Startup Series: Sublime Systems
Today's guest is Dr. Leah Ellis, CEO and co-founder of Sublime Systems, which is using electrochemistry to make cement and in doing so claims to have a pathway to reduce the emissions footprint of cement production by 60-90%.
Cement is the most abundant man-made material on earth, with billions of tons produced yearly. So far the primary pathway to reducing its emissions footprint is via point source carbon capture otherwise defined as collecting the greenhouse gasses that are emitted as part of the process of breaking down limestone to make cement. But those gasses are diffuse and mixed in with a bunch of other stuff which makes capturing pure greenhouse gas streams hard and expensive. C mmMJ Heating the limestone up to the point of it breaking down requires extremely high temperatures and coal.
Dr. Ellis and Sublime took a totally different approach to the problem. Instead of heating up the limestone, the company figured out ways to use chemistry to break it down, even if that requires a lot of electricity. Leah and her co-founder used their backgrounds in EV battery chemistry and have invented a method that essentially turns a cement plant into an electric-distributed energy resource.
This conversation with Cody and Leah is an eye-opener as they spent a bunch of time digging into how climate solutions can be tackled by outsiders who apply cross-functional learnings to big problems. Leah is incredibly knowledgeable and her unique experience in the "electrify everything" movement highlights what that might mean at an industrial scale. Enjoy!
Get connected:
Cody Simms
Leah Ellis / Sublime Systems
MCJ Podcast / Collective
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Episode recorded on October 21, 2022.
In this episode, we cover:
[3:14] An overview of cement and associated GHG emissions
[9:52] The role of coal in making cement
[11:44] Relevant terminology
[14:22] Different types of cement
[16:12] Leah's background in EV batteries and electrochemistry
[18:52] Her co-founder Yet-Ming Chiang
[22:36] How the idea of electrochemical cement came together
[27:01] An overview of Sublime Systems
[30:41] The company's inputs and outputs
[33:18] Legacy cement manufacturers and their path to net zero commitments
[38:12] Alternative feedstocks to limestone
[40:41] The big catalyst for Sublime Systems
[44:23] How Leah is talking to legacy cement companies and Sublime's potential business models
[47:31] How companies can pay for green premiums
[49:15] Need for external measurements for carbon reduction and LCAs
[51:43] Sublime's production today, their future roadmap, and open positions
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Jason Jacobs (00:01):
Hello everyone, this is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:05):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:15):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:26):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:40):
Today's guest is Leah Ellis, CEO and co-founder of Sublime Systems, which is using electrochemistry rather than heat to make cement. And in doing so, has a pathway to reduce the emissions footprint of cement production by 60 to 90%.
(00:54):
Cement is the most abundant manmade material on earth with billions of tons produced each year. So far, the primary pathway to reducing its emission footprint is via point source carbon capture. Collecting the greenhouse gases that are omitted is part of the process of breaking down limestone to make it, but those gases are diffused, mixed in with a bunch of other stuff, which makes capturing pure greenhouse gas streams hard and expensive, and we still have the heat problem. Heating the limestone up to the point of it breaking down requires temperatures so hot the coal has been the default solution. Leah and Sublime took a totally different approach to the problem and said, "Hey, with renewables coming online, there's going to be an abundance of cheap grid power in the coming decades. So what if instead of heating up the limestone, we figured out ways to use chemistry to break it down, even if that requires a lot of electricity in the process?" They use their backgrounds in EV battery chemistry and have invented a method that essentially turns a cement plant into an electric distributed energy resource.
(01:53):
I love my conversation with Leah because we got to spend a bunch of time on how climate solutions can be tackled by outsiders applying cross-functional learnings to big problems, which is exactly what she's doing. And she opened my eyes to what electrifying everything might mean at industrial scale. I hope you enjoy the conversation as well. Leah, welcome to the show.
Leah Ellis (02:14):
Thanks, Cody, happy to be here.
Cody Simms (02:18):
So I am going to learn so much from you today because in my opinion, every climate tech founder is tackling the hard things, but you are tackling like the hard things, incredible amounts of science, incredible amounts of real world physicality to what you do and an incredibly big legacy industry that you're trying to work in.
(02:38):
And so I want to start at the top. We're going to get into your background and how you got into all this and all the stuff we always do on MCJ, but I want to start with just some basic questions because I'm guessing we all know what cement is, we see it in our daily lives all around us, but we don't really know what it is. So maybe just some basic questions to set this stage. The first is kind of an obvious one, I think, even though I don't know I could necessarily define it as what is cement versus concrete, because those two words get thrown about, but they're actually, I think, different things and probably important from a climate context to understand the difference.
Leah Ellis (03:14):
Yeah, cement in short is just rock glue. So I think of it like paper mache where the glue holds all the paper together to form an object and cement glues all the rock together to make concrete. So concrete is 90% aggregate, 10% cement.
Cody Simms (03:34):
So in the real world, the stuff we see around us is concrete, but cement is what makes it happen. Is that the right way to think about it?
Leah Ellis (03:41):
Exactly, yep.
Cody Simms (03:42):
Okay. And then I presume then the cement side is the carbon intensive side, the part that is 8% of the world's greenhouse gas emissions, roughly?
Leah Ellis (03:52):
That's correct. So to make cement, you have to activate the minerals and that's an incredibly fossil intensive and CO2 intensive process. It happens at very high temperatures.
