Mapping Canada’s New Greenprint with Sustainable Building Materials

Speaker 1 [00:00:01] Hi, it’s John here. It’s Autumn, so you may be listening to this inside. And if you are, I wonder if you can pause and look around you to the walls, the floors, the ceilings, the windows. They make up the built environment that not only shields us from the elements, they help define us and shape our lives. They also need to change because the very elements and processes that go into making these structures are also a challenge to the climate. I got to thinking about this recently in Vancouver, which is one of my favorite cities anywhere, and not just for the mountains, which form one of the world’s most stunning urban backdrops. The city’s architecture is a design signature. It’s the work of visionaries like Arthur Erickson and Peter Busby and Eva Matsuzaki. It’s also changing. Vancouver is setting the pace for Canada in sustainability. It pioneered green rooftops and district energy systems and is now carving the way for new building materials from mass timber to cured concrete. It’s a buildings revolution that’s not just limited to Vancouver. The way we build our homes and offices and warehouses is changing right across the country. The big question is can we do this when housing affordability and the cost of buildings in pretty much every part of the country has become a national crisis, how can we make sustainable buildings the new norm and do it in a cost-effective way? And how do we do this fast enough when we’re already well into a building boom that will shape the way we live and look for the rest of the century? This is Disruptors. An RBC podcast. I’m John Stackhouse. In the decades following World War II are often described as the golden age of architecture. But if we build new homes using traditional approaches of even the past few decades, we risk adding 20% more emissions to a footprint that’s already the third largest in Canada. Buildings account for 13% of our carbon footprint, and by 2030, that could certainly grow if we add the millions of new homes needed to accommodate a growing population and make housing more affordable. We need a new plan that changes how we design, construct and renovate to ensure buildings and communities are fit for the future. Today, we’re discussing Canada’s new green print and the next generation of building materials. And to help map it out. We’re joined by two leaders in sustainable building development. Our first guest is Chris Stern, the CEO and co-founder of Carbicrete. It’s a Montreal based tech company that’s focused on carbon removal and is developing innovative, low cost building solutions that contribute to the reduction of greenhouse gas emissions and enable the production of cement free carbon negative concrete. Chris, welcome to Disruptors.

Speaker 2 [00:02:58] Yeah, it’s great to be here, John.

Speaker 1 [00:02:59] Chris, I want to take you back to the foundations, if you will, of Carbicrete. Can you share a bit of the origin story with us?

Speaker 2 [00:03:06] Yeah, So actually it’s my second startup. My first startup was in solar power. We had a company called Pure Energies, which we started in Toronto, expanding into the States, grew to 200 people, and sold it to NRG in 2014. I was looking for something else to do afterwards and I was introduced to the folks at McGill in 2015 and I knew nothing about cement and concrete and learned very quickly that you could make concrete without cement, which is the foundation of the Carbicrete principle.

Speaker 1 [00:03:34] And what was the problem that the researchers at McGill were trying to solve?

Speaker 2 [00:03:37] They’re trying to find some alternatives to cement because cement is responsible for 80% of greenhouse gas emissions. It would be the third largest country after China and the United States if it were a country. So, not only did we find a replacement, which is steel slag, but we also use carbon dioxide to cure it. So we permanently remove CO2 from the atmosphere when curing the product.

Speaker 1 [00:03:59] And for all us non-scientists. Explain to us a bit how that works going from slag to something that can hold up our roofs.

Speaker 2 [00:04:07] Basically for cement based concrete. You know, you make a product like a concrete block and you add water to it and then it cures over 28 days to get full strength. With our products, we take something called steel slag, which is an industrial waste byproduct of a steel making application. We grind it to the same consistency of cement, mix it with sand and aggregate water, make a product like a concrete block, and then instead of waiting to cure over 28 days, we inject carbon dioxide into the curing system. The CO2 reacts with the calcium oxide and creates calcium carbonate, which we all know as limestone, effectively concrete.

