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Episode 38 - Part 2: Challenges and Drivers in Adopting New Building Materials with Vighnesh Daas
38 Plays1 year ago
In part 2 of this episode, we discuss the challenges and drivers in adopting new building materials with Vignesh.
Key points include:
1. The impact of COVID-19 on increasing awareness about sustainability.
2. Government regulations such as the Paris Agreement and net zero targets.
3. The role of financial incentives and shareholder requirements in pushing sustainability.
4. The importance of testing and proving new materials' effectiveness and longevity.
5. Geographical and logistical challenges in material adoption and innovation scaling.
00:00 Introduction to Challenges in Adopting New Materials
00:28 Impact of COVID-19 on Material Adoption
00:53 Key Drivers for New Material Implementation
01:27 Financial Incentives and Sustainability
03:21 Technological Advancements and Testing
09:20 Role of Universities and Accelerated Testing
12:27 Geographical and Logistical Challenges
17:28 Future of Material Adoption and Sustainability
17:39 Conclusion and Next Topic Preview
Recommended
Transcript
Introduction to New Materials Adoption
00:00:00
Speaker
In part two of this week's episode with Vignesh, we are looking at the sort of challenges of adopting new materials. So what what are the ah the drivers that that are allowing new materials to be adopted, but also what are the barriers preventing it? um So if you haven't listened to the topic one, have a listen to that in terms of the type of materials that are coming to market. But um yeah, Vignesh, what do you think are the, what are the big drivers at the moment that are meaning new materials are being implemented? And I suppose but later on we can look at what's what's the barrier. Thanks, man.
COVID-19's Impact on Sustainability Mindset
00:00:29
Speaker
I don't know about you guys, but um I feel the world's really changed since COVID. the The pandemic changed the world in in numerous ways. we We became more mindful of what we're doing as as as a species. There's a lot of many people looking into net zero. There's a lot of many people looking into how to build responsibly. and And yeah, we just, I think, appreciate our planet a little bit more. I feel like that's the
Drivers of Material Adoption: Regulations and Financial Imperatives
00:00:55
Speaker
first driver.
00:00:55
Speaker
um ah The second driver being government regulations. The Paris Agreement nets your regulations of the UK, similar ones with governments across the world. um I think it has become apparent that we do need to change the way we build and if we were to keep building the way we are, we will struggle um and with with future generations and with future materials. And I think those two are definitely the the key drivers. The third one I would definitely say is
00:01:30
Speaker
is is financial returns. um Previously there was no significant financial returns from using um innovative new materials or sustainable new materials because that was something that know um companies wouldn't wouldn't look at if there was no business case towards it.
00:01:49
Speaker
um and Right now, i mean with banks and financial institutions being and pension funds being driven by ah sustainability credentials and and responsibility to their shareholders, has allowed or has compelled almost contractors and specifiers and developers to to go and hit those targets. If you want to borrow money of these financial institutions, you need to show your project sustainability credentials. and when you're a huge developer, it does account to a lot more um savings and and profits. um So yeah, I would, if I was to summarize it, I would say one is people's change in mindset, um two is national regulations, and three is financial and and and shareholder requirements from financial institutions and and and developers.
00:02:42
Speaker
Yeah, that's really a good point about the the COVID one. i think I think that did accelerate a lot of things because I think before there was there was a belief that changes would make wouldn't have a huge impact potentially, and that might be a ah wrong assessment, but certainly during COVID when everyone had to stop around the world, suddenly all of the um yeah the pollution maps and all that type of stuff just completely changed. um I think we then quickly realized how