Cody Simms (04:06):
And in terms of just the scale of the problem, hopefully that 8% number I just threw out is roughly correct as far as we all know, and we're talking billions of tons of this stuff produced per year. I think it's the most abundant manmade material on earth, which is kind of nuts. We basically are calcifying the service of the earth with this stuff. Maybe give us a little bit of detail of just how abundant it is, where it's produced, what the state of the industry looks like.
Leah Ellis (04:36):
Yeah, like you said, we use more cement than any other material besides water. Cement is one of these weird things where it's everywhere around us. It almost envelops us at this very moment, but it largely goes unseen, but it's such an important material and incredibly durable. So when we think of climate resilience and adaptation, it's going to mean more cement. So cement today is made in enormous fossil fuel fired kilns because it's such a heavy material. It's a very local market, so cement normally doesn't travel very far to get to market. So there's a hundred cement kilns in the US that produce our domestic supply. These kilns are just enormous. It's staggering. So an average small cement kiln produces about 1 million tons per year. So do you know what an enormous mountain of material?
Cody Simms (05:31):
The main material that goes into making cement, I believe is limestone, which I've learned from a number of other interviews I've done is the rock that is basically embedded at the bottom of the ocean, but is also found in parts of the surface rock because it's where prehistoric oceans or seas used to be. And this rock has been through the atmospheric and oceanic carbon cycle. So it's typically fairly carbon heavy rock material. It's used in agricultural process, it's used in a number of things, but it's probably biggest use case I'm guessing, is in the creation of cement. Am I understanding that correctly? Maybe break down... As far as I understand it, the emissions involved is two things. One, heating it up enough to convert it to the materials that are needed for cement. And then two, a chemical reaction that actually breaks the carbon out of it and releases it as CO2. But please, I'm sure you can explain this in much more detail and elegantly than I even remotely understand it.
Leah Ellis (06:35):
You did a great job. Yes, calcium carbonate limestone is a sedimentary rock, and it's inert, you can't use it to make cement. It's not going to set in place. And so to activate its cementitious properties, you have to break that bond between the calcium and the CO2. And to do that in the traditional way is to heat that up to a thousand degrees Celsius or beyond. And at that temperature, that calcium carbonate, the limestone thermally decomposes, and you have the CO2 escaping as a gas contributes to the CO2 footprint, and then you're left with calcium oxide. That calcium oxide otherwise known as lime, hence Sublime Systems, we try to make it punny. So that's where the name comes from. But that lime is a fundamental part of cement that contributes so much to the carbon intensivity of cement because you need calcium to make cement.
(07:34):
Cement is a calcium silicate, and you need the reactive calcium. It's a combination of the very high temperatures needed to make cement. So beyond a thousand degrees Celsius and temperature, which you can't easily electrify at that temperature, it's beyond the melting point of steel. And if you were to electrify it, the radiative heating is not as effective as the convective heating you get with fossil fuel. So that's why, as you said in the intro, it's one of the hardest things to decarbonize because you've got the fossil emissions, which are about half depending on how old and how modern your kilning is. And then the other half of the emissions is the CO2 that comes off of the rock. So the thermal process where you're relying on decomposition, you have to use something that breaks down leaving a gas in a solid.
Cody Simms (08:25):
So not to jump to solutions, but when you hear people talk about carbon capture on a cement facility, they're talking only about that second piece I'm guessing, which is the byproduct of the chemical reaction, which is the CO2 coming off. But it doesn't solve for the heat issue, which I don't know if it's half and half, but it's another good chunk of the emission's footprint of cement. Am I correctly understanding that?
Leah Ellis (08:47):
Yeah, you're right, because it's one of these things that's almost impossible to decarbonize the traditional thermal approach without post combustion carbon capture. So people are trying to redesign the kilns to isolate that mineral CO2 from the fossil fuel CO2. So as you may know, 90% of the cost of post combustion carbon capture is in the purification of CO2 from an impure flu gas that contains a lot of other nasties. And so you can either capture the mixed stream of gases from the cement plant or capture the pure stream of gas from the mineral if you're able to isolate the mineral decomposition from the flu gas stream.
Cody Simms (09:30):
Got it. But you're still dealing with a lot of heat that is itself currently mostly fossil fueled in order to hit the temperatures that you need is what I understood there. And you said it'll melt steel at that temperature. So what is the legacy cement plant even using to generate this amount of heat? Is it itself sitting in concrete? What does the kiln itself look like?
Leah Ellis (09:52):
Yeah, the kiln is a massive tube. So it's like a couple hundred meters long, maybe couple meters in diameter. So big enough you could drive a school bus, stay on the middle of this long tube. It's a tube that's tipped at a five degree angle and it rotates a little bit. So you put your raw materials at the top, they roll down as the tube is spinning. And then at one end of the kiln you have this gigantic flame. I've actually had the privilege when visiting a cement plant to peek through a little window just under that flame and just look into this flaming tube full of molten rock. And so the cement plants are fueled largely with coal.
Cody Simms (10:35):
Hopefully you held your breath when you did that.
Leah Ellis (10:39):
Yeah, I had to use a welding mask as well since it's extremely, extremely bright, loud and hot. But yeah, the temperatures that today's cement is made at about 1,500 degrees Celsius. You need to use coal and you need to use specifically bituminous coal, which is this really high caloric value cement fuel to get to these very high temperatures. And then that kiln is lined with refractive bricks, so different ceramic materials to insulate the kiln from that terrific heat in the middle.