Speaker 1 [00:04:49] How is this going to change the nature of buildings?

Speaker 2 [00:04:52] Well, they’re going to be carbon negative. At least, the concrete part will be carbon negative, which is very important because almost 30% of the current emissions are from the built environment. So we have to attack it from many different angles, including the concrete.

Speaker 1 [00:05:04] And I imagine that’s not an easy challenge. What are some of the obstacles that you’ve been coming up against?

Speaker 2 [00:05:10] I mean, some of the obstacles. I mean, we’re changing something that’s been the same process that’s been used for thousands of years, invented by the Romans. And of course, the industry is extremely staid and they’re not really open to change. There hasn’t been a lot of innovation. So, you know, everybody’s interested in the product. And now is the time for scaling up.

Speaker 1 [00:05:27] Then scaling up in every sector is challenging. How is that a special challenge in the construction industry?

Speaker 2 [00:05:34] Well, everybody wants to make the change. You know, initially. Then they say, well, can we try one or two different systems instead of changing over our whole plan? So one of the challenges is to convince people to change their whole plant, to work within a strategy to to basically acquire existing plants and convert them.

Speaker 1 [00:05:52] One of the obstacles I keep hearing about across the sector is building standards and codes, which are slow to change. Maybe for good reason. We don’t want to be radical with the way we put up buildings. How are you grappling with trying to transform the way we approach concrete?

Speaker 2 [00:06:07] So, our target market is masonry. So what is masonry? Masonry, dry casts, and that includes concrete blocks, paving stones and retaining walls. Paving stones and retaining walls, you don’t need to meet special codes. You just have to make sure that it meets the specification with load bearing walls, yes, we do have to follow a certain guideline in Canada, but for non low bearing walls, you know, it just needs to be within spec. We are going with the low bearing walls, but we’re also opening it up and attacking other other markets.

Speaker 1 [00:06:37] And does this lead to a business model change for people through the supply chain, or is it simply taking out one element and putting in another?

Speaker 2 [00:06:46] Well, it’s a bit of a change. I mean, steel slag looks like cement its ground. So from that perspective, it would just go into a silo at a concrete plant. So it’s a different supply chain, but it looks similar. And then the other thing is that carbon dioxide is not typically used in a concrete manufacturing plant. So the CO2 is actually an addition as well.

Speaker 1 [00:07:07] I’m guessing this sort of transformation is underway in a number of countries, and probably lots of scientists and techies are racing to get to the best mousetrap. What sort of advantages does Carbicrete feel it has over what’s going on in other markets?

Speaker 2 [00:07:19] Look, the market is 30 gigatons of concrete per year. There’s four tonnes per person being manufactured, so it’s wide open as you can imagine. And so we’re welcoming as many people that we can to the fight against carbon emissions, and that includes other technologies. But if you’re within 150 kilometers of a steel plant and you have a masonry plant, there’s no reason why you wouldn’t use the Carbicrete technology.

Speaker 1 [00:07:43] And you have to be near the steel plant for that slag or are there other inputs that you can turn to?

Speaker 2 [00:07:48] You should be relatively close to the slag input. You could also boat it over and put it into barges. But typically what we’re looking at is, you know, a centre of operation that’s close to a steel plant.

Speaker 1 [00:08:03] How fast do you see this transforming the industry?

Speaker 2 [00:08:06] Look, there’s enough steel slag in the world to make about two gigatons of carbon negative concrete. So, you know, we’ve got our internal goal of 2030 to get through a gigaton. But that’s, you know, obviously, it’s going to take a lot of nose to the grindstone, as they say, but it’s a goal and we’re fighting towards it.

Speaker 1 [00:08:24] Where do you see the company being 3 to 5 years from now.

Speaker 2 [00:08:27] Throughout North America in many different markets. So we’re looking at Texas, the Great Lakes, the Northeast, like New York, as well as the Southeast, and then through Quebec and Ontario, in the continental Europe as well as in the UK. So that’s where we see ourselves in the next 3 to 5 years.

