Sustainable Business and Finance: Start-up Neocrete using volcanic ash to lower concrete’s carbon footprint

Neocrete’s co-founders, Zarina Bazoeva (CEO) and Matt Kennedy-Good (President).

Neocrete co-founder Matt Kennedy-Good says his company’s mission is to reduce worldwide carbon emissions by 1%.

He plans to do this by tackling the emissions that come from the concrete industry. Traditional concrete is made with cement, which is carbon intensive and makes up 8% of worldwide greenhouse gas emissions.

Cement is needed to bind the components of concrete together.

Neocrete replaces cement, using low-carbon materials including readily available volcanic ash to bind the concrete without adding to costs.

Kennedy-Good says: “That 1% reduction is the North Star for us. We don’t just want to satisfy some local developers in New Zealand, we’ve got our eye on making a global impact.

“Each year three billion tonnes of carbon emissions come from the four billion tonnes of cement made worldwide. The figure is growing and the numbers quickly get big.”

Although Neocrete uses modern, innovative technology, its inspiration comes from ancient history.

Kennedy-Good says concrete has been used in various forms for more than 2000 years. The Romans built the Pantheon with concrete in around 25BC, and it remains the world’s largest unreinforced concrete dome.

“They used readily available natural volcanic ash known as pozzolan. It worked well but the problem with the Roman’s approach is that concrete made this way is very slow to set. It also tends to be hard to work with.

“The Romans got around this by letting it set for a long time.”

Around 200 years ago concrete technology moved on when builders started using Portland cement.

“It is the glue that holds stones, sand and water together. Portland cement is fast. It was a great product for the industrial age.

“But it came with a huge carbon price tag attached because it is made with limestone and that needs to be burned to make Portland cement.

“The process produces around 850kg of carbon emissions for each tonne of cement.”

This was Neocrete’s starting point. Kennedy-Good says the company identified Portland cement as the problem and looked at alternatives. That meant taking another look at the earlier versions of concrete that were made without Portland cement.

Neocrete realised it needed to find another way of activating the concrete materials to speed up the process. It came up with a fine powder which we call an activator. It adds this in small quantities to materials that are abundant throughout the world and which have already been partially activated.

That part-activation still involves heat. Neocrete uses volcanic ash which has previously been heated by naturally occurring energy or it can use the fly ash left over from burning coal. Volcanic ash is low-cost and plentiful, it covers around 1% of the Earth’s surface. It helps that there is plenty here in New Zealand.

Fly ash is the byproduct left behind when pulverised coal is burnt to generate electricity. There are vast quantities of fly ash left over from centuries of coal burning.

Estimates say India has around four billion tonnes, the US has a billion tonnes. Much of it ends up in landfills.

It’s not good for the environment, nor is it healthy for humans or wildlife, so using it in cement solves another environmental problem.

On their own these materials are not practical for making cement. Kennedy-Good says: “Our activator addresses those problems and makes these abundant, low carbon, low-cost materials scale more like cement.

“You can think of it as a catalyst – the Neocrete activator powder speeds up the chemical reactions in concrete-making. You don’t need much of it, it only makes up 3% of the cementitious materials.”

Neocrete is now six years old. The business cycled through other approaches, including using nanotechnology, before settling on its activator.

Kennedy-Good says the company’s size helped here.

“One of the best things about being small and nimble, is we can quickly follow the research and respond to customer feedback.

“We’re doing our best to create a product that industry needs and will use and can scale quickly.

“There are lots of really smart people with PhDs all over the world trying to reduce the carbon in concrete.

“We differentiated ourselves from many, if not all of them, by focusing on activation of low carbon materials in a low capital, fast-to-scale way.

Because the activator is only 3% of the cementitious materials and volcanic or fly ash feedstocks are so efficient, Neocrete avoids the problems facing other cement alternatives.

They might be bulky, requiring huge industrial scale processing, intensive processes and all the environmental issues associated with transporting bulk materials.

This makes Neocrete an exceptionally efficient way of replacing cement. “Depending on the feedstock that we’re activating, we can reduce carbon emissions by between 40 and 50%.

“When we do that with low-cost feedstock, it means our process does not add anything to the overall cost. In many cases, our customers end up saving money.”

The other advantage of Neocrete’s relatively small scale, making up less than 1% of the materials in concrete, is that this makes it much easier to scale up and reach worldwide markets. It also doesn’t require such high levels of capital investment.

This gives Neocrete a potential competitive edge in the market for concrete alternatives. Kennedy-Good says most concrete alternatives are a premium product with a higher price than traditional concrete.

“That’s not surprising if you consider the vast economies of scale that the concrete and cement industries have.

“Cement can be as cheap as $80 a tonne.

“That’s for a material that is dug up from the ground, cooked and then transported incredibly cheaply.”

Competing with an industry that operates at that level with established economies of scale and access to capital looks like a daunting challenge.

“Yet by using technology to create an innovative activator which is less than 1% of the total going into a concrete mix and that is added to material which is already partly activated and so low-cost should work out much cheaper.”

Early last year Neocrete secured $.6.5 million in a seed funding round led by Wavemaker Partners, a Singaporean venture capital firm.

The New Zealand Green Investment Finance (NZGIF) and Icehouse Ventures also invested. The funding round was oversubscribed.

Before that the company was one of the first to receive the Ārohia Full Grant funding from Callaghan Innovation.

Kennedy-Good says the money has helped “but we have been spending that quickly. We set up a pilot plant in Auckland which is about to start producing at scale. We’ve also expanded our team, our lab capability and elsewhere”.

He says Neocrete plans to open a new investment round next year and Wavemaker, NZGIF and Icehouse Ventures are all supporting that. “We’re just starting to talk with investors.

“We’ve been told that the market remains slow, it’s taking about nine months on average for significant fundraisers to get from initial meetings to money in the bank.

“So we’ve been advised to start raising earlier than might normally be the case.”

He says raising hasn’t been so hard for cleantech companies as in other sectors, “especially for us because we’ve relatively light capital requirements”.

“We don’t have massive plant capital costs, which is something investors are shying away from at the moment.”