In this week’s episode, we explore the world of cement. Concrete is the second most consumed material on earth behind water and is essential to the infrastructure that will enable the transition to renewable energy. But producing cement, which is the material that glues concrete together, is incredibly carbon intensive. As CEO of Fortera, Dr. Ryan Gilliam looks to nature and how coral and shells are strengthened by imbedding ambient carbon. Fortera’s first plant, in Redding, California, will come online by the end of 2023 and Fortera cement is construction ready. Throughout the conversation, Dr. Gilliam discusses how he partners with existing concrete suppliers, why the first iteration of Fortera failed to gain traction, and how he has built a business savvy team to bring Fortera cement to market.
In this week’s episode, we explore the world of cement. Concrete is the second most consumed material on earth behind water and is essential to the infrastructure that will enable the transition to renewable energy. But producing cement, which is the material that glues concrete together, is incredibly carbon intensive. As CEO of Fortera, Dr. Ryan Gilliam looks to nature and how coral and shells are strengthened by imbedding ambient carbon. Fortera’s first plant, in Redding, California, will come online by the end of 2023 and Fortera cement is construction ready.
Throughout the conversation, Dr. Gilliam discusses how he partners with existing concrete suppliers, why the first iteration of Fortera failed to gain traction, and how he has built a business savvy team to bring Fortera cement to market.
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Episode Recorded August 9, 2023
Chad Reed: I'm Chad Reed.
Hillary Langer: I'm Hillary Langer.
Gil Jenkins: I'm Gil Jenkins.
Chad: This is Climate Positive.
Ryan Gilliam: At the end of the day, what we are trying to do is making sure that we can provide a greener cement to the market at the same price point as traditional cement. We think that that's crucial for it to actually be adopted globally on a large scale to have a meaningful impact on CO2.
Hilary: We live in a concrete world. Concrete is the second most consumed material on earth behind water and it’s essential to a lot of the infrastructure that will allow us to transition to renewable energy. But producing cement, which is the material that glues concrete together, is incredibly carbon intensive. As CEO of Fortera, Dr. Ryan Gilliam is bringing shovel ready low carbon cement to the construction world.
Hilary: Ryan, thank you so much for joining us on Climate Positive today.
Ryan: Thanks so much for having me.
Hilary: Before we get into Fortera, I'm curious about your background. I understand that both you and your co-founder, Mike Weiss, are PhDs and you seem really drawn to the science of climate innovations. You personally hold over 100 patents and Fortera is actually the third successful company that you have started. What initially drew you to this career in climate solutions?
Ryan: You know, probably was a combination of the perfect storm back in the day. I had a really inspirational professor when I was in my undergrad who was in the hydrogen fuel cell space looking at better ways to make energy. After taking that undergrad course with him, I joined him for my grad school, did my PhD under him, again, in that space of really looking at energy alternatives and trying to look at how to impact the climate.
I think coupled with the timing where An Inconvenient Truth had come out right around that same time as well and really seeing the impact on CO2. You had those two things happening at the same time when I then got a call from California from a company trying to solve CO2 in the cement world. All that together really drove me to take that leap and leave Canada and move across the country to join the startup world.
I'd say that career-wise now for me, everything's been focused on a lot of these industries when the technologies were developed. It was before things like CO2, and energy efficiency, and wastewater were really a focus. Knowing now what we know, I view really all these technologies from the perspective of, if we were to reinvent the technologies now or do these technologies now knowing what we know, what would we do differently? That's really what's driven me to start a company in the chemical space, in the energy space, and in the material space, the cement space.
Hilary: Fortera's initial iteration was not ultimately successful and so you had to reinvent the model. What did you tweak so that you have Fortera's current success?
Ryan: Yes, so in the original company, economics were a secondary thought to some extent. It really was because there was a view that CO2 would be worth a lot to solve, and that's what would drive adoption, and there'd be regulations put in place. I still think that that's 10 years on now or 15 years on now that that is happening more and there's more of a focus on CO2 and our regulations. A lot of that's going to be a benefit to getting these technologies adopted, but at the end of the day, the reason why cement is so used is because it's a low-cost great building material. If you can't keep it as a low-cost material, I just don't see how any technology would be adopted broadly just for necessarily the green side of it.