Cody Simms (11:13):
Wow. The coal requirement actually makes me think of straight up backyard barbecuing, which is if you want to get a really good sear on your barbecue use charcoal, you don't use gas just because you can achieve higher heat. So that's a super obvious learning from my own life that I actually helps me understand the problem here.
(11:31):
And then there are a couple terms that I hear thrown around with cement production, clinker, sintering. Help us understand just a few of these process related terms as it relates to cement production.
Leah Ellis (11:44):
Yeah. So cement is a calcium silicate, and so most of it is calcium. And so it's about 3:1 calcium to silica. And so you put it in the kiln. There's two reactions that happen to make today's portland cement. The first reaction is that decomposition of limestone, which is responsible for about 75 to 80% of cement CO2 emission. So once that calcium oxide is formed from the carbonate, then at a higher temperature 1,500 degrees Celsius, that's when the sintering happens. So at that point, the rocks form a partial melt, and that's when you get the reaction between calcium and silicate. It forms a phase called alite, tricalcium silicate. This phase in the cement is only stable at around 1,500 degrees in that partial melt phase. So that's why you have to get to those very, very high temperatures if you're going to make portland cement.
Cody Simms (12:43):
Got it. So sintering is just basically the scientific word for melting rock?
Leah Ellis (12:48):
Yeah, yeah. Yep. There's many, many ways you can melt things in scientific terms, but yes, sintering the calcium silicates together in that step with that partial melt, the flux. And then the next step is you want to freeze that alite phase. So it's only thermodynamically stable at this very high temperature, but if you quench it, so drop it out of the kiln really quickly, you can freeze it in that form. And so that clinker is a little ball of cement that literally goes clink, and it's like a little ball of this semi molten material that falls out of the kiln and is quickly quenched and then ground, and that forms portland cement.
(13:30):
Portland cement was actually invented by accident about 200 years ago in England. The secret behind portland cement is the chemistry. So that ratio between the calcium and silicates and also this obscenely high temperature. So someone just happened to have rocks that had that right chemistry and they heated it extra hot. What they got out of it was a cement that could set really quickly and get really high early strengths.
Cody Simms (14:03):
We hear the phrase portland cement. Are there other forms of cement beyond portland cement? Or is portland just the methodology that ended up winning the day essentially?
Leah Ellis (14:12):
Yeah, portland cement is what we've been using for the past 150 years. In some senses, it is a one-size-fits all, or it has been, especially in the US, a one-size-fits all type of cement. But it's not the only rock glue around. So humans have been gluing rocks in one way or another for millennia. So there's roman cement, which is called a pozzolanic cement, which is one part volcanic ash and then one part lime, calcium oxide. And so you mix those together, and that also forms a calcium silicate with similar hardened properties to portland cement. Then you also have geopolymer cements that are sodium, aluminum, calcium silicates. So just different chemistries, but it's usually always a calcium silicate that forms that really insoluble hard rock glue that you need to hold up the building.
Cody Simms (15:10):
Fantastic. Thank you for humoring me with all of the just level setting questions, but as I've talked to different entrepreneurs, people working in the decarbonization of cement space, I feel like I never have had a whole picture of how all of these factors lay into at least the current legacy system.
(15:28):
So let's talk about you. So you don't have a cement background. You didn't spend your childhood running around kilns, looking down at molten rock as far as I understand it. You have a background in EV batteries and electrochemistry. Your co-founder has founded many companies in and around that space as well, many successful companies. And so maybe talk about your background, your journey, how the two of you met, and I'm going to give a spoiler alert, which is my favorite part of this story is I think so much about working on climate change requires cross-disciplinary learning and how you have taken what you learned in the chemistry of EV batteries and are applying it to this problem of cement decarbonization.
Leah Ellis (16:12):
Yeah, that's my favorite part of the story too. I'm from Halifax, Nova Scotia, so I'm a dual US Canadian citizen, grew up caring deeply about the climate as probably many of your listeners. So it just killed me growing up that we're etching away at the surface of the planet that we live on and impacting all of these other creatures and life forms that we're here to protect. I did a degree in chemistry because I've always had a great sense of adventure too, and chemistry in my mind is the frontier of the unknown. There's so much that you can do. It's a real creative tools that what I live for and what I work for is that light bulb moment when you discover something and you just put two and two together in a way that's never been done before. So that's what drew me to chemistry.
Cody Simms (17:07):
Leah, I haven't heard someone just have that much passion about chemistry since watching Walter White on Breaking Bad, so that's kind of awesome.
Leah Ellis (17:16):
Yeah, I love chemistry. And then I've fell into the orbit of a group of lecture chemists at the university in my hometown. So Dalhousie University, there's really strong group of lecture chemists that are really powerful inventors. And that's what makes me so passionate about chemistries is in inventing stuff. So I started to strengthen the invention muscle. What I was doing in the battery world was quite different from the method and style of inventing that I experienced at MIT. So I was working with a battery group that was a patent factory. And so our IP went first to 3M and then our contract switched and we started developing IP for Tesla. It was very grounded IP development. So we were grounded in batteries and just pushing the edge of the known and improving on the energy density lifetime of lithium-ion batteries.
