The need for concrete innovation

Concrete forms humanity’s very foundations and it comes with a carbon problem that can feel insurmountable. As the second most used substance on earth behind water, concrete accounts for 8% of global CO₂ emissions, with a staggering 0.93 kilograms of CO₂ produced for every kilogram of concrete. This is roughly 2 – 3 times the carbon output of the fuel burn from global aviation and, logistically, just as hard a climate issue to overcome for a number of reasons…

Concrete is highly commoditised (read: cheap), it comes from abundant materials available all over the world allowing for localised production and minimal transport, it exceeds safety performance benchmarks, and (crucially) its production and use is bound by strict regulations that are often ingredient-based.

In short, it’s cheap to make, works exceedingly well, and has a massive carbon impact.

The simple fact is that demand for concrete will only grow: As the global population rises, so too will our need for infrastructure. The market size is currently valued at $1.58 trillion, and will continue to expand with a 5.3% CAGR predicted through 2030. Furthermore, we are firmly in the midst of a global climate-induced infrastructure overhaul – ironically, carbon-intensive concrete will literally form the foundations of global decarbonisation. Against this huge challenge, innovators have begun their journeys to decarbonise this ubiquitous material.

UK’s concrete innovation landscape 

Concrete is made up of four key components:

1. Cement (a “binder”)
2. Aggregates (rocks, gravel, sand etc.)
3. Chemical additives (property enhancers)
4. An activator (which is almost always water)

The concrete we know of today is nearly exclusively made with a cement known as Ordinary Portland Cement (or OPC). And OPC, while only comprising ~9% of concrete by mass, accounts for ~90% of concrete’s total emissions. OPC is an ingeniously produced material, and it is the glue that holds aggregates together to form a stellar building material. Cement, more specifically, is a powdery substance that forms a solid when mixed with an “activator” – a liquid that chemically reacts with the cement (this is most often water depending on the chemical makeup of the binder).

The reasons behind OPC’s carbon intensity are twofold. OPC is created by grinding limestone (a globally-abundant rock) and other raw materials and putting it in a 1,500 degree C kiln before grinding it into cement. Even by industrial process heat standards, 1,500 degrees is very, very hot and energy intensive. The fuel burn from firing the kiln accounts for roughly half of the emissions from cement production. The other half is chemical: when limestone is heated and broken down, it inconveniently chemically breaks down into both 1) cement and 2) CO₂. In the kiln, this (put simply) looks like CaCO2 (raw materials) CaO (cement) + CO₂.

So what are innovators developing to overcome this problem?

We can boil innovations down to three main approaches:

1. Produce cement with less energy
2. Use cement and/or concrete more efficiently
3. Use something else
   • A different cement or;
   • A different concrete altogether

This is roughly equivalent to Third Derivative’s taxonomy of “reduce”, “readjust”, and “reformulate.”

In terms of technological categories, six main themes were identified and shown below, built on previous material from Cleantech Group’s Cement Spotlight, Concrete X, the GCCA 2050 roadmap, 2150 VC and more. Also below are the typical carbon abatement potentials that each of these solution areas exhibit; however, it is critical to note that innovations with low abatement potentials are also likely to face far fewer barriers getting to market, and can make a more immediate impact. They may also unlock and integrate with other innovations.

A final note on the above is that Option F is a catch-all for many different innovations and often interfaces/overlaps with other areas of innovation. It includes carbon capture, which accounts for half of the 18.9 gigatons of abatement pledged by the cement industry by 2050 (see slide 175 of Nat Bullard’s annual presentation). However, it also includes innovations which make use of recycled material (both within and outside the concrete value chain), and more.

Against the solution framework, the UK landscape looks like this:

A key takeaway is that the highest-impact solutions above generally face higher barriers to entry. First and foremost, it is very difficult to get a new cementitious material to the market for safety/regulatory reasons. In structural use-cases (buildings, bridges etc.), regulations point to certifications that only consider OPC (like the highly-utilised ASTM C150). This means that a new cement or concrete (i.e., anything that is chemically different to OPC) can’t just prove high strength performance – they must target different segments of the market  – or even different markets, like marble or ceramics (brick) – while the regulatory landscape unfurls to consider low carbon alternatives and as infrastructure developers consider the barriers from a safety standpoint.

