Concrete Solutions for Greenhouse Gas Emissions

Mention greenhouse gas emissions, most people think of gas guzzling cars and or industrial chimneys puffing clouds of smoke.  About 8% of the world’s carbon emissions originate in the production of cement.    Indeed, if the cement industry were a country, it would be the third largest emitter of carbon dioxide behind China and the U.S.

What would the world look like without cement?  It is a key component of concrete that is the foundation for most buildings.  Some of the important and famous structures in the world are built largely with concrete, including the Colosseum in Rome, the Sydney Opera House, the Grand Coulee Dam in Washington State, the Panama Canal, and the King Fahd Causeway between Saudi Arabia and Bahrain. 

Cement is composed of calcium, silicon, aluminum, iron and other components.  Limestone, shells and chalk are combined with shale, clay, slate, silica san, blast furnace slag, and iron ore.  It is not just a matter of mixing it altogether.  The manufacturing process requires thermal decomposition of the calcium carbonate into lime and carbon dioxide, a major greenhouse gas (GHG).  There is a secondary emission of GHGs if fossil fuels are used as the heat source. 

The longevity of concrete structures makes it clear cement is a worthwhile investment.  The annual production of cement is near 2.8 billion metric tons per year, the vast majority of which is produced in China.  Global production is expected to reach 4 billion metric tons per year by 2050.  A more environmentally friendly cement would be a plus. 

British manufacturer Novacem Ltd. worked on a new form of cement made from magnesium sulphate that requires less energy to produce.  The resulting concrete would actually be carbon negative, absorbing carbon dioxide as it hardens.  Unfortunately, after a flurry of news releases, the company has not been heard from since about 2012, and now maintains no corporate website.

In the U.S. Ceratech uses 95% recycled fly ash and 5% renewable liquid additives in its feed mixture to make concrete.  The result is ekkomaxx, a cement that has almost a zero carbon footprint.  Privately held, Ceratech maintains a low profile with no corporate website.  The company won early financial support from Columbia’s cement leader Cementos Argos.  In 2011, coal producer Alpha Natural Resources (ANR:  NYSE) also invested in Ceratech, reportedly buying 10% of Ceratech for an undisclosed investment.

Although neither of these starts-up appear to have had the same long and certain future as the structures made from their cement products, there may still be a future for ‘green concrete’ and investment potential in cement innovators.  Development of processes that are not reliant on high temperatures or use non-fossil fuel sources is one avenue.  Another is a substitution of clinker content in cement for other means to lower carbon dioxide emissions.  Concrete can also be made greener by the incorporation of additives such as graphene to strengthen the final concrete and reduce the cement requirement.  The net effect is the reduction of the carbon footprint of concrete structures.

No ‘concrete’ investment opportunity here, but even environmentally sensitive investors could do well to consider innovators in the construction and building materials industries. 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.