sure that the material is basically a cost parity to the end customer or within 4% to 5% of that number. And this is important because one thing to appreciate is that with the scale of cement production that Alex talked about earlier, there also comes a significant commoditization of the material and thus a very, very low cost. In fact a metric tonne of cement in most of North America costs you less than $150. And so you could literally have a dinner for two in most American cities and pay more than you would pay for a metric ton of cement. And so, with that in mind, when we're advancing any technology, whether it's ours or a few other groups that are working in this space, we're competing against a very optimized, refined, extremely commoditized industry. And so, the economies of scale will take time to kick in even with a few thousand tonnes, and in the next year, tens of thousands of tonnes of production that we'll have online, will still be slightly more in terms of the cost of goods sold than conventional limestone-based cement production. Having said that, this is significantly cheaper than some of the changes that the industry might have to make by adopting solutions like hydrogen in the energy sector or using carbon capture and storage as a way of storing carbon emissions in cement or other heavy industries. And so, we do think that ultimately the most pragmatic decarbonization solutions will prevail. But yeah, I think overall, there's nothing fundamentally in our process or technology that should precluded from being, in that short list of cost-effective and scalable technologies for the groups to adopt.

00:18:29 - 00:19:00

Lance Mortlock

I want to shift gears a little bit to government initiatives or policies that you think are needed to promote decarbonization in this space. Over the last couple of years we've seen some efforts like the Cement and Concrete Breakthrough Initiative, the Clean BC program for industry, that really offer the funding for companies like yours. But should there be more action from government, in your mind?

00:19:01- 00:20:42

Apoorv Sinha

Yeah, Lance, going back to your previous comment about how much Canada needs to do, and frankly, most of the world needs to do in infrastructure building. You know, it is an important tidbit to recognize that about two thirds of all infrastructure built in a country, for the most part in the OECD countries, is funded by government at some level. And so, you're exactly right. I mean, Lance, government not only, in my opinion, has a role to play as the ultimate procurer of many of these infrastructure assets, but also as a catalyst to make sure that some of these new technologies and new ways of building are taken into account. We think that procurement is probably the biggest lever and probably the most challenging one from what we've seen for the governments to start including. But I think investment tax credits that are another angle that the Canadian government has started to focus on a lot more.

And we think that there are some very interesting and short- term opportunities, for governments to help, not just with the early-stage R&D work that I think Canada's built a very good global reputation on, kind of fostering, but also the actual full-scale implementation and realization of these technologies as they advance. So, I think this is where I would argue that Canada has left a lot of value on the table.

And if we are going to hit infrastructure with the ambition that you talked about I think there's  a lot that can be done to kind of get many of these technologies that are being proven and kind of validated by global players to then start scaling up and staying in Canada to achieve drastic emission reductions and economic impact.

00:20:43 - 00:21:20

Lance Mortlock

Maybe on this thread of, different stakeholder groups, recently we've also witnessed higher levels of collaboration between industries to really drive innovation and sustainable outcomes. For example, the electric utilities are now collaborating with EV manufacturers to manage grid modernization and deploy vehicle-to-grid technologies. In the case of Carbon Upcycling, are there opportunities for cross-sector collaboration and maybe allude on that a little bit?

00:21:21 - 00:23:51

Apoorv Sinha

I definitely think there is. And I think when we start talking about the kind of volumes of cement production around the world that need to be impacted by a new technology, the only way to really make that work at scale is by also tapping into the supply chains of other industries like steel and fertilizers and mining, and this is really been a core premise of how Carbon Upcycling has looked at this approach from day one.

You know, in Alberta, the supplementary cementitious material that is mostly mixed with cement is coal combustion ash. And even as coal power has been going away in Alberta and is practically gone now, we still have millions of tonnes of coal combustion ashes sitting in landfills that are now being harvested to make low-carbon products for local infrastructure.

And we're seeing similar things happen with the steel industry out east, where electric arc slags are now being validated or activated through technologies like Carbon Upcycling’s to create a valuable material for the cement industry to use. And so, I would say the collaboration generally, I think is happening organically, Lance. I think at least that's been our view, is that there aren't necessarily cement and steel companies or associations that are coming together on a regular basis and looking at ways of engaging in a, let's say, at a tactical level.

Having said that, I think what we're starting to see now is groups like the Rocky Mountain Institute and the Cement Association of Canada[AK1] , I think, deserves a bit of credit as well for some of the things they are starting to do to start engaging with different industries and pulling them together into conversations that could, over time, lead to the type of collaboration that you're referring to.

And just very recently, just in the last month, Carbon Upcycling was selected in the Elemental Impact Challenge competition. They're looking to create low-carbon infrastructure for the data centres that they're going to build over the next few years. And again, even though that is more almost like an open innovation kind of concept, in its genesis, it is pulling together companies that are working on the rebar for that project or the concrete for that project to come together and formulate solutions, or adopt technologies like Carbon Upcycling’s  holistically, such that the overall embodied carbon of the material can be reduced as much as possible.

00:23:52 - 00:24:09

Lance Mortlock

Maybe following up on that to the extent that you feel comfortable, Apoorv, could you please share what partnerships or specific collaboration opportunities your company has pursued with other market players or cross-sector parties?

