OTTAWA — The federal government is providing $66.5 million in financing to two companies using technology to reduce emissions from cement and concrete production, The Logic has learned. 

Building materials are a significant source of greenhouse gases. In Canada, production of cement, lime and gypsum generated 14 megatonnes of carbon dioxide equivalent emissions in 2019, 17.9 per cent of the total from heavy industry that year. Cement is the key ingredient in concrete, the most widely used construction material in the world. The two awards from Ottawa’s Strategic Innovation Fund (SIF), which have not previously been reported, are for projects to apply new technology at different stages of the supply chain. 

The program has awarded $49 million to the Canadian subsidiary of Heidelberg Materials to help pay for a feasibility study and planning for a carbon capture, utilization and storage (CCUS) system at its Edmonton cement plant. The German industrial giant projects that the new facility will collect a megatonne of carbon dioxide annually once it goes live in late 2026. Pipeline operator Enbridge will sequester the gas. 

Last April, Innovation Minister François-Philippe Champagne unveiled a memorandum of understanding with Heidelberg to support the Edmonton facility. Ottawa has not yet publicly announced the funding award, which The Logic identified in government filings.

The company and the federal government are still negotiating terms of the agreement, according to David Perkins, Heidelberg’s vice-president of government affairs and communications for North America. He said the firm is currently working on engineering designs for the facility, so it does not yet have a final figure for the total cost. The Alberta government’s major projects database estimates the price tag at $1.4 billion. In addition to the SIF award, Perkins said Heidelberg expects to receive funding from the federal tax credit for CCUS equipment, as well as a provincial grant program. 

Heidelberg claims the installation will make its Edmonton cement plant the first carbon-neutral one in the world. It will test the technology at a smaller scale at a Norwegian facility that’s due to begin production next year.

The SIF has also awarded $17.5 million to Giatec Scientific. Founded in September 2010, the Ottawa-based firm sells sensors and software that construction firms use to monitor the temperature and strength of concrete. Giatec’s marketing materials say its technology helps cut emissions by ensuring clients use only as much cement as they need, and by reducing waste from repeated tests. 

The federal funding will help the company pay for R&D  on a “smart operation system” for industry, according to government filings. Giatec did not respond to requests for comments. Details of the project will be announced “in the coming weeks,” said Cheyenne Daly, a spokesperson for Innovation, Science and Economic Development Canada.

The SIF awards to Heidelberg and Giatec are part of the federal government’s plan to get Canada’s concrete sector to net-zero emissions by 2050 and position the country as “a frontrunner” in the industry, Daly said. 

While concrete cannot be transported very far after it is mixed, cement does travel, and buyers can choose between domestic producers or imports from north Africa and Asia, where carbon prices don’t apply. As policymakers and consumers seek greener construction, the industry needs to reduce emissions. “We see getting to full decarbonization of our materials as essential to the competitiveness of our sector in the future,” said Adam Auer, CEO of the Cement Association of Canada. 

Heidelberg, like most major cement producers in Canada, is a multinational with facilities around the world. Auer said government incentives ensure firms spend on upgrading their plants here rather than elsewhere. Programs like the SIF finance upfront capital expenditures like building new facilities and or installing CCUS equipment. 

But Auer called for governments to also chip in for plants’ ongoing operating costs. The association backs “contracts for difference,” which pay companies that reduce emissions if the value of their carbon credits falls in the open market. The Canada Growth Fund, a federal program, offers such guarantees.

Ottawa is seeking an international leadership role in the decarbonization of building materials. In December 2023, Canada and the United Arab Emirates launched the Cement and Concrete Breakthrough initiative, a group through which participating governments can come together to green the sector. 

Twelve countries have signed up so far. Canada’s priorities include coordinating standards and generating demand for lower-emissions materials, as well as collaborating on new technologies. Auer said the group can help the cement industry share best practices across borders. “Canada’s trying to bring the innovative work that we’re doing domestically to the global stage,” he said. 

Clarification: Following publication, the federal innovation department clarified that the Strategic Innovation Fund award to Heidelberg Materials was for planning activities.