(18:12):
After my PhD, I didn't want to go into academia. I think that's a bit of a pyramid scheme where you're just teaching kids to be profs and you're not teaching them to do cool stuff. I want to do something before going back to teaching and returning the favor that my professors have given me. And I also didn't want to work in industry, I just wasn't inspired to do that. So I hit snooze so to speak, I won a Canadian government fellowship. It's a banting postal fellowship actually funded by another inventor. So Sir Frederick Banting was the inventor of insulin, and this is his family fortune.
(18:52):
So using this money, I could go anywhere in the world, study with anyone for two years on anything. It was almost no strings attached, which is kind of the beauty of what allowed Sublime to happen. So of course I took that money and I came to MIT to work with Yet-Ming Chiang. He's just a prolific inventor. Not only a very strong scientist, also with a strong sense of adventure and what if, always yes ending things and only working on science that solves a problem, especially a climate problem. And I think that's rare. I don't think a lot of professors really start with that framework of like, "How do I do something useful? How am I going to do something that matters?" And so when we first met, of course he's super busy. At that point, he just spun out Form Energy, a grid energy storage company. And so this was in 2018, a year after he'd spun out Form Energy. We started with the tagline of electric chemical cement.
Cody Simms (19:56):
Just to be clear, he's also the co-founder of Desktop Metal, A123 Systems, some of the biggest names in the battery and manufacturing space out there, right? It's pretty incredible.
Leah Ellis (20:08):
He's a legend. And so Sublime is his seventh startup. Five of the previous six have been gone on to be wildly successful and impactful. So yeah, he knows what he is doing.
(20:23):
Form Energy was founded knowing that the world is electrifying, we have to get to net zero by 2050, and the grid is about 30% of global CO2 emissions. There's a pretty clear path to decarbonization there with renewable energy, but those sources of energy are intermittent. So the tagline that then we worked backwards with was how do we use intermittent energy to make cement? And so the intermittency means that we wanted to do this at ambient temperature so that you could be very responsive to the grid so you could ramp up, ramp down in a way that you can't do with a thermal process that requires pretty constant input of energy and heat.
Cody Simms (21:05):
And if I'm not mistaken, attempts up to this point to think about electrifying cement process were thought about how do you use electricity to generate the heat requirement, which was generally not possible to do for the reasons you mentioned around the melting point of steel, et cetera. Is that generally correct?
Leah Ellis (21:22):
Yeah. So it's just very difficult to electrify at the temperatures you need to calcine and then to make cement. So we just wanted to use our battery toolbox to just see where we could go. So it was very different from the type of science that I was used to doing in the battery fields. Instead of pushing the edge of what was known, we were starting from frankly a crazy idea. Electrochemical cement in 2018 really didn't belong in the same sentence, right? It's very hard for a scientist to draw a line between ceramic materials and batteries. So it was very much a top down approach that was a little bit uncomfortable, that you know, "Hey, I'm just a recent grad from Nova Scotia and here's Yet-Ming Chiang at MIT with five or six previous startups. And so hey, I'm going to see what I can do. I'm going to see if this works." And so we started first by reading Wikipedia articles like just what is cement and like how you started this podcast.
Cody Simms (22:31):
Good. Hopefully our first 15 minutes of the recording can save people that amount of time in the future.
Leah Ellis (22:36):
Yeah, you can go to step two. So after Wikipedias, getting into textbooks and then getting into real scientific articles and start piecing things together. It came together over time and it still continues to be refined our approach to making cement. Maybe if there's one thing that I'd want to pass on to your listeners is that you don't have to be an expert to be an adventurer. I think it takes something else. And I almost feel like maybe you've heard me be cynical up until now about academia and getting a PhD. I am profoundly grateful for the education I've had, but I think there's something a little limiting when you're just having this formal curriculum. It's much more interesting when you're just exploring your interests.
(23:25):
What's inspiring to me is that some of the most prolific inventors of all time who've come up with the most impactful things have not been experts. They're just motivated and smart and they try really hard. I think of the folks that invented the aluminum smelting process that we use now. Aluminum used to be more expensive than platinum because it's not naturally available. And it was two 19 year old boys independently invented the Hall-heroult process for aluminum smelting, which of course now we drink coke out of aluminum cans like emperors these days. But those 19 year old boys and Thomas Edison and all the rest, they were not trained. They did not have the advantage or maybe the disadvantage of a PhD in chemistry.
(24:13):
So I think there's a lot of power in switching disciplines and getting curious, and it allows you to think outside of the box. If I'd stayed in batteries, I think it's possible, but unlikely that I would've had a terrific breakthrough because all of the limitations sort of died into the wool when you become an expert. And I think that's something we overcame by stepping outside of the lines.
Cody Simms (24:37):
At some point, have you felt the need to bring some expertise onto the team or has this sort of outsider perspective continued to work well for you all?
Leah Ellis (24:48):
Yeah, that's a great question. So definitely in the inventive process, that's when I think we were totally unencumbered by the like, "Oh, you can't do that." But since then, sound checking with the industry is so important. And as you know, we've been in stuff for a long time, spun out in early 2020 and have kept our heads down. We've done that because we've been building relationships within the industry and talking to people, like the most respected and successful people in the industry, and trying to get a vibe check on like, "Is this outrageous? What should we be caring about? What's the real deal here?" And that is just so important. I think especially as a startup, you're making really outrageous claims at times and you want to make sure that you're not offending people and you're not going to end up with dirt on your face. And that's really important to me, so balancing that creative freedom with a hard look at reality.
