Why the Calix (ASX:CXL) share price is eyeing record highs

The Calix Ltd (ASX: CXL) share price is eyeing record highs after reaching a key milestone for its low emissions project
The post Why the Calix (ASX:CXL) share price is eyeing record highs appeared first on The Motley Fool Australia. –

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The Calix Ltd (ASX: CXL) share price has had an outstanding performance so far in 2021. Most recently, surging more than 100% from $1.07 to a close of $2.29 on Monday. The company’s core technology is used to develop more environmentally friendly solutions for industries including batteries, agriculture, and aquaculture. 

Today, the company announced that its demonstration project, LEILAC-2 (low emissions intensity lime and cement) has passed its pre-FEED (pre-front end engineering and design) study go/no go milestone

Calix share price on watch after passing key milestone 

Calix believes that its CO2 mitigation technology is the lowest cost solution for reducing emissions for cement and lime production. The LEILAC-2 project demonstrates the efficient separation of CO2 in the production of lime and cement. This project was undertaken at a commercial scale at a HeidelbergCement plant in Hanover, Germany. Additionally, the project cost €23 million (A$35 million).

The project successfully delivered a design that was technically viable. It fulfilled the operational objectives of the overall plant and posed low integration risks. Additionally, it was within the required ±30% cost estimate of the budget.

The pre-FEED was assessed by a full General Assembling of the LEILAC-2 Project consortium. This included key cement industry representatives such as HeidelbergCement, Cemex, and Cimpor, and lime representatives such as Lhoist. 

The company said that the project will now enter full Front-End-Engineering and Design. This is in preparation for a final investment decision by early 2022.

This represents another key milestone for the commercialisation of its CO2 mitigation product in the European market. 

Calix has previously highlighted a number of tailwinds for its CO2 mitigation product in its half-year results including: 

  • 2018 – EU ratifies phase 4 of the Emissions Trading Scheme. CO2 permit price jumps from €5 to over € 25, where it has remained
  • 2019 – HeidelbergCement pledges net zero CO2 by 2050, and a 30% reduction by 2030
  • 2020 – EU legislates net zero CO2 by 2050. Several countries follow

Comments from the CEO 

Calix CEO and MD Phil Hodges commented on the agreement and increasing interest in the company’s technology:

We have seen a significant increase in inbound enquiries in Calix technology driven by the rapidly increasing interest in Environment, Social and Governance, from countries, companies and investors. This important project is a world-first in ambition to produce zero-emissions lime, one of the most important industrial products globally, and it is great to be developing this in partnership with Adbri, in an Australian project, with Australian technology.

Calix executes an agreement to c0-develop lime production 

Coinciding with the successful milestone, Calix announced a Heads of Agreement with Adbri Ltd (ASX: ABC) to co-develop a Calix calciner for lime production with CO2 capture.

The agreement outlines the intent of the parties to commence feasibility work on the project. This will cover lime production of around 30kTpa including demonstration of 20kTpa CO2 capture. 

The production of lime currently emits roughly 1 tonne of CO2 per 1 tonne of lime produced. Additionally, the company highlights that lime is used extensively in producing a variety of core materials including steel, aluminium, rare earth, and gold. Thus, it is a significant contributor to a producer’s carbon footprints.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Calix (ASX:CXL) share price is eyeing record highs appeared first on The Motley Fool Australia.

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