Welcome to episode 379 of the Energy Talks podcast. I'm energy journalist, Markham Hislop. 2 years ago, I reported on research going on at the Alberta Carbon Conversion Technology Center in Southeast Calgary. One of my interviews was with Apoor Sinha, CEO of Carbon Upcycling, which combines captured CO2 with industrial waste to create advanced materials. Not only does the company's process sequester carbon, but it also makes the materials stronger and more sustainable.
A great deal has happened since that first interview. For example, Carbon Upcycle's consumer division, OCO, struck a deal with sportswear giant, Adidas, to provide carbon infused black ink for sneakers. Carbon Upt's upcycling is an Alberta clean energy superstar, and I'm pleased to be speaking with chief operating officer, Julianna Niebel.
Thank you very much. I'm happy to be here.
Well, I'm really excited to be talking to you because, I often give talks on in Alberta on the energy transition, and the question inevitably comes up, well, if if the at the global level, the demand for oil and gas is going to decline, and inevitably that affects Alberta, what's the alternative? How do we diversify the provincial economy to replace oil and gas? And I've, I'll tell a little story. So last year at the World Petroleum Congress, I ran into a technical discussion about advanced materials. And doctor Ibrahim Abba of Saudi Aramco was moderating it, and it had some scientists.
And the, doctor, Abba said and this was a bit of an eye opener for me. He said, not only are we in an energy transition, we are in a materials transition. We are figuring out how to make advanced materials in ways we never did in the past. And it seems like your company is solidly in that trend.
Yes. It's an interesting perspective, to hear it that way. We often only think not only, but we often talk about carbon upcycling as being, a decarbonizing tool for the cement industry and something that up cycles industrial waste. But to look at it from a perspective of we're in, maybe alternative materials, we're seeing the potential in existing materials and upcycling them into superior materials that can be used in other industries is something that is, certainly very interesting. So carbon upcycling uses today.
Maybe that's the big change from 2 years ago when you were at the site in in Calgary. We have a, industrial commercially running, operation now in Calgary that actually produces, cementuous materials. So we use industrial waste products from landfill coal ashes. One of the leftovers from the energy transition that that is going on. But also, other materials like clays or materials from the steel industry, steel slag, upcycle them and mineralize carbon into those materials that then can be used in the cement industry.
So maybe what, I don't know your listeners are aware of or not aware of is that the cement industry or the building industry itself is, responsible for approximately 10% of the global CO2 emissions. Of that, 10%, 8% is or the total globally emitted CO 2, 8% is coming directly from the cement industry. So if we can find ways with carbon upcycling, which we think we do, to use, industrial waste, upcycle it, localize supply chains and provide a enriched with CO2 enriched material to the cement industry that on top of everything increases the, quality of that cement, I think we have done a great step in the right direction.
Yeah. That's an interesting story. The idea of the production of the, your material can be done at the local level. It's not like you have to do it at one central location then ship it someplace. You can take local materials and use your process and then, and and cement is everywhere. I mean, all over the world. Yes. And so it has, a very wide application. How but that raises the question, how would you scale up your business model?
So we typically work with, cement companies themselves because the cement industry works very much as a, hub and spoke model. So one cement plant services very many ready mix companies and concrete companies, and then those service very many as our, industries or projects in the world. So that's how we approach that specifically in the cement industry by going to, the the core of the industry, abating and capturing CO2 there, producing the material there and using their channels and their, supply chain channels to actually get the material out to the world to the world eventually.
So, we used to, my wife and I lived in Southeast Calgary and maybe about 3 or 4 kilometers from your test facility was the Lafarge cement plant.
Yes.
And so if I understand this correctly, you would have one of your reactors on-site, providing your materials to Lafarge. Would that is that how it would would work?
Yes. So we work together with, companies like CRH, Resemix, Titan, also Lafarge, across Canada and in North America, and hopefully soon in Europe, to do exactly that. So, ideally, we place our facilities at their site, use the c two from their process to enrich all material, and then, that goes directly into their supply chain and their process itself. So, yeah. And depending on where we are in the world or which geological or geographical area we are in, we we use different kinds of feedstock.
So in in in Alberta, for example, right now, it's it's ashes, coal ashes from the retired coal plants. In other areas, we use steel slacks. In Ontario, we're gonna use steel slacks. In Texas, we're gonna use steel slacks, But we're also working on clays because that is some is a material that is abundantly available across the world and would do a great service to many cement companies to decarbonize in the future.
Maybe we should talk about how your process actually works because when I was at the test site, I saw that great big, mixer, that look it looks like a giant, the kind of cement mixer you would see on the back of a truck, only just bigger. Basically. And so I'm assuming that you you put your feedstock in there, and you turn it, you rough it up, and abrade it, and then you introduce the c o two, and it sticks to the material. Is that how it works?