Cody Simms (25:53):
We're going to take a short break right now so our partner Yin can share more about the MCJ membership option.
Yin Lu (26:00):
Hey folks, Yin here, I'm partnered at MCJ Collective. I want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast.
(26:11):
We started in 2019 and have since then grown to 2,000 members globally. Each week we're inspired by people who join with different backgrounds and perspectives. And while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams I've met, nonprofits have been established, a bunch of hiring has been done, many early stage investments have been made, as well as ongoing events and programming like monthly women in climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more.
(26:49):
So whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (27:01):
All right, back to the show. Definitely I have a whole section where I want to talk about what you've been hearing from the incumbent industry. Before we do that, let's actually dive into what Sublime is. So you all brought this electrochemistry background to the problem. You kind of got up to speed on how cement works and you tried to reverse engineer it and build it in the way you know how to do things. Where did you land? What is Sublime?
Leah Ellis (27:28):
What is Sublime? Great question. So Sublime goes about the cement making process in a different way. So it's not a thermal process for cracking calcium off of something else that evaporates as gas. It's an electrolytic extraction process. So we have an electrolyzer that one electrode form a liquid that extracts calcium, so it's low pH and it dissolves calcium. And for that reason, we can use limestone calcium carbonate, in which case it's just like a Mentos and a coke reaction where you put the carbonate into the coke, which is an acid, and then you dissolve the calcium and it releases these bubbles of pure cold, compressed CO2. So the carbon capture element is inherent in the process if you start with limestone.
Cody Simms (28:23):
And is this limestone ground? What does it look like going into your electrolyzer process? It sounds like it's suspended in a liquid. Am I hearing that correctly?
Leah Ellis (28:32):
Yeah, it's ground limestone. And of course there's math you could do and you can make it faster if you grind it smaller, and it would go slower if it was bigger, but it still all dissolves at that pH. So yeah, the beauty of doing it our ways, we don't have to have limestone for our process. We can extract calcium from a number of different materials. That means that we can sometimes get around having that CO2 coming off of the limestone. So Sublime Systems is not a carbon removal technology like so many other cement approaches to cement. It's a carbon avoidance technology. So we're avoiding the fossil fuel, we're avoiding the high temperature and doing our best to avoid the limestone as well.
(29:14):
So that's the first electrode, it pulls the calcium out of whatever rock form it's bound to inertly in nature. And then the second electrode produces an alkaline solution where the calcium precipitates and forms a solid that goes on to make cement.
Cody Simms (29:31):
Is that the clinker as we talked about earlier?
Leah Ellis (29:34):
Clinker has to be formed at that 1,500 degrees Celsius temperature.
Cody Simms (29:40):
Oh, okay. So you're skipping that whole step?
Leah Ellis (29:42):
Exactly.
Cody Simms (29:43):
You don't utilize that at all. Okay, got it.
Leah Ellis (29:45):
Yeah, so it's still cement, it is not clinker since we're going entirely at ambient temperature. And that's not to say that we couldn't make clinker from our calcium. So you could hook up Sublime Systems to a kiln and make clinker and you would actually lower the amount of fossil fuel that you need to use that clinker because you've done a large part of the processing in the first step. But then you'd still have to burn fossil fuel. Sublime's mission and what gets me out of bed and what gets my team excited to come to work is that we're having a big impact on climate change and avoiding fossil fuel. So even though we could do it the way others are doing, we've decided to take another approach.
Cody Simms (30:28):
And so the output then of your system is what? It is a portland cement? Help me understand the, I guess, the feed stock in and the output at the highest of levels, just to make sure I'm gathering the process.
Leah Ellis (30:41):
Yeah. At the highest of levels, calcium and silicate comes in to Sublime process and we activate those cementitious materials. And then a calcium silicate comes out of our process, but the calcium silicate that comes out is now reactive. So you mix it with water and it reacts and sets and hardens to form a calcium silicate-based cement with the same hardened properties as portland cement. So the same compressive strengths, same set time, same flow out of the truck. And so it's very important to meet the performance that people expect to have in the field, but it doesn't have to be portland cement. I think that's a myth that's largely propagated by people with vested interest in the industry and in the status quo. But the truth is that the industry's been moving away from prescriptive standards for many years.
(31:35):
So you've seen portland cement over the years being diluted with fly ash. So silicate byproduct of coalfire power plants and slag, which is a byproduct of steel making and even grinding in the limestone of cement. So people have been trying to dilute cement with other materials for years mostly to lower cost, but now they've realized it's levered to lower their carbon footprint. And all of these recipes for cement, thousands of recipes for cement in the past few decades have really shifted the industry away from prescriptive based standards towards performance based standards.
Cody Simms (32:12):
Got it. And so just to make sure I fully understand then, so you're not outputting portland cement. You're outputting a replacement for it, which is Sublime cement, which has a lot of the same properties of portland cement can be mixed with aggregates to create concrete and basically perform at the same level on the concrete side as a portland cement-based concrete. And you were saying that on the portland cement side, for the last few years, portland cement makers haven't been making pure portland cement anyway. They've been mixing it in with other things like byproduct of steel making and other things to both lower cost and to essentially absorb carbon and heat, I'm guessing, into the process in a way that makes the carbon emissions of their process lower. Am I understanding all those things right?
