Recently at B&W, an article circulated about a new cement product (not concrete yet!) that reduces the amount of CO2 in production and that also sequesters the dreaded greenhouse gas by using it to cure the resulting concrete without all the water and heat and time to ultimately make a better, stronger, cheaper material. The cement produces up to 70% fewer emissions, compared to producing Portland cement which causes 5% of the world's global emissions.
So we called their CEO, Tom Schuler, formerly of DuPont Building Innovations and DuPont’s Growth and Sustainability Boards and the World Business Council’s Board for Sustainable Development and who then jumped on this opportunity with Solidia. He had a lot to say.
B&W: The science behind Solidia Cement started at Rutgers University. How did it get incubated from there and then turned into a commercial venture?
Tom Schuler: The technology came out of Rutgers about ten years ago and Kleiner Perkins was actually looking for places to invest startup money. A gentleman named Bill Joy is iconic in Silicon Valley in that he was one of the co-founders of Sun Microsystems. So he knows good ideas when he sees them and encouraged KP to do the first two rounds of investment.
The biggest challenge we have is getting people to understand that there’s a difference between cement and concrete! You laugh but most people don’t know that there’s a difference....
B&W: That’s not a bad first partner.
TS: Yeah, that’s not a bad place to start! The raise went on for three years until they finally decided to start hiring employees. I was brought in with a team in 2010 with the expressed goal to take the product out of the lab and get it into the marketplace as quickly as possible. Not only because of the impact it could have on the environment, but it also turns out that it’s a better product that is both environmentally and financially more interesting than what people are doing today.
We started hiring material scientists and then found out we needed civil engineers and now, because of the digital nature of our technology, we’ve hired programmers and statisticians.The company has evolved as we’ve learned to put a system together that will work best in the industry.
B&W: Coming from a behemoth like DuPont, do you feel like you’ve left the borg and are now at a little startup?
TS: No, I think at the end of the day the principles don’t change that much. We’re about 65 people right now. The difference is that you don’t have as many people looking over your shoulder. So when you make a decision, you get to see the results by the end of the day. That’s been a refreshing change. I think that there are people that make the transition from big companies to smaller companies and those that don’t, but the Kleiner Perkins head of HR said that I seem to be genetically suited for this kind of work!
B&W: How were you instrumental in creating the team? It sounds like it was a quick process.
TS: As you come in with any new team, I think the best thing that you can do as a leader is to define what the vision is, define where you’re going and what you expect from people and then your team will begin to evolve from there.
We found very quickly that we had some holes in skill-sets that we needed to plug. We went out and found some really capable folks. We’ve got a really young organization. They’re really smart. They’re really aggressive and they don’t know how to fail, and we don’t want anyone to teach them how to fail. My job is to make sure that they have the resources to get done what they want to get done.
B&W: You have close to $100M invested, do you still have runway, or are you constantly looking for investors?
TS: Man, I don’t know any startup that’s not constantly looking for investors! That’s just part of the job. So I don’t think fundraising ever ends. The key now is that we’ve proven the technology. We’ve scaled it up on a commercial scale, both on manufacturing the cement and on manufacturing the product. We’ve got stuff out on the market that’s being sold and used, and so now the fundraising is quite different because you’re just trying to get enough gas in the tank to match the accelerator as quickly as you can. Our investors have said, "Look, we’re interested in the financial outcome of the company obviously, but we really want you to have an impact on the climate as quickly as you can, and do what you need to go do." So we’ve got a unique set of investors.
B&W: What kind of arrangement was made for a tech idea coming out of a university and then converting it to a commercial product?
TS: We have an exclusive license to the foundation patents that have come out of Rutgers and we’ve complemented those with a dramatic number of patents that are really designed to take those core patents and make them work.
B&W: Similar to how MIT takes a cut of their professors’ work?
TS: Every University seems to be doing it a little bit differently, and that whole process is evolving right now, and we’re evolving in our conversations with Rutgers... What’s the best way to be able to participate in our success and help extend that success?