Fortunately for innovators, ASTM standards allow for most cement to be comprised of up to about 30% “supplementary cementitious materials” (i.e., non-OPC cements). At the moment, this tends to be fly ash (from coal furnaces), or blast-furnace slag, which themselves are facing issues of cost, abundancy, and are rooted in CO₂-intensive processes. This means that, for now, at least 30% of cement is up for grabs for innovators regardless of use-case or regulatory requirements.

The issues of regulation are arguably at the top of the list of barriers for low carbon concrete however. The two concrete/cement startups at the top of the global funding list, Sublime Systems and Brimstone Energy (both in the U.S.), have respectively managed to eliminate the kiln during production and have produced a completely novel cement. However, both result in a cement with identical chemistry to Portland Cement, and therefore are not bound by OPC-exclusive regulations, making them incredibly attractive investments until/unless there is a regulatory path forward for other low carbon concretes/cements.

Concrete innovation funding outlook

With all this in mind, cement/concrete innovation is unfortunately not getting much innovation activity and funding (globally and in the U.K.). The figure on the right (which is to scale) displays a rather striking comparison of venture capital funding for cement and concrete innovations versus CO₂ utilisation innovation funding. Despite the fact that fuels and cement are the two largest sinks for CO₂ utilisation, innovations seeking to transform cement and concrete have received roughly 10% of VC funding versus innovations who aim to utilise captured CO₂.

Similarly striking is that lifetime global cement and concrete innovation funding represents only about 1% of the $104.3 billion in venture capital deployed in cleantech sectors since 2020. This is a clear mismatch of funding against emissions sources.

However, there are some positive signs for cement’s increasing popularity among investors, and resilience amidst a cleantech venture capital downturn. Sightline Climate’s 2023 cleantech VC roundup highlights “Industry” (which Sightline defines as including steel, cement, and other goods/raw materials) as the only cleantech vertical which saw an increase in investment in 2023. Resultingly, Industry as a vertical has seen a +6% share in cleantech investment to 17% total (see slide 36 of Nat Bullard’s annual presentation).

There are similarly some exciting ongoing initiatives for pulling through cement innovation. For example, Advance Market Commitments are gaining traction for decarbonising heavy industry – our sister company Carbon Limiting Technologies is currently designing an AMC for low carbon concrete in partnership with Innovate UK, for one. AMCs, which brought us COVID vaccines, will incentivise innovators to reach certain product benchmarks thereby triggering purchases pre-agreed by buyers, boosting innovation, and attracting more investors to the space by ensuring attractive RoI’s.

Contracts for Difference (CfD’s, another type of demand-led innovation mechanism) are also gaining traction. According to the WRI, there are at least four additional ongoing AMC and CfD policies and initiatives being implemented, proposed, or considered for low carbon concrete and/or cement. 

Conclusion

A wide span of different innovations are supporting the decarbonisation of concrete across the innovation areas mentioned above (Options A-F). However, the most impactful innovations on emissions face the highest barriers: True cement/concrete decarbonisation will likely require significant changes to the industry’s status quos. Beyond a commoditised and capex-intensive industry, innovators will have to reckon with the stark issues of regulation and end-user safety taboos (not helped by national gaffes such as the RAAC debacle).

However, a remarkably optimistic picture of the landscape also emerges of a crop of innovators who recognise these barriers (and especially the crucial regulatory barriers) and are working towards two goals:

1. making low-barrier solutions more impactful
2. removing barriers to high-impact solutions

The below matrix represents this optimistic view of innovations, specifically against policy barriers.

The positioning of an innovation on the matrix above has vast implications on the total available market of the product, and the rewards for innovators who understand this positioning and build a business model around it are vast.

This article was written by Jackson Kuzmik, Analyst at Carbon Limiting Technologies. Carbon Limiting Technologies is the sister-company of Clean Growth Fund. It is one of the UK’s most established cleantech incubators, helping industry and government to commercialise low carbon innovations and accelerate clean growth.