Speaker 1 [00:08:44] Great markets. Sounds like a great product. What do you think will be the key variables in your drive to get there?

Speaker 2 [00:08:49] The key variables are capital inputs and getting people to convert either during that by retrofitting the brownfields that exist, building new green fields or less to the tech to the larger players.

Speaker 1 [00:09:02] Chris, this is a great story. Thanks so much for being on Disruptors.

Speaker 2 [00:09:05] Appreciate, John, Great to speak with you today and have a wonderful day.

Speaker 1 [00:09:11] That was Chris Stern, CEO of Carbicrete. Stay with us. In a moment, we’ll meet another innovator in building materials who’s focusing on mass timber.

Speaker 1 [00:09:29] Welcome back. Today, we’re talking about building materials and how sustainable solutions are impacting the cities and communities all around us. Our next guest is Patrick Chouinard, the founder of Element5. It’s a Toronto based mass timber manufacturer specializing in the design, fabrication and assembly of contemporary timber structures. Element5 strives to make a positive contribution to communities, the environment and future generations, with a view that timber is the essential building material of the 21st century. Patrick, welcome to Disruptors.

Speaker 3 [00:10:02] Thank you for inviting me.

Speaker 1 [00:10:04] It’s great to have you on the podcast. I wonder if I can take you back to the start of Element5 and get a sense of what the vision was for the company.

Speaker 3 [00:10:12] Well, the company started in 2015. Prior to that, I had been working in the log home industry and saw that they had a really interesting business model where they created weather tight shell packages for single family log homes. And then I realized that instead of using logs by using mass timber and CLT in particular, instead of just being able to sell single family homes and rural environments, I would be able to sell prefabricated commercial buildings in urban centers. And so that was a journey that began about 12 years ago. And everything we are today is a realization of that early vision.

Speaker 1 [00:10:55] I remember as a kid seeing those prefab log homes on the roadside and kind of always wanted what they looked really cool. Is that essentially what you’re doing for the high rise market?

Speaker 3 [00:11:06] Essentialy, yeah. These are buildings that are being prefabricated in a high tech facility and being shipped to site where they are assembled rather than constructed in the traditional sense, much like the same business model for log homes. This is just a much larger business opportunity for larger market and larger buildings for sure.

Speaker 1 [00:11:26] Tell us about the climate benefit of this, as well as the economic opportunity.

Speaker 3 [00:11:30] Well, the concrete and steel industries are responsible for approximately 12 to 14% of the carbon dioxide from the atmosphere. But when we’re building with wood, what we’re doing is we’re leveraging our forests’ natural ability to absorb and to store carbon in the form of these beautiful buildings. So unlike the concrete and steel industries that are spewing carbon dioxide into the atmosphere, we found a systematic way of not only removing it from the atmosphere but storing it and building form.

Speaker 1 [00:12:01] What are some of the challenges in scaling this up?

Speaker 3 [00:12:04] Oh, there are many. I think generally the construction industry is used to doing things in a certain way, so there’s a huge amount of inertia in the industry because of what we’re doing. Being innovative, there are few architects and engineers who know how to design and engineer buildings in this way. There’s there’s a few general contractors that know how to assemble buildings this way. There isn’t a lot of education happening at the university and college level about mass timber. There’s building code challenges. It goes on and on. However, we’ve made some significant progress in the mass timber space and now the industry is just really well poised to take off.

Speaker 1 [00:12:52] One of your challenges, of course, is building codes and the resistance, especially among municipalities, to allow too many of these structures to go up either too quickly or too high. How quickly do you see that changing?

Speaker 3 [00:13:04] Well, it’s come a long way in the last seven or eight years. When I started, we were only able to build to four stories. Then about five years ago, we were able to go to six stories. Recent code change in Ontario allows us to go to 12 stories. So the Ontario government has actually been very supportive of what we’re doing and code has changed quite rapidly.