B&W: What is the principle concept that differentiates your cement process from, say, Portland cement production?
TS: The one thing that we figured out real quickly was that the fastest way to get the technology adopted was to use as much of what the industry is currently using as we could. So for the cement manufacturing process, can we use their existing equipment. Can we use the raw materials that they have today and then be able to synthesize some kind of cement from that?
And that’s what our engineers were able to do. We use exactly the same raw materials, the same kiln; we just changed the recipe, and in doing so, that recipe change has quite an impact on the environmental footprint. We’ve measured it at commercial scale to create about a 40% reduction in CO2 and a 30% reduction in energy -- that’s a heck of a lot less coal going up the stack. Our partner LafargeHolcim feels like they can make this cement anywhere in the world in just about any kiln. So we’ve got the cement well in hand.
B&W: So you can just slot your production into any existing plant so to speak?
TS: Exactly. The challenge is how do I keep the “peanut butter away from the chocolate”? I don’t want my OPC and my Solidia cement mixing, and so the only challenge that they have -- I say “only” like it’s simple -- is to manage the supply chain. How do I make sure I have a clean silo? How do I make sure it’s a clean truck? Until they get to the point where they can make mostly Solidia cement as opposed to Portland cement. The way that our product works is that it basically has infinite shelf life because it doesn’t react with water. It only reacts with CO2; so they can batch produce our cement now and store it indefinitely. We’re still using cement that we produced in 2014!
B&W: What are some of the struggles that you have had getting the existing industry to adopt the product?
TS: Well the thing about the industry is that it’s about a couple thousand years old. There hasn’t been a fundamentally new product in about 200 years. Portland cement as we know it was created in about 1845, and the process really hasn’t changed that much. Certainly the chemistry has not. So when you’ve been using something like that for a long time, you’ve got to prove everything. And so people want to make sure that the concrete is going to do what they want it to do and expect it to do.
I think we’ve cleared the hurdle where we’ve been able to demonstrate at commercial scale that we can make the stuff, and when we do make it, it works the way that you expect. So now the challenge is, how do we get these plants converted quickly so that we can get the product into the market the way that we want to?
B&W: Do you anticipate making plants from scratch or does that not make sense?
TS: I think there are going to be markets where making plants from scratch will make sense. By and large we’re trying to take advantage of the existing footprint and get these plants to convert to something new. The flexibility that the technology gives you means that you’ve got a lot more options. People have been trying to carbonate concrete for about 40 years because they knew it would create a more durable and stable product… and they just couldn’t do it. And now we’ve figured out a way to do it. The entry into the concrete industry has been pretty open. It really is a question of how quickly can we get them up and going, and can we find enough CO2 to meet the demand that we have.
B&W: Do you have to buy CO2 from smoke stacks. How do you get the stuff?
TS: We get it the same way everybody else does. Right now the largest industrial consumers of CO2 are people like Coca Cola, Pepsi, and the food industry. Most CO2 today is effectively generated from waste flue gas. In the UK, the second largest supplier of CO2 is a whiskey distillery in Edinburgh! So you take that, capture it, compress it, clean it and ship it. Right now we buy the same CO2 that gets used by Coca Cola and those guys.
B&W: It’s pretty much a commodity then?
TS: Yes, and in the future we don’t need clean CO2. You can put one of our plants next to a waste source and just pump it directly into the process, and our process is just as happy. So I think the challenge as more and more companies focus on getting rid of their CO2 is being able to put the platform into place and “matchmaking” if you will, to match those sources with companies like ours that are actually going to use quite a bit of CO2.
B&W: You’re making landscape and paver products right now, but what are some of the future products that are coming soon, and then down the road, is it castable?
TS: Our mission as a company and from our investors is that we develop technology that can do everything, so we can go into every application out there. So we started with pavers and blocks because, quite frankly, they have the lowest code hurdle. We’ve proved pretty quickly that the pavers are good pavers and should be used, but we’ve worked with all kinds of different applications from rail road ties to hollow core extrusions to architectural precast and exteriors. We do have a castable ready mix offering that we’re testing right now, and we expect that to be in the market within the year.