Leah Ellis (32:55):
Yeah, so it's been largely ready-mix concrete producers, so not the cement plants, although they're starting to blend too. They're blending a limestone in their cement to dilute their cement, lower their carbon footprint at the plant. But it's largely these concrete ready mix producers who have thousands of recipes for cement with different additives and dilutives to reduce the amount of Portland cement in their mix.
Cody Simms (33:18):
I guess maybe let's go into that and then we'll dive into how the business side of Sublime has been playing out. But when I look at legacy cement manufacturers today, most of them have made large net zero commitments. Do they have a pathway to that? Is it mostly carbon capture on the chemistry side but they haven't figured out the heat side yet? Or what does that pathway look like today without Sublime in the picture?
Leah Ellis (33:45):
Yeah, all of these companies have made net zero by 2050 commitments. I think for a long time they were resistive to changing and I think they're all on board and trying their best. There's a tremendous amount of effort, a tremendous push. Actually, one thing I thought was really interesting, I heard this from the sustainability officer for Holcim herself is that Holcim and cement companies are the single largest CO2 emitters on the planet in terms of single companies. You would think it's around [inaudible 00:34:19] or Exxon, but everybody else is burning their fossil fuel. They don't really have high emissions themselves. But cement plants, they're at the top. So they are feeling a tremendous amount of pressure, and especially in Europe where with the cap and trade system. So they're working a lot on diluting the portland cement with silicates and minerals. So there's a tremendous amount of effort with that. A tremendous amount of effort also with alternative fuels, so burning biomass, tires. Still very carbon intensive, but you can think of some circularity with the carbon there. But all of these 2050 commitments involve post combustion carbon capture and sequestration.
Cody Simms (35:00):
Bituminous coal, which you mentioned, is on many firms like no-no ESG investment lists, right? They don't invest in companies that use that, which basically blacklists a lot of these existing cement processes as far as I understand it.
Leah Ellis (35:15):
Right. They can switch to natural gas kilns, but it doesn't produce as luminous a flame like you said with your girl. And so either way you cut it, they're going to have to spend a tremendous amount of CapEx updating their kilns for these new alternative fuels. They're going to have to rejig their supply chains for these supplementary cementitious materials and they're going to need post combustion carbon capture. About one ton of clinker produces rounding up a little bit one ton of cement, just to keep the numbers even. And so having a million ton per year cement plant is going to require a million ton per year carbon capture plant right next door. So that's going to double the footprint, at least double the CapEx, double the OpeX, double the price of cement. Cement's the most massively produced material on earth. We're going to have to do something with all that CO2. It completely dwarfs our need for beer and soda.
Cody Simms (36:13):
If I understood your process correctly, there is still CO2 released in the chemistry process of what you do, which means even with you reducing the heat requirement, point source carbon capture is still going to be required on Sublime cement production as well. Am I understanding that correctly?
Leah Ellis (36:32):
If we choose to use limestone.
Cody Simms (36:34):
Okay. And so I think the underscore I want to put there is carbon capture in some cases, particularly point source, gets a bad rep in the industry because it's mostly talked about as a way to continue to preserve fossil fuel use, but there's no human civilization without cement and concrete. And so it sounds like to some extent most pathways point toward a need to continued innovation in that space for this industry in particular. Would you generally agree with that?
Leah Ellis (37:01):
Yeah, I would. I actually think about the future with the story. So when I was in my PhD group, I was not in the story by the way, but there were two PhD students that were working with a piece of water chilled equipment. There was a big leak somewhere in the equipment. The floor was in two inches of water. They pulled out their mops and they were trying to clean up the water with mops and it wasn't helping. So they went and got the lab manager who yelled at them because they hadn't looked to turn off the actual leak that was causing all of this water.
(37:38):
I think of that as like an analogy for climate change where we have a lot of CO2 and we need mops. So we need post combustion carbon capture, we need removal, but we also need avoidance. We need technologies that just leapfrog the way things are now and just turn off the tap. You need both. They're both urgent. But the way I think of Sublime is turning off the tap with avoiding the fossil fuel, keeping that stuff in the ground and avoiding limestone use as much as possible as well.
Cody Simms (38:12):
And so let's talk about that because we haven't talked about alternative feed stocks and inputs. I have seen other startups that their business is, "Hey, we're an alternative feed stock for cement. We're some kind of recycled material left over from the cement process or other things." I'm curious how you view that evolving. Why have we stuck with limestone for so long and how realistic is it that we will move to a limestone list cement production process?
Leah Ellis (38:40):
So limestone is very abundant. So almost it exists everywhere. It's about 50% calcium, the other 50% is CO2. But even the cement majors are moving away from using limestone in their process. So as much as they can without offsetting their calcium to silica ratios, their stoichiometry, they're moving to alternative non calcium sources themselves. And you can see this in the roadmap, they can only use small amounts, let's say 10% of their limestone substituted with another calcium source without offsetting their ratio. But everybody's looking into it. So there's a number of different materials, from demolition debris to waste materials from different industries, to natural minerals that contain the right amount of calcium. So there's still a lot of options there, but it won't be like limestone where it's just everywhere all mostly the same. It will depend on the region what you can use.
Cody Simms (39:41):
Yeah. The aha I'm having right now, Leah, is that everything about what you're saying makes it obvious that cement is a chemistry problem and yet the crush of modernity over the last 150 years has made it a scaling problem. And so instead of innovating on the chemistry, it's been innovating on the production and scaling of the existing known processes. We've hit our local maximum on our ability to continue to scale this and maintain the quality of life that we all have come to know and appreciate. And so it's time to rethink first principles. That's the kind of the clear aha I'm hearing from you and that rethinking first principles comes back to looking at the chemistry, not at the production process.