Speaker 1 [00:13:29] And how does the supply chain have to change? Because these building blocks, if you pardon the expression, need to come from centres that can be pretty far away.

Speaker 3 [00:13:38] Yeah, a very good point. When the mass timber industry started, materials were being shipped long distances from Europe, for example, or from British Columbia. So it used to be that because we were bringing materials in from long distances, that mass timber was generally thought of as being more expensive than traditional construction materials locally. But now that we source all of our materials from Ontario, we manufacture in a high tech, fully automated manufacturing facility in Ontario. We ship most of our products locally. We’ve been able to drive down the cost of mass timber so that it is competitive and in fact, if properly designed, a less expensive than traditional construction. So managing that whole supply chain is paramount. And as a manufacturer, we also control the supply chain right from floor through to the finished product, through some relationships that we have with sawmills in northern Ontario.

Speaker 1 [00:14:39] My impression is that mass timber buildings are still seen as a niche product and largely done for aesthetic as well as climate reasons, as opposed to economic reasons. Is that a fair impression?

Speaker 3 [00:14:51] I would say that it’s still fairly niche. Right now it represents a fairly small percentage of the overall construction market. Ontario is incredibly well poised now to take a leadership role in this industry. There are 20 or 25 large mass timber projects currently in design, development or construction in the Ontario marketplace. Pretty much every major university or college in Ontario is now building a mass timber project. So Ontario has vast resources of forestry materials to be able to supply to the mass timber industry. Because of where we’re located geographically, we have ready access into the central part of the United States in the whole Eastern seaboard. Americans can still buy product from Ontario at a discount because of the exchange differences. So, despite the challenges, Ontario is in this incredible position to be able to take a leadership role in mass on a global scale.

Speaker 1 [00:15:50] How significant a part of the cityscape is mass timber going to be if you can look out 25-30 years?

Speaker 3 [00:15:57] Well, it’s been slow to take off, but we have recently been shortlisted among three other vendors for all affordable housing in the city of Toronto for the next three years, plus two year optional years beyond that. We’ve made some inroads into the affordable housing space, mass timber is being now used as a very practical solution for the affordable housing needs. And so particularly in that area, we see a lot of growth in the use of mass timber for affordable housing.

Speaker 1 [00:16:31] I’m glad you mentioned affordable housing because we entered this conversation from a climate perspective, but it’s critical to all all sorts of social equity as well as economic growth issues. How does mass timber benefit affordable housing?

Speaker 3 [00:16:46] I think the first challenge in affordable housing is lowering overall cost. One of the reasons we took on affordable housing was to dispel the belief that mass timber is more expensive than other forms of construction. And we’ve been able to demonstrate that over the last two years we have delivered four affordable housing projects. We’re contracted for about another eight or nine affordable housing projects. We have won every one of those projects against all the usual contenders; stick frame construction, precast concrete companies that are building boxes and stacking boxes on site. And we we’ve won every one of those based on price. So we know that mass timber is an affordable solution. Second of all, it’s much faster to construct a mass timber building than it is traditional construction materials. There’s about a 20 to 25% savings. And the other real advantage is we know that building with mass timber is much more environmentally friendly than concrete or steel alternatives, and because of the biophilic benefits of wood, we’re also creating healthier environments for people. So there there are many benefits in the affordable housing space for use of mass timber.

Speaker 1 [00:18:10] Why are mass timber buildings faster to build?

Speaker 3 [00:18:13] Because they’re all prefabricated in a high tech manufacturing facility, and there’s no cutting of the materials on site. The buildings essentially go together like IKEA furniture. And so that gives you much better cost control, much more schedule predictability. There’s fewer workers that are required on site. And so the buildings go up much faster than traditional construction.

Speaker 1 [00:18:36] And for those living or working in such buildings, do they notice the difference?