B&W: Back to your funders, you have a cheerleader way in advance with KP, but I see that there are a lot of energy companies on board. What is their motivation to invest in you?
TS: Our investors come in petty distinct batches. We have folks that are VC, startup-based companies like Kleiner Perkins and Bright Capital. Other investors are the folks that know the industry and know that evolution is required like LafargeHolcim, Air Liquide and BASF. Then we have some of the oil and gas companies like BP and Total and the Oil and the Gas Climate Initiative that have a lot of CO2 and are trying to figure out what to do with it.
There are not that many applications that have markets associated with them with the appetite for the CO2 volumes they are trying to get rid of, and they are actively working to find ways to reduce their footprint, so we line up well with them. We’ve got really knowledgeable, patient money investors that are hoping that we are one of the solutions to the climate issue.
We’ve been charged with developing a technology that’s ubiquitous… that we can use anywhere in the world. It’s a huge market.
B&W: Back to the fundraising and maybe a marketing question. When you court and investor, or maybe they are courting you, what kind kind of dance or show or presentation is that?
TS: The biggest challenge we have is getting people to understand that there’s a difference between cement and concrete! You laugh but most people don’t know that there’s a difference. You start by saying the cement’s the glue that holds concrete together and then you go from there. And the investor really dictates the rest of the conversation. The companies that are in the industry really want to get into the technical details... How it works and how do you prove it? And other investors are really focused on the environmental impact and want to understand how we can actually do this.. Prove it to me!
For us that’s very easy. You can take a piece of our concrete and do a simple test and understand exactly how much CO2 has been effectively destroyed and turned into something else. We can prove it! Some of the environmentally aware cements and concretes on the market have people that talk a lot, but can they prove it? We’re very comfortable that we can stand in front of anybody and show them exactly how much CO2 we’ve either avoided emitting through the manufacturing process or that we’ve turned it into something else that’s useful and is never coming out again.
B&W: What other things do you and your team do to spread the gospel?
TS: We’ve spent most of our time focusing on spreading a gospel that’s based on data, facts, and proven experiment. We can now go out to the industry and show them that we’ve been able to do what we claim we can do. For this industry that’s critical. You’ve got to prove you can make it. You’ve got to prove the product's good. You’ve got to prove that it meets specifications and you’ve got to prove from a business standpoint that its commercially viable. Because it’s wonderful unless nobody can afford to buy it. We’ve been able to prove that, from a business perspective, this is more commercially interesting than what they’re doing today.
We’re starting to get out a little bit more and speak to organizations that are focused on policy. What policies do you put in place to encourage the use of technologies like ours, and the development of technologies like ours?
A lot of people signed the Paris accords, or the Council Affairs in the U.S. This is about agreeing to figure out what to do, but in a lot of cases they don’t know what to do. Finding a technology that takes CO2 and actually does something with it that effectively destroys it is very rare. We’re working with them to understand what changes need to be put in place to encourage the use of technologies like ours.
I was talking with one of my guys earlier today that has recently been in France and because our partners Air Liquide capture the CO2 from waste gas from inside the flue, they don’t get credit for capturing it... If they had caught it a centimeter above the top of the flue it would count! So there are so many antiquated codes and policies that we’ve got to change. We’re finding that governments are very open to listening to what we have to say and taking advantage of some of what we’ve learned.
B&W: This is obviously global, so that’s a big effort.
TS: Yeah, I spend a lot of time in airplanes.
We’ve been charged with developing a technology that’s ubiquitous… that we can use anywhere in the world. It’s a huge market, and everybody takes it for granted but it is getting a lot more tension from the industry because of the carbon footprint. We think in the future that they’re going to get noticed for the solutions that they’re bringing along … We’re pretty psyched to be part of that. It’s kinda fun!
Tom Schuler is the CEO of Solidia Technologies and although he graduated as a mechanical engineer, he has not been allowed to touch any buttons at their facilities.