00:24:10 - 00:26:00

Apoorv Sinha

Absolutely, Lance. I would like to highlight a couple, perhaps. Within the cement industry, we're extremely proud to have three of the largest cement companies in Europe and North America, CRH, C-Max and Titan, as both investors in the company as well as partners in a string of different projects that we're exploring at the moment. This is really important for us because we think that sometimes there can be a notion of startups coming into an established industry and disrupting, from the onset kind of, carving their own path and kind of working separately. But philosophically, we've taken a very different approach. And the fact that we've been able to start moving projects with them has been really exciting for us. We're starting now to start doing similar things with the steel and the mining industry as well. But then the other piece where maybe I'll highlight a couple of names, is in the research and development area.

 

You've talked about the Canadian ecosystem previously and the work that we're doing with the National Research Council in Canada with groups like the Emission Reductions Alberta Group in Alberta, as well as NRCan, Natural Resources Canada ,at the federal level, we've made some significant strides in leveraging their support, not just as essentially funders of some of the work that we're doing, but also in leveraging their academic and technical resources to advance our technology and make sure that some of the procurement work that we're trying to move forward, can holistically take into account some of the resources that they have available, to validate our technology and find used cases for it. So I think all in all, five, six years ago, we used to be almost entirely focused on research and development. And it's been really exciting to see that evolution now towards corporate players.

00:26:01 - 00:26:34

Lance Mortlock

That's fantastic. Lastly, as a startup founder, you've experienced significant personal growth alongside your company. And we've known each other for several years, and I've always watched your journey with fascination. What key leadership lessons have you learned from your early projects and what advice would you offer to others looking to design and start a cleantech company?

00:26:35 - 00:28:17

Apoorv Sinha

Yeah, like you said, Lance, we've obviously known each other through a range of mutual contacts and work that we've done together for a few years now.

And it's always hard to kind of find time to reflect, even over the holidays sometimes to kind of look back and see what you've learned or what you're doing differently. But I think overall, I guess two big pieces of advice I would give any person looking at getting involved in this kind of stuff would be number one, just trying to learn as much as possible by listening and, and really learning from industrial kind of stalwarts and experts reading, because it really helps you get to what I think is my second piece of advice, which is to really have a crystallized understanding of the problem you're solving and over what time frame. I think some of the problems that startups run into sometimes is you can be too pioneering or too trailblazing and maybe have a distorted view of how quickly things can change. And so being able to align both on what your vision and what the clarity of purpose is for with what you're doing, but aligning that in a time frame that actually works with where you're trying to work, I think is really important because sometimes startups, especially in kind of the zero para a couple of years ago, people were talking about hatching up unicorns within 2 or 3 years. I think when you get into heavy industry and the kind of work that we're doing, you have to take a much longer view. And the only way that you can still be clear about your purpose there is by ensuring that you're talking to the right people and really learning as much as possible in in every conversation or interaction that you have.

00:28:18 - 00:28:27

Lance Mortlock

Are there any questions that I should have asked you that I didn’t? Anything you want to wrap up with Apoorv, that you want to get off your chest?

00:28:28 - 00:29:34

Apoorv Sinha

You know, one thing I always try to emphasize, Lance, is, what are the key reasons that people are trying to work with us, I guess, what are the things that are attracting some of these groups to come and connect with us, or why they should connect with us, I suppose.

So, Carbon Upcycling is very focused on circularity and carbon emission reductions. And as such, we're very interested to get in touch with groups that are looking at decarbonization of heavy industry, looking at ways of mineralizing carbon emissions into valuable products. And so, a lot of what we've talked about today, Lance, has been about the cement industry and the building materials sector, but we've also been in touch with groups in the energy sector and in  fertilizer production about how do we take some of the emissions from their heavy industrial footprint and convert that into a solid product that can be used to sequester CO2 in cases where they can't store it underground? So, if these are the type of challenges that any of your listeners are thinking about or want to explore collaboration around, we'd be very keen to get in touch and discuss that further with them.

00:29:35 - 00:31:33

Lance Mortlock

Yeah, that sounds good. Thank you for your time and insights, Apoorv. It's always a pleasure talking to you about Carbon Upcycling and the role of low-carbon cement in the energy transition. For our listeners, if you have your own questions or queries, you can reach out to EY via the attached contact details. Finishing another great conversation and episode, I'd like to share a few final thoughts. So, number one, decarbonization is critical to cement production. Our conversation with Apoorv reinforced my view that low-carbon cement production is highly important to the energy transition.

As one of the most carbon-intensive industries, finding innovative ways to reduce its footprint is not just beneficial, but I think critical to a low-carbon future. Number two, carbon upcycling solutions are already available. Apoorv shared some exciting developments in the field of low-carbon cement production, highlighting that solutions for a more sustainable cement industry are already here. These technologies don't only focus on reducing the carbon footprint, but also have the potential to develop a local infrastructure and reduce supply chain-related risks that I think is going to be a hot topic in 2025 with President Trump coming into power in the US. And finally, number three, there is a need for more incentives and strategic procurement. Despite the availability of these technologies, there's widespread adoption that hinges on supportive policies, government incentives and procurement strategies that prioritize low-carbon cement are essential to accelerating the transition towards these sustainable practices. So, Apoorv, thanks for joining us. It's been great. Appreciate your time.

00:31:34 – 00:31:35

Apoorv Sinha

Thank you so much, Lance.

00:31:36 - 00:31:42

Lance Mortlock

And once again, thank you for our listeners for joining our podcast. We'll see you on the next episode.

 [AK1]Lance, are you comfortable with the mention of these two associations?