Speaker 3 [00:18:41] Absolutely. When you’re in a mass timber building, you have the elements that are exposed to some degree. The building has a different feel to it. You really have to be in it to appreciate it. I don’t know whether you’ve spent any time in some of the old brick and beam buildings in the city of Toronto. These are absolutely beautiful and there’s a real demand for those buildings. And I think it’s because of the exposure to the natural elements. I think as human beings, we just feel more comfortable in those kinds of environments. So there’s definitely a different feeling when you’re in those buildings. And because they’re made with heavy timber and solid materials, there’s also a sense of safety and security that you don’t get in, you know, an equivalent concrete or steel building.

Speaker 1 [00:19:29] I love brick and beam, except in February. They tend not to be so comfortable in winter. But a final aspect of this that I want to ask you about is First Nations involvement, because this is very explicit in your corporate citizenship positioning. I wonder if you can explain how mass timber buildings benefit Indigenous communities.

Speaker 3 [00:19:50] Many of the Indigenous communities are in remote locations and they don’t have a lot of access to trades. So the more work that can be done on a building in a factory environment, the less reliant you are in remote communities where you don’t have access to those trades. So that’s one of the things. There’s often short building cycles in these remote communities, so you need to be able to put up a building quickly. You need to be able to put it up, you know, economically as well. And because these buildings are out of wood and natural elements, there is that natural connection that they very much appreciate in these communities.

Speaker 1 [00:20:30] What a great vision for not only how we build our cities, but how we connect with the natural environment and indeed with communities that also preserve and protect natural environments for us. Patrick, thank you for being on disruptors.

Speaker 3 [00:20:45] You’re welcome. Thank you for having me.

Speaker 1 [00:20:49] That was Patrick Chouinard, founder of Element5. And if you’re wondering why the company is called Element five, Patrick explained it quite succinctly. In the ancient world, there were five elements earth, water, fire and air, of course. And the fifth element was wood. Wood is also the subject of a new report from the RBC Climate Action Institute, which looks at how mass timber can be at the heart of decarbonizing Canada’s building sector. The principal author of the report is Myha Truong-Regan, the Head of climate research here at RBC. Myha is an economist and public policy analyst and also a former urban planner. Myha, welcome to Disruptors.

Speaker 4 [00:21:28] Hi, John. Thanks for having me on.

Speaker 1 [00:21:30] You’ve got a great new report out. I wonder if you can share some of the key findings with us.

Speaker 4 [00:21:35] Oh, absolutely. So one of the challenges of the building sector is the intensive use of concrete and steel. And as the sector looks to decarbonize, what it’s looking to do is to look to the past in terms of what building materials have use in past and how can we apply modern science to bring some of those materials into the future. And one of the areas that the sector has looked at is wood, in particular mass timber. And what we’re seeing is an actually uptick in the use of mass timber within Canada. And this was essentially enabled by a series of national building code changes to allow buildings up to 12 stories that can be constructed with mass timber.

Speaker 1 [00:22:13] I love that idea of looking to the past as we think about the future. What did we learn most? Myha From the past in the building sector that can be relevant to where we’re going?

Speaker 4 [00:22:24] I think what we can learn from the past is that Canada is a nation of builders. We are a nation of innovators and we have the talent and the skill set to help decarbonize the sector. We often are so tech focused in terms of, well, there must be better technology out there and whatnot, but the rise of mass timber is really focused on knowledge and technology that has existed for the past 30 or so years. But we couldn’t find the right time for there to be an appetite for the use of mass timber until quite recently. So I think that’s what we’re learning.

Speaker 1 [00:22:55] What surprised you most in your research?