Yeah. And it it is surprisingly, low tech, if I can say that without, actually embarrassing us too much, but, it is exactly that. So we're using the material that comes in from from the feedstock provider. It is being grind. So we we do exactly what, for example, the oil industry in the oil sense is doing.
We're crushing the material. We're making it very fine and roughing up what we call exfoliating, the surface of that material by being ground down. And then we're adding a little bit of CO 2 in an under pressured, scenario. And that that process itself, is really replicating what happens underground in an in situ, situation. So what we would call carbon sequestration.
Right? So, that's essentially what's happening. We're we're adding CO 2 to the process. It can be very low, purity CO 2. It does not need to be pure CO 2 at all. And the process of the exfoliation and then adding the CO 2 results in mineralization of the c o two in in that actual material. And that enhances comes out as a SCM, or a supplemental cementious material that is then added to the cement mix.
Yeah. That that ability to take, low intensity c02, low purity c02
Yes.
Is important, I guess, because the plant in, in southeast Calgary, as I understand, it it draws the c02 from the Shepherd Energy Center, which is a gas power plant. And I think if I remember correctly, it's low purity, but then enriched. It's made for research purposes. But when you're on-site with, a cement company, you have to take what you're given. And if you, if you can use what, comes out of the plant, then lower cost for you.
Right. And I think so that's exactly right. And then that's one of the huge advantages of this, process that carbon upcycling has developed itself is the the ability to use, a for the process itself to be electric, but then to use low, purity CO2 that differentiates us from, for example, CCS very much because CCS processes are hugely expensive and very, very energy intense, with a result of simply storing carbon. And I don't want to dismiss that, that there's a, there's a space and a place for that. Absolutely.
But it stores, CO2 underground and it's not utilized. What we're doing is we have a low cost, low energy process that utilizes c o two that then can be used in upcycled materials for other building industries and help with that, abate more cement and help the cement industry overall to to decarbonize.
Well, the comparison to, carbon capture and storage actually is maybe a segue into how you perceive carbon upcycling as not just a cement, not as augmenting cement, but you really see yourselves as as a materials company, a research company, a carbon company that's doing unique things to sequester carbon into materials. And Yes. So cement is just one of many that you could, be involved in and plan to be involved in. And it it opens up so many more possibilities to use waste c 02 as a feedstock. And I think that's just bloody brilliant, to be honest.
Mhmm. Yes. So if you if you would have the conversation today also with Apoorv, our CEO, I mean, we we see what we're doing, and we're starting with the building industry and the cement industry because it's such a huge contributor to the over the global c o two emissions. But we're seeing, for example, Pearson Airport is being reconstructed right now. Imagine Pearson Airport now can become a huge carbon sink.
If we're using the right material and the right processes, and it can be cement and concrete, but, as you have as you have said in your opening statement, you know, we could use foam or plastics also as a sink for carbon or paint or anything like that. So carbon upcycling has tested over 40 materials to date to see if we can actually use our process in those and and for many of those, it's very viable. It's just that the cement and concrete industry is an industry that allows us to also use industrial waste. And because of the hub and spoke model, allows us to distribute the the product relatively fast and grow relatively fast and having a a great impact right now in industries that have a very hard time to decarbonize.
Now, if you use c 02 and industrial waste, you mix it all together and then you add it into concrete, how much of the concrete is your material? Is it 10%, 5%, 50%?
It depends a little bit on, the the ready mix company. Today, we're being, mixed in between 15 30% of the concrete as what we're claiming. So it's a significant amount overall.
And and, I understand that it actually makes a better product. It's a stronger product.
Yes. So, I I think, you know, there are many many different ways to measure the the the quality or the durability of concrete is how long does it take for it to actually crumble depending on the climate, how, well does it deal with salty environments, what's the compressibility and all those kinds of things. Overall, we're saying that with the introduction of our materials, we can increase increase the quality of the cement by about 30%, 30 to 40%, which means in the concrete mix itself, they need they use about 30 to 40% less cement. So that results then overall in an approximate c o two saving of 60%. 60%.
So Which is not 0, but it's a large large amount.
So where I'm going with this, Julianna, is that the economics of this, are pretty favorable. I mean, this is not the carbon sequestration and and maybe I'll back up a little bit, because, this is our first interview, and you may not be familiar with Energy Media, but we have reported on the energy transition for we actually, we started in Southeast Calgary 16 years ago. It'll be 17 years on on December 1st. And our take on the energy transition, is that electric technologies are actually more efficient, they're lower cost, they provide all sorts of other benefits. The economics, the tech new technologies, and higher value make for better economics.