Leah Ellis (40:26):
Yeah, totally. What we want in the end is durable, low cost building materials and just work backwards from there. You don't have to work backwards from the portland cement chemistry. Yeah, I think that's very limiting.
Cody Simms (40:41):
And so, why now? Is there something in the development of technology broadly? Maybe the fact that we've spent so much time looking at EV battery chemistries or whatnot that have enabled us to come to these realizations? Or was just no one asking these questions?
Leah Ellis (40:58):
I think the big catalyst for Sublime is energy has never been so clean and so cheap, and it's both of those things that let Sublime happen. And so I think Yet-Ming Chiang being at MIT have recently co-founded Form Energy, he was looking ahead of the curve and seeing like, "Where is this going to go?" I think once you see that as 30% of the world's CO2 emissions and energy goes to zero, that these hard to abate industries like cemented steel, currently 78% of global emissions, that number's only going to get bigger as the easier to abate things go away. And also when we see problems with intermittency come up on the grid, how can you make a technology that solves that problem?
(41:46):
Actually, fun fact is that cement plants in the states and provinces that they exist are often the largest consumers of electricity in that region. It's not because they're electrified, they're fossil fueled, but it's because of their crushing and grinding equipment. They already use a tremendous amount of energy and they're already used to balance demand on the grid. So in my home province of Nova Scotia when we get a hurricane, Nova Scotia Power calls up the Holcim plant and asks them to turn off their crushers and grinders to create bandwidth. And so you can just multiply that effect when you think of not only having electric crushing and grinding, but also an electrochemical kiln. You think of how the grid and these large electrochemical industrial processes can work together and bring a renewable future on multiple fronts.
Cody Simms (42:37):
Yeah. And thinking out loud about that, I mean today from the heating perspective, it's just been using their own local energy sources. They're their own little mini power plants, right? And so if you do away with that and you just plug them into the grid to run an electrochemistry process, now you're one of the players in the whole distributed energy resources world, you're a demand response vehicle that can be used to help us have a healthy grid overall. And so you begin playing in that grid optimization game that so many software-based startups in the smart grid space are playing in. You're just on the consumer and producer end of it as opposed to the optimization routing end of it. Am I seeing the chess board in front of me in the right way?
Leah Ellis (43:19):
Exactly. And just because you're so big, you don't have to fluctuate that much to make a big difference for the grid. So a electrochemistry is very rampable. You can control the current densities but still be operating at 100% capacity factor. It's just a matter of efficiency. So there's calculus to do on the cost of electricity. If it's very cheap, you could ramp up, perhaps be working in a less efficient regime, but it's more economical to ramp up or to ramp down to be responsive in a fairly quick way compared to other approaches like peaker plants.
Cody Simms (43:55):
We've kind of looked at how you play with the coming world of electrification. Let's take a step back and talk about, "Yeah, but you got to sell this into a very legacy industry." And so as you're going out, what are you hearing from legacy industry about if they were to work with Sublime, what are they doing with all of their existing sunk cost infrastructure? How do they transition over to potentially working with you and what does that look like at scale?
Leah Ellis (44:23):
That is a great question. Of course, cement companies have trillions of dollars invested in their kilns and the way they do things today. But things are changing. So in the US a lot of these plants are very old. So there's the opportunity of upgrading a brownfield plant to a new plant. Actually, Sublime's economics are actually really good at scale. So it's almost a no brainer if once we can demonstrate a first of a kind plant and demonstrate what our models are telling us. If you had the choice to install... And this is not even including any carrots, any sticks in terms of carbon fossil fuel penalties or anything like that, it would just be a no brainer to install a Sublime system. So there's like a licensing possibility as well as we go forward. Also, there's a lot of greenfield plants to be built in places like India and Africa, which are the developing world, which will be where the floor space on earth is going to grow the most between now and 2050.
Cody Simms (45:28):
Do you view the business as being all in with one business model or another, or do you think there will be multiple shades of how you scale? I guess put more bluntly, are you going to be building Sublime plants and going into the cement production business yourselves? Are you licensing the tech and people licensing and building it into their own factories or are you still sorting out that go to market?
Leah Ellis (45:55):
Yeah, I remain open to any and all of the above. I'd say right now at Sublime, at the scale we're at now which is about a hundred tons per year at most, we are growing the company and scaling our technology with. Assuming that we are going to own and operate and be a hundred or even a thousand year old company in the way we make cements, we're validating our process, validating our product, working with people on the bleeding edge and the architecture, construction, engineering community and really focus on the brand. I think that will be really important because our cement will cost more until we can get to scale. So we're going to have to build a strong brand, we're going to have to use carbon credits, we're going to have to charge a green premium in the beginning.
(46:43):
So we're working on the brand and the customers and the groundswell of support that comes before the energy transition. Once we can demonstrate at a scale of 30,000 to 40,000 tons per year, that's the size that a cement plant, a cement company would start looking. So I had a recent conversation with a guy from Holcim director there and he was pretty funny. I was telling him about our piloting efforts and he was like, "Oh, that's cute, your nanogram pilot." And I'm like, "Well..." He's like, "Tell me when you've gotten milligrams." So that's like how they're very stoic. So it's seeing is believing for them, and I respect that. So we are keeping our heads down for the large part and we're going to show them.