The difference really between Calera and Fortera is we're using the same core technology that we'd already proven out, but a very different approach. Rather than trying to compete with the cement industry, replace the cement industry, we came at it from the perspective of, if we actually partner with them, leverage everything that they do so incredibly well from, again, the feedstocks, to infrastructure, to logistic sales, leverage all that, but put our technology in alongside them. That's really what's enabling us to get to these lower costs to be able to produce a- -product that can be used in the market competitively. It's not really a fundamental change on the tech itself. It's a fundamental change on the business approach and how we fit within the cement ecosystem that had to change.
Hilary: That makes a lot of sense. That's incredible how just that shift in the approach can dictate the outcome.
Ryan: Well and then one more thing maybe that’s worth mentioning is, so myself and the co-founder, Mike Weiss, the thing we say, and we both reviewed a lot of companies over the years, we've been involved in a lot of different techs and especially in clean tech, there's a general-- I find people have a comfort in complexity. The more interesting, the technology or things that you need to invent or try and do to scale up, a lot of times that gets a lot of interest and focus. The challenge with that is it means you're really trying to scale unproven things that aren't clear exactly how they're going to work at scale and whether it'll be economic, and so we really come at it from a different perspective.
If you actually look at the Fortera process from a process unit perspective, almost everything we're doing is effectively off-the-shelf equipment that's already being used in other industries, already proven to scale, already proven to be economic. Mike and myself come at it from that perspective of the more we can simplify the tech, the more we can simplify the overall process, the easier it's going to be to scale, the easier it's going to be to get to these economic numbers. That's a little bit and combative with I think the general typical mentality of these companies. You want to have something that's really cool tech, that's so difficult and different. That's what people are investing in.
Hilary: Totally disrupt everything.
Ryan: Exactly, and in an original Calera, everything we did was disrupting. Even if we got a process unit for absorbing CO2, we went down the road of designing completely new tech and trying new startup companies’ tech that was out there, whereas the reality is a lot of those things had been solved. By using just known tech, we were able to really reduce costs and how we did things.
Hilary: With Fortera, as you noted, it addresses cement, and this is an incredibly carbon-intensive industry, accounts for about 8% of global carbon emissions. At the highest level, how does Fortera work?
Ryan: Yes, so cement is the glue in concrete. I think that the challenge with the industry is cement accounts for about 90% of the CO2 associated with concrete production. In traditional cement, you're taking limestone as the main feedstock. If this is calcium carbonate rock, which is 44% by weight CO2 embodied in that rock. That's the main feedstock, you put it into a kiln, you heat it up, and you lose that CO2 or that 44% of the weight to CO2 emissions into the air, which is why cement is so CO2 intensive.
The interesting thing is when you look in nature and take your cues from nature, the exact opposite happens. If you look at how coral reefs form, or how shells form in nature, you actually capture CO2 and make a reactive form or a cementitious form of that same starting rock that normally goes into cement. Instead of then emitting CO2, you actually now have 44% of the weight of that cement you're making actually being CO2 that's captured.
That's really what we did, is we figured out how to take a process that exists in nature for really only fractions of a second, but do it in an industrial way where we can make now this reactive form of that same starting rock that can be used as a cement.
That's really, I say, the bend on Fortera, the difference with Fortera versus what we've tried before, and I think, frankly, what other people are doing as well. It's everything in the company is from that viewpoint of how do we make sure we can actually do this economically so it'll be adopted broadly? I think that's fundamentally the biggest challenge. Cement's a 4 billion tons a year market right now, so if you want to have a meaningful impact on CO2, it means you need to build your technology or roll out your technology globally to all of these plants to have that impact.
Hilary: What is the partnership like with these plants?
Ryan: Yes, so maybe I can answer this in two parts. First, it is for us really about focusing on fitting in within the existing cement ecosystem. Actually, if you look at the Fortera logo, there's a plus and a T, and the reason for that is we view ourselves as an additive solution to the cement ecosystem. That means for us, we're leveraging the same feedstocks they already use, we're leveraging their infrastructure, so the trillion dollars’ worth of infrastructure from quarry all the way through to the kiln. We're leveraging all their back end logistics and sales, because the reality is these industries have done a really good job of driving down costs, making a building material that's really important for the built environment, and doing it in a way that is cost effective.
