Global decarbonisation investor Carbon Direct Capital Management has invested $24.5 million for a 6.98 per cent equity stake in Calix subsidiary the LEILAC Group, which is dedicated to the commercialisation and ongoing development of Calix’s LEILAC CO2 capture technology.
Calix will continue to own the remaining 93 per cent of the LEILAC Group. In addition, as part of the transaction, Calix has entered into a licence agreement with the LEILAC Group under which it will retain 30 per cent of royalties earned by the LEILAC Group from deployment of the technology, regardless of Calix’s equity stake in the LEILAC Group. The LEILAC Group will operate autonomously, with its own management team and a Board composed mostly of Calix directors, with one appointee nominated by Carbon Direct.
The LEILAC Group, comprising Calix (Europe) Ltd (UK) and its subsidiaries, is the exclusive licensee of Calix’s Low Emissions Intensity Lime and Cement (LEILAC) CO2 capture technology.
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LEILAC technology was successfully piloted at 25,000 tonnes per annum scale at HeidelbergCement’s plant in Lixhe, Belgium, and is being scaled up to 100K tonnes per annum scale in the LEILAC-2 project for a HeidelbergCement plant in Hannover, Germany. Further commercial pilot plants for lime production are under development with Tarmac, the UK division of CRH, and AdBri in Australia, among others.
US-based Carbon Direct’s investment arm, Carbon Direct Capital Management, makes direct investments into leading carbon removal and utilisation technology companies. The firm also operates a scientific advisory business, which advises leading corporations on how to fulfil their carbon removal and utilisation commitments. Carbon Direct’s advisory work spans 28 countries and includes clients such as Microsoft and Shopify.
Calix Limited CEO Phil Hodgson said the deal represented a critical milestone in Calix’s stated strategy of seeking equity “farm-ins”, after initial development undertaken by Calix, to accelerate and deploy its underlying platform technology into each line of business, with Calix remaining head licensor.
“As each of these businesses become independent commercial entities, they will remain joined at the hip technically with Calix, which will continue to support development of the core intellectual property. Over time, growing royalty income from these companies will also support the development of new applications of the IP and associated technologies,” Hodgson said.
He said the investment by Carbon Direct would help accelerate the development and deployment of the Calix Technology for cement and lime decarbonisation.
“The recent Intergovernmental Panel on Climate Change (IPCC) report was unequivocal in saying that to reach the stated 2030 goals on climate change, CO2 emissions have to be reduced. LEILAC Technology is an option that is being deployed now to meet this urgent need,” Hodgson said.
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“Carbon Direct coming on board is a strong vote of confidence in Calix’s LEILAC decarbonising technology, following on from endorsements and partnerships with industry leaders such as HeidelbergCement, Cemex, Lhoist and Solvay.
“The investment will assist us in accelerating the deployment of the technology into the carbon capture and storage landscape, with additional resources covering technology research and development, CO2 logistics, use and storage, and whole-of-project expertise, while our technology gains more exposure in global markets outside of Europe.
“The deal also represents our first material portfolio transaction in our stated strategy to farm-in equity to deploy our technology commercially. We believe this strategy adds speed and focus at a critical time in the technology commercialisation journey, and leaves the head company to focus on what it does best—supporting our technology and developing the next global, disruptive applications.”