That's what drives transitions. Not, you know, the the c o two sequestration from my point of view is almost like a a side benefit, a a collateral benefit. And so I'm I'm very interested in the economics of your process and technology because it sounds like there is a business case for it, not just for c o two, but just making better, cheaper
product. Yes. You're exactly right. So, and I echo what you're saying a 100%. So I come from the renewable energy industry originally, and I, many, many years ago, the claim was it's so much more expensive than conventional fossil fuel.
And today, we're actually, much more competitive, right, in in renewable energy than with, natural gas plants or, I would even claim, other sources of energy. But, I think the same as is applicable here is that we're competing. So when you ask us who we're competing with, I I don't think anybody in our company would say that we're competing, for example, with CCS. That's not what we're doing. We're competing with cement.
So with with what is today available in the market, we're trying to replace that, and we're cost competitive with what's available today in the market. There is no green, premium or anything like that on our product. We it's the same cost, basically.
I I think that's the brilliance behind Carbon Out Cycles business model. Because I look at, other, examples of the the circular economy, and one that comes to mind is batteries, lithium ion batteries that are used in EVs and stationary storage. And we're now there are companies like Lifecycle out of Ontario that can recycle 95% of the materials in that battery and it just go back into the next battery. And so what you have then is and I did an interview with this with, Dan Walter from Rocky Mountain Institute. Essentially, we're 10 years of mining away from having all the materials we'll ever need to make all the batteries we ever need.
We don't need to to mine materials because we'll have a stock of of bat of batteries to recycle. And given all the waste products that are out there and all the c o two that we create, to to have a process that combines waste materials and waste c o two, which makes better products at lower cost, is just, I I think that's it sounds like a breakthrough, to be honest.
Yeah. And I agree. And it cleans up, industrial waste from the past, which I think is a brilliant piece too. It addresses what, some in in another conversation today, the cruel reality of the energy transition that we we are all for and we need it. Absolutely.
But results in, the fact that some of the feedstocks that have been used traditionally in the cement industry are disappearing. So coal ashes, thankfully, are disappearing because we're not burning coal anymore. The steel industry is not using fossil fuels anymore to for their processes. So the traditional slags coming from the steel industry are disappearing, and the electric processes that are now being used in the steel industry create a feedstock that until recently weren't be able to be used in the cement industry and carbon upcycling actually makes those feedstocks usable for the cement industry. So, it's cleaning up and it's upcycling and it's creating a circular industry that, again, there are massive amounts of feedstocks for the cement industry shipped across the oceans, from much less environmentally conscious, areas of the world.
And we can probably, with a little bit of time, stop a lot of that and use what's locally available.
Now, given where you're at in your, businesses growth, I know that Alberta has put some effort into helping companies, commercialize new technologies, and scaling is always the problem. How do you get from your a round of financing to your b and your c, and you get enough money that you can expand your company and and grow your revenue, and all of those things are very difficult. And we're, frankly, in Canada, not as good at it as the Americans. The Americans are very good at that, particularly on tech, and we're not so good. This has been a perennial problem I've for decades, I've I've heard that, you know, run into this.
Yeah. And so what's the plan to scale, carbon upcycling and make it a a, you know, a bigger player in the industry?
Well, I'm gonna address that in 2 ways. I do live in Canada, and I have some pride in trying to actually build as many plants in Canada as we can. As much as I hope, for a certain outcome on the Tuesday election in the US, it might be in a way that it's going to be much more difficult to export actually into into the US. That might help us here in Canada a little bit. We're working closely with the government to, to change current tax credit programs and things like that to allow carbon upcycling to participate in that.
And that is one of our big arguments saying, like, you you don't want us to actually go and do this in the US because they do have programs like that. So we're trying to address that. How are we going to grow? We like I said earlier, we're working with, the the CRHs and CEMEXs of this world, and we're going getting into strategic partnerships with those and and not trying to not only address a project by project approach, but to say we're going to have one project with you and then we're going to scale throughout your organization. And we're doing that that was multiple of these companies starting in the US and in Canada and then hopefully expanding into Europe very, very soon.
So that's our business development approach. At the same time, we're also, raising a lot of awareness. We call demand side marketing. We go into the big engineering firms and architecture firms and, the city of New York and and talking to those who actually have those large mega projects, planned and say, you need to be aware there is actually a solution to using low carbon cement and concrete. So there is there is 2 things going on.
One's where one is we're actually scaling our project pipeline significantly, and the other one is raising awareness and and making sure that the market is asking for that product and specifying it in their piece. That that is really the strategy.
Does Canada have and maybe this might be an unfair question, so, I'll tell you. You can tell. Thank you. Does Canada have the industrial policy? Because you mentioned that that, you know, that the US has policy.