We don't want to have to try and recreate the wheel. We don't want to have to try and compete with that. By leveraging all of those things that they do really well and giving them an opportunity to bolt our process on the back-end to reduce CO2, that's really what helps drive the economic benefit. And I think this also was really driven, I think, the cement companies, lime companies to be interested in what we're doing is that they see how they can still continue to use and do everything that they do well, they still control from feedstocks all the way through to product on the market. They're still the ones putting it out to customers, and owning all those relationships, and getting the value for doing that, but now they can do it in a way where, again, we're an additive solution alongside them to help them start reducing CO2.
I think the other piece that's resonated well within the cement industry is we also give them a pathway to getting to net zero. We can start by doing what they call a supplementary cementitious material, but we do a partial replacement of their cement to give them CO2 savings, get people comfortable with the material to get material into the market, but we can go to higher and higher percent replacements over time. We work alongside other SCMs or supplementary cementitious materials that are on the market to get them to higher and higher CO2 reductions.
Our technology works really well with green energy integration, and so over time, by doing green energy integration, by going to higher percent replacements, they can actually get all the way to a net zero cement, still leveraging their feedstocks, their infrastructure, and their back-end logistics. Because of all that and fitting with that ecosystem, that's why we have had really positive discussions to date. We’re in that process of working through now the first commercial plants with partners.
I say that probably the other piece of it, maybe that's worth pointing out here is this has been a journey to get through. The joke I give people, but it's not really a joke, is the reality is everyone wants to be first to be second with new technologies. The first plants always cost more, they're less efficient and so it's easier for a company to say, “We'll sit back, watch, see how everything unfolds, see how the process works, and then we'll be online to do a plant.”
Figuring out within these industries, and I've had to do this across all the companies I've founded, but figuring out how to work within these high CapEx, low margin industries to get people actually interested in being first adopters is a customer discovery journey where you really need to figure out what are their pain points, what things can you solve for them, what would be the drivers for them to want to be an early adopter of the technology. That really comes down to meeting with really all the industrial players, understanding, again, what are some of the pressures that they're feeling, whether it be regulatory, or product performance based, or market driven. With that, then really craft a business model that resonates with them.
We've gone on this journey for years now of really trying to understand how best to bring our technology to market. I think that we've been just as creative now on the business side as we have been on the tech side in that we have a business model that resonates well with the cement partners in that really, we're effectively a project finance company similar to how- -wind and solar need to be project financing, but by doing that, we can bring these projects to the cement players. They don't have to outlay capital to get these projects built, so they have the ability then to get more product, to reduce CO2 per ton of product, to still make money on that product, so it's really a financial win for them.
Then from our side, we leverage a long-term off take with them to be able to do the project financing. It's through that discovery in terms of what the customers want. We've also built our team relative to that.
Hilary: What do the plants actually look like when they have the Fortera technology? Because you're able to tap into the CO2 produced from the kiln, correct?
Ryan: Definitely can, and that's one of the key things, is being able to add our technology on at a cement plant frankly without impacting their current operations. It's going to be very hard for anybody to build a new plant if they have to shut down operations for a few years in a build-out. Our plants are really bolted onto the back-end. We still take their limestone in, we calcine that to make lime and CO2. We recombine those in our process to make our reactive form of carbonates. Then we blend that with their material at the back-end.
To some extent, our plant sits adjacent to their plant, but we tie into their feedstocks, we tie into the CO2, and then we tie into the back-end, the blending system to put the product out to market.
Hilary: Even though it's not directly carbon sequestration, once the cement turns into concrete, the carbon is captured in there, correct, and it can't move even if the building comes down?
Ryan: Yes, at the end of the day, the mineral we're making is basically a reactive form of limestone. If you look out at, you know, limestone is a very common rock, that's why it's usually used in cement, so if it rains and everything else, nothing happens to that rock. The CO2 is going to go nowhere. It's permanently stored through carbon mineralization.
Hilary: Then when the product actually comes out and you have the cement that is used for the concrete, what does that look like? I have two little boys and so I have spent a lot of time loitering at construction sites and scoping things out. Would we be able to tell that it's any different, and would the construction workers know?