Speaker 4 [00:22:58] I was just shocked by the amount of concrete and steel that is used in the construction of high rise and rise buildings today, whether they be offices or condos or apartments. And I think part of that surprise comes from the fact that when you walk into these buildings, they’re covered up. So your sense of whether or not it’s been built with concrete and steel isn’t evident to you. But in the course of doing this research, coming up to the fact that 82% of all building materials consist of concrete and steel, which is extremely fascinating, and that mass timber only represents 1% of the mix. We have almost 700 buildings completed with mass timber. But I think within the space were demonstrating to the world and to Canadians, hey, Canada, we’ve got this. We are leaders. Let’s now try and tell the world how to build with mass timber. And I hope that this paper will inspire Canadians, whether they’re architects or builders or just a student of architecture, to perhaps think about a new way of building for a low carbon world.

Speaker 1 [00:24:05] As you’ve laid out, there are the products and processes already in the market that can advance our decarbonization. What are the things we can do in the near-term to accelerate this transformation?

Speaker 4 [00:24:18] I think one of the key opportunities is really around the insurance issue. If you take away the insurance cost of mass timber, buildings are achieving cost parity with those that are built with concrete and steel. But the key unlock that has to happen is to address this question around building construction and occupancy insurance. My research has found that the cost can be up to ten times a traditional steel and concrete building. But through some innovative thinking about risk and whatnot, those costs can come down and can achieve parity with insurance premiums that are the same, if not lower than those for concrete and steel buildings.

Speaker 1 [00:24:57] Myha, As I said in the introduction, you’re head of climate research here at RBC. You also have a background in urban planning. I wonder as we move towards close, if you can give us your sense of why we don’t seem to take buildings seriously enough in terms of climate action for the country, when we look right across the economy and which sectors to focus on most?

Speaker 4 [00:25:19] I think because we live in buildings and it’s not evident to us that it is actually a lever of change that we can pursue. Unlike, say, our cars, where, you know, it’s dynamic, you’re moving the car, you can figure out how much gas your burning but with a building, whether it’s your home or office, it seems rather static and seems rather permanent. And I think often that then perhaps gets equated into the fact that that’s not a lever of change that can be exercised in decarbonizing the built environment.

Speaker 1 [00:25:48] That’s a great insight and we’re excited to see how your report helps to change people’s thinking about the opportunity with the built sector and Canada’s journey to net zero. Myha, thanks for being on Disruptors.

Speaker 4 [00:25:58] Thank you, John.

Speaker 1 [00:26:03] That was my Myha Truong-Regan, head of climate research in the RBC Climate Action Institute. We’ve just heard how profoundly important buildings are to the energy transition our homes, our offices, our shopping centers, our schools. They all have a role to play in our journey to net zero. And often, as we’ve seen through history, the way we build our communities can be transformed by catalytic events. One in Canada was the 2010 Winter Olympics in Vancouver, which allowed for a remarkable new generation of buildings. And the same sort of spirit will be on display next summer in Paris, where all new public buildings have been mandated to have at least 50% sustainable materials like the ones we heard about in this episode. There were a few key points that I take away from this conversation. One is the basic fact that buildings are critical to the climate transition. And secondly, the technologies that we need to transform buildings are already in the market. We heard about new approaches to concrete and timber, and there’s lots more going on with steel and glass and other materials. But it’s not just technology. There are decisions that we as a society need to come to grips with. And lastly, as we heard in all our conversations, Canada can be a world leader in this new buildings renaissance. We have the materials, whether it’s wood or steel and the skills from architects to engineers to construction workers. We’ve also got some of the industrialized world’s fastest growing cities, and that’s likely to continue as people come to Canada from around the world and our population grows. We’re going to need to think differently about how we build our neighborhoods, our communities, our cities and our countries. But as we’ve seen in Canada for generations, we’re a nation of builders, and we can now be a nation of sustainable builders. Until next time. I’m John Stackhouse and this is Disruptors, an RBC podcast. Talk to you soon.

Speaker 4 [00:28:04] And Disruptors and RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. For more Disruptors content, visit RBC dot com slash disruptors and leave us a five star rating, if you like our show.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.