Well, it has the inflation reduction act and the infrastructure act Exactly. That that provide very generous support, and that's that's an example of of of clean energy industrial policy. And Canada and and I know that because I've been criticizing the Canadian approach for a long time, is we're much pat more passive, and we're we're not as aggressive as the Americans are. But I'm wondering if you're finding it for your company's, needs. It doesn't have the the regulatory framework, the policy framework, the financial support to help you grow your company.
I'm going to risk being very, it's not an unfair question. I I don't think the the Canadian government today has the necessary aggressiveness that you were saying to actually support things that maybe were outside of what they had imagined would be possible. So the the regulations that are out there are very specific, and they're always very much geared to very specific technologies while not mentioning them. It's like the the the words basically force you to be either, an in situ storage situation in Western Canada, which it doesn't apply if you're in the Eastern provinces because the geological formations are are just not available in those areas. So that's one issue that when the Canadian government writes or wrote legislation, they had very specific projects in mind that then, doesn't allow a curb in upcycling, for example, to participate in.
You either have to be CCS, very clearly pathway project in Alberta, or you have to be direct air capture of some sort or something like that. Right? But there's no, there there are no grays in those. There's no negotiation within the legislation. And often in the US, rules and regulations are not quite specific.
So there's more room and more flexibility in those. And they think bigger numbers generally in the US, just bigger financial numbers and here it is just overall, always a little bit smaller and more r and d focused whereas the US government has more emphasis on already on on technologies that have are growing out of the early stage r and d, phase and are going commercial. Whereas in Canada, we find it much easier to, get smaller scale grants on r and d project.
Well, that's interesting. I'm I'm I'm a fan of, economist, Mariana Muscato, who's written about the American experience and how the part of the American innovation ecosystem is public support whether it's at the federal level, the state level, and for taking new technologies out of the lab and then derisking them all through the development process so that by the time the private sector is ready to invest in them, they've been derisked. And then they can then you can scale because you have all access to all that capital at the America you know, capital markets that they have. And it's yeah. So I can see from what you're saying that our system is just not nearly as big or as developed.
Well and it's it's it's pushing research and development, and then it's stopping, which is sad. Right? Because then it and it it's to a certain extent what we're experiencing. So we're a Calgary based company. If the the idea was born in Calgary, the r and d has been funded in Calgary.
XPRIZE was, right, was here. Then there is ACCTC. There there are all these research, infrastructures in place, but when you get to a phase where you're not asking for 500,000 anymore, but you're asking big amounts of money because you need to derisk, then then you have to go to the US. It's very unfortunate.
That that is unfortunate, and it's, I don't know whose responsibility it is to fix that. Clearly, though, in part, the federal governments, and and probably to some extent, the the provincial governments as well. And we just haven't unlocked we haven't unlocked that we haven't cracked the code on that one yet. Yeah. That's something that needs to be worked on.
So, maybe what we could, do, Julianna, to to wrap this up is, where do you see the company going in the next year or 2, the next 5 years, the next 10 years?
Mhmm. So it's the end of 2024. The obvious, number is 2030. So our 5 year goal is to, sequester or to save 4,000,000 tons of CO 2 by 2030, which results in about 10 to 13 large projects being built in worldwide. We're focusing Canada and the US right now.
So that's what we're, where we're seeing our projects going. And then, like I said, a little bit earlier, really trying to identify those high profile projects in the next 1 or 2 years where we can say, here's our material is in Pearson airport or in the East Village in New York and I'm sure I will get some help there but that that is really our goal to, deploy in the next couple of years in high profile projects, all material to grow the confidence in the market and the awareness in the market that material like ours is around. And then, again, building 10 to 13 projects to get those 4,000,000 tons of CO2 out of the system. And then going on from there, I think, I mean that those, right, going beyond the 5 year mark for a new company like Carbon Upcycling is always a little bit of a question where the market develops in that timeframe but certainly expanding into Europe and Asia is the next step, that we're starting to work on here. But then, not losing the focus on the, what we talked about, cement is just a start.
That that is where we're starting. We certainly wanted to make a dent in that industry, but then seeing where else can we go from here.
I do have one final question for you, and I'm curious. Do carbon credits play any role in the in the business model?
So we make a point of not making our economics dependent on those. Obviously, they're nice to have, and we're obviously working on that and getting the right protocols in place and all that. But all of our economic models and our project models don't depend on carbon credits. We make a point of that so that we're actually feasible everywhere in the world.
That that makes sense because carbon credits, also have a habit of disappearing. They do. Yes. And changing over time. Well, look, thank you very much for this. This is, I'm glad to, get updated on where carbon upcycling is. All the best of luck. I just Oh,
thank you.
Yeah. You're just a terrific company and and, everybody in Alberta is cheering for you. And I I hope that, more Canadians learn about your company and and its success. So, all the best.
Thank you so much. Yes.