Ryan: No, and that's really been the focus from day one. Cement is a 4 billion ton a year market. It goes into concrete at say 40 billion tons a year, and so then, at the concrete level, you have a considerable number of contractors that are then working with that. The challenge we've always seen is if you create a new product that doesn't work the exact same as it currently does, which is really the strength development, how fast it sets up, how much it flows. If you don't meet those same criteria, and you have to train the whole industry how to use the product differently, getting adoption is going to be difficult.
Our view or mantra from day one on the product development side has always been make sure at a minimum we're meeting those same really three characteristics of set time, flow, and strength so that at the end of the day, when the contractor uses it, aside from reading on the label that it's Fortera fortified and it's a lower CO2 embodied cement, they really shouldn't see any fundamental difference in working with it.
Hilary: So Fortera is ready to be used in skyscrapers as a blend, just not 100%?
Ryan: Yes and our first smaller commercial plant will be built by the end of this year and putting product to market the beginning of next year. That product will be going into general use cement concrete application. Early next year, I’m excited for the fact that people will be using it in buildings, and people will be using it in roads, and it will be out there. We actually, in the Calera days, when we first developed the technology so that this is the prior company that first really went through this, we had a pilot facility. We were making one to two tons a day of the product and so we put our product out into real world applications.
We did office buildings. We did a number of demonstration projects. We're 13 years in now and those projects are still out there. They've held up over time. We've actually had the privilege of being able to go back and core some of those and send those off for testing to show that the materials held up over time. I think that's one of the benefits we have as well is, this is more by luck, but I think when the technology was first developed almost 15 years ago, it was early in the CO2 movement, and there was also just a general skepticism of bringing a new material into the market and what will it do over time. We now have that luxury that we have that material out there for as long as we have and know that it does stand up over time.
Hilary: Fantastic. Congratulations on the new plant.
Ryan: In terms of-- and again, this is sticking with really the views of the company and how we're developing the technology, but it's always going to be in partnership with cement companies, lime companies, again, leveraging everything that they do well from feedstocks through infrastructure. We're partnered alongside CalPortland in Redding, California. We're right adjacent to their cement plant and we're tied directly into their CO2 stack taking CO2 from their process.
But at the end of the day, what we are trying to do and where we're going with the technology is making sure that we can provide a greener cement to the market at the same price point as traditional cement. We think that that's crucial for it to actually be adopted globally on a large scale to have a meaningful impact on CO2.
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Hilary: I understand that you have a lot of momentum right now. You've been doing a lot of hiring and also just promoted Kas Farsad to chief strategy officer. What do you anticipate he'll be focusing on?
Ryan: Previously when I was talking about the fact that we've had to go through this journey of really understanding our customers, understanding what are the pain points within the cement industry and what would get them to adopt technologies early, Kas was actually one of the original inventors on the cement that we're doing. So he came from the material science background, but then has moved over to his MBA and gotten into the business side. Because I think, as he likes to say, you can have a great technology, but unless you also have a great business plan and a great strategy around it, the technology won't move anywhere.
He's been instrumental in the last few years of doing that customer journey and trying to understand, again, what those pain points are, and building up a business model that has got interest from the cement industry and the lime industry to want to work with us. I think it's really, in promoting him is a recognition of him being a thought leader in this space and understanding what it really takes to, again, to move from a technology that's great in the lab to something that's actually wanted to be adopted and commercialized by these big partners.
He's going to continue to focus on what he's done so well, which is really understanding the cement ecosystem, understanding the players, understanding what's driving them to make decisions and do stuff in the sustainability space and really build these partnerships so that we can take it from the plant in Redding, to our first commercial plant, to broad rollout.
Hilary: Do you anticipate focusing domestically initially?
Ryan: I'd say similar again to wind, solar, electric vehicles, having incentives early on to help drive adoption is important. Eventually, these technologies need to stand alone and be economic in their own right, which is really what all those have proven out to be and so we're really taking that same cue, that same direction. We're looking to areas that are going to be easier for companies to make the decision to adopt our technology, which means there are incentives, whether it be around CO2, whether it be around buy clean or premiums around green products.
Right now, I'd say that domestically is definitely our focus. The Inflation Reduction Act was a great piece of legislation that really will enable a lot of great technologies to get commercialized. Between that and things like the Department of Energy Loan Guarantee Program, there's just great things set up right now in the United States for bringing these type of technologies to market, so we will be focused on really those regions that have those incentives in place first.
I think places like Canada have done the same, there's things in Europe as well, but globally, I think countries are waking up to things need to be done differently. I think they're all navigating their own pathway in terms of what those incentives are going to look like. We'll follow that trend with those countries early on. Now, eventually, it'll get to a point where after we have multiple plants out there and we've shown that we can meet the same economic targets, really, then at that point, we should be able to go, frankly, anywhere that's interested in providing this as a solution, not just where incentives are in place.
Hilary: I was surprised to learn that the U.S. is actually a net importer of cement. Do you think that that will change over time?
Ryan: I mean, the US right now produces about 110 million tons a year of cement. On the coast, you definitely get imports still of cement, but frankly, to me, that's really more of an economic thing than anything else. You can import on the coast, pretty decent price point. Actually, if you look at the cost of cement across the US, it's higher in the middle of the US where you don't have the ability to ship in cement.
Again, it's a high CapEx, low margin industry, so it's always going to be driven by economics. If you're going to trade off building a new plant on the- -coast at $500 million to $1 billion versus being able to buy imported cement at much lower costs, I think it's hard to justify putting a new plant in place. What we'd like to see and what we specifically are doing is our solution really is it bolts on the back-end of a cement plant and gives them the ability to make more product out of that same plant.
I'd like to believe that we'll give really these companies an opportunity to expand their capacity without having to put that capital in the ground themselves and so that we can meet some of these import requirements with a greener cement domestically.
Hilary: I want to get back to Fortera's plans to get to net zero carbon cement. What does that look like? You'll be increasing the total percentage of Fortera products in the final product, but what either scientific hurdles or economic hurdles have to be addressed to get there?
Ryan: There are a few different pathways for us to get there. What I would say right now is that a lot of green companies or green technology companies are reliant on green energy to really be green. The challenge with that is I think a lot of great strides have been made in green energy and it's becoming more prevalent and the price point of green energy has gone down, but generally speaking, most of the sources, wind, solar are still intermittent power. There's a lot of great companies working on energy storage to solve for that intermittent power, but right now, that hasn't been solved, at least not economically solved.
The core of our technology right now is we're still using the same fuel that's already being used at the cement plant, so whether that's coal or natural gas or other fuel sources. The benefit of our technology is because we're only calcining the limestone, and I'm sorry, this gets a little bit probably too into the weeds technically, but it's a lower temperature process than traditional cement where you need to get to certain mineral phases and have that temperature in there.
Hilary: So the kiln doesn't actually have to get as hot?
Ryan: Yes, so our kiln would run at about 950 degrees Celsius versus 1,450 in traditional cement. Because of that, you have the ability to use electrification in kilns. With the movement towards green energy, as people solve the intermittency challenge with energy storage, we have that ability to really integrate with green energy at the kiln level to solve that piece of the CO2 puzzle as well. Once we solve that or integrate with green energy, and it could be green fuels as well, but once we integrate on the green side, that means our product, for every ton of product we make, we are zero CO2 emissions because we don't have the chemically emitted CO2, because we've captured that and we don't have the CO2 from the fuel side.
That means that for every ton we make, it is a net zero product, and so then the higher and higher percent replacement you go, all the way to 100% our product would be a zero emission cement.
Hilary: That's exciting. How far off do you think that is?
Ryan: I think from a product perspective, it will take time to get the industry from a regulatory side and just an adoption side to want to go to those standalone products. That will be a journey of pathways, but that will take time for general use cement applications. I think that there's interest already from the market in using our 100% product in specific end-use applications, where there's clear regulations in how the product would work.
We are working with companies right now, looking at 100% our product in specific use applications. I think that that will actually happen more near term, but the broad rollout of using our material at 100% in all use applications, that's going to require regulations to change, it's going to require the market to get more comfortable and adopt to it. Then from our side, we are doing development work to continue to push our product to get to higher and higher strengths and to get it to be really set up from a set time and a strength development time to be more like traditional Portland cement.