Cody Simms (47:31):
Do you see regulatory pressure pushing people to be willing to pay a green premium? Do you see it being ESG and stock price pressure, a little bit of everything? Have there been levers so far that you feel like are driving most of their interest in leaning into what you're doing?
Leah Ellis (47:50):
Yeah, I would say that as far as the green premium goes, cement is so cheap. That's really terrible in one sense because it means we have to get to really large scales before we can compete on cost. But on the other hand, it's like we can use that to our advantage because two or three times dirt cheap is still cheap. And so the total installed cost of concrete, about 90% of that is labor. So as long as you're not doing anything that causes more people to stay longer on the job site, at the end of the day you've charged two or three times more for your cement that ends up being budget dust for the owners. And those are the people that really care about sustainability and their Scope 3 emissions. And there's a number of companies that are doing this voluntarily. And so those are the folks that we're working with through the First Movers Coalition, and just individually as well as these owners that recognize that they're not only buying a ton of Sublime cement, they're also buying a ton of carbon neutrality and that's worth something.
Cody Simms (48:55):
Do you have to have some kind of methodology that verifies that Sublime cement is X percent carbon neutral or carbon negative or however you're able to describe it? I guess we also haven't asked, where are you today, I think, in terms of percentage of carbon intensity relative to legacy process? Sorry, that's two questions in one for the record.
Leah Ellis (49:15):
That's two questions. So we're aiming for 80 to 90% reduction in CO2 emissions, which is kind of relative to 2022. And of course the carbon footprint of portland's going to come down as they start to use carbon removal technologies. Some of that also is beyond our control. Part of that remaining 10 to 20% is like the mining, crushing, grinding. We still have to parse it, but yeah, we're working on measuring this. And of course, going back to seeing is believing, it has to be measured by an external party. There has to be carbon methodology. You can't just wave your hands and say it's low carbon.
Cody Simms (49:53):
Are there methodologies that exist today or are those things you're having to help the regulatory bodies determine how to do?
Leah Ellis (49:59):
Yeah, so there's a life cycle assessment to be done on the material itself and to quantify the carbon footprint that comes along. But then if you can show that, let's say you're a ready-mix concrete producer, you can show that you've switched from a material that has a carbon footprint of X to Sublime cement, which has a carbon footprint of X minus Y. You can quantify that difference and sell that on the voluntary market. And there's also mechanisms to sell that in the European market as well.
Cody Simms (50:30):
And it seems like along with that, just for companies building other solutions in the smart grid space, as a cement plant shifts potentially to using the grid to power their operations, now they're all of a sudden going to need to better monitor their Scope 2 emissions because they're going to need to understand where their own energy is coming from and the relative emission's cleanliness of the grid that they're plugged into at any given moment. So again, it's where you see all of these climate tech pieces and parts kind of fitting together to build a new map in front of us, which is really exciting, I think.
Leah Ellis (51:02):
Yep.
Cody Simms (51:04):
So what is next?
Leah Ellis (51:05):
Yeah, what's next is we've just closed Series A. We're going to get back to work. So we've got a lot to do. The next stretch of work ahead of us is getting to that next scale leap. So going from hundreds of tons to tens of thousands of tons per year are our sole focus and getting to that seeing is believing point.
Cody Simms (51:30):
And does that involve building out more of a plant for you all at some point? I guess we didn't get into that as how are you producing today and what does the roadmap on the production side look like for you?
Leah Ellis (51:43):
Yeah, so between a hundred tons and a million tons per year is quite a big scale leap. So there's at least one stopping point in the middle. So it's the smallest possible design to scale a plant. So it's small because you don't want to waste money. It's a sub-industrial scale of production, but you also want it to be big enough to be relevant, right? So to use the same equipment. My engineer hates when I say this, that you know, pinch and zoom to make it bigger. And of course it's never as easy as that. But that's the next stopping point, is going from a continuous pilot, which we're using to develop specs for that demonstration scale plant, and then scaling that demonstration plant to up to million tons per year and beyond.
Cody Simms (52:27):
What kind of skillsets are you looking for to join the team over the next six months or so?
Leah Ellis (52:33):
Loaded question. We're growing like crazy, hiring lots of scientists, lots of engineers. So material scientists, process engineers, lecture chemists. But then also on the business side looking to expand the executive team, hiring a chief of staff. And there's no shortage of work to be done, so it's got a lot to do.
Cody Simms (52:58):
Leah, thank you so much for joining us today, sharing what you're up to with Sublime, tackling, like I said, the hardest of hard problems I think, and really showing how coming at a problem with an outsider's point of view and bringing those crossdisciplinary points of view are so important to climate tech and to solving some of the world's biggest problems. So I really enjoyed our conversation.
Leah Ellis (53:22):
Thanks, Cody.
Jason Jacobs (53:24):
Thanks again for joining us on the My Climate Journey Podcast.
Cody Simms (53:27):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars, content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change, and our member community to bring people together as Yen described earlier.
Jason Jacobs (53:49):
If you'd like to learn more about MCJ Collective, visit us at dubdubdub.mcjcollective.com. And if you have guest suggestions, feel free to let us know on Twitter @mcjpod.
Cody Simms (54:04):
Thanks and see you next episode.