I feel like if we can converge and have regulators and industry move and adopt, and we can get our material even closer to what they're used to, we can converge on a point where to get to 100% material out there as general use cases, but this is a 5 to 10-year journey for sure that's ahead of us.
Hilary: We'll switch over to the hot seat. First, when I need to recharge, I--?
Ryan: I actually--
Hilary: Do you ever recharge? Seems like you're working a lot.
Ryan: I'm kind of probably an unusual one, but I actually really, I love technology. I love seeing what entrepreneurs are doing in the space. A lot of times for me, recharging is actually just looking at what other people are doing or other ideas that are out there or doing tech reviews on the venture side, just to keep my mind active and see what's out there. Because, I mean, really, when you look at the number of companies and what people are doing, it's pretty inspiring to see what's happening in this space right now.
Hilary: Great. Helpful advice a mentor once shared.
Ryan: I've had a lot of great mentors along the way that have really helped me understand how to actually take a great idea and take that idea to actually something that you can scale and turn into something. What I had to learn early on was that really, to make anything successful happen, you really need a team to do it. One, figuring out how to actually build a great team is important, but then two, really learning how to listen to your team, take advice from the team, figuring out how to navigate all the different pieces of advice you get to actually come out with a clear path forward I think is one of the hardest parts.
Because as you keep growing, and with Fortera now, we're 70 people and we have people that are experts in a whole range of different areas from products, to process, to scale up, to operations, to project finance, to marketing, branding companies. You have so many different core expertise in the company. Figuring out how to actually take all that advice, use it in a way that's productive to keep everybody on the same path is-- that's definitely where I had to develop the most early on, because I was a tech guy at heart. I loved being in the lab creating new tech, but the tech is only the one piece of it. You have to bring the rest of it together. Figuring out how to work with a team and actually take all those views in is really probably the thing I had to learn most.
Hilary: Given Fortera's momentum, it seems like you figured that out.
Ryan: I've definitely been privileged in that I have been able to work with a lot of great teams in my career. That's frankly what inspires me to come to work every day too, is when you work with great people that are really- -interested or bought in to the mission and what we're trying to do, it makes it a great workday.
Hilary: Then outside of cement, a climate solution that I'm inspired by is?
Ryan: I would say I'm one of those people that are really interested across the whole climate tech space. I worked for a while as a venture partner at a VC firm focused on sustainability as well. That's really what recharges me as well, is looking at the space and what people are doing. I think that there's a lot of interesting stuff happening on energy storage. I think there's a lot of interesting stuff happening in direct air capture. I think there's an interesting movement around direct ocean capture now and what can be done. Then also just even electrification and cleaning up of things like steel and some of these other big industries.
I think there's a lot of great things that are happening out there right now. I think they're all, Fortera included, we're all going to face the same challenges of, to be successful, it really is about scaling and driving down economics. I think it'll be interesting to see over the coming years in climate tech, which ones are really able to get over that hurdle and get to scale. The great thing is there's a lot of options out there. Now it's figuring out how to get to that next stage beyond idea to really a commercial product.
Hilary: Final question. To me, climate positive means?
Ryan: I think for me, climate positive is really just making sure, or really looking at climate first with really anything that people are doing. Everyone can have an impact on the climate. It could be as simple as bringing your reusable bag when you go out shopping versus taking a plastic or paper bag. For me, climate positive is just making sure that at the back of your mind, there's always just a viewpoint of, if you have options, what option is going to be better overall in the end from an environmental perspective.
I think if everyone approaches the climate in that way, we can make a lot of strides in the right direction because it's going to take a number of solutions. Sometimes I hear from people that, “Well, look, that's not going to impact the overall climate that much by me doing this versus that,” and I think that's the mentality that I'd love people to change. Climate positive means just if you have that always at the back of your mind of making that decision and taking a choice that's more environmentally friendly, that helps everybody.
Hilary: Ryan, this has been so fun talking with you. Congratulations on all of Fortera's successes and really looking forward to seeing how it continues to grow and scale.
Ryan: Great. Thanks so much for having me. It's been a great conversation.
Gil: If you enjoyed this week’s episode, please leave us a leave a rating and review on Apple and Spotify. This really helps us reach more listeners.
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I'm Gil Jenkins.
And this is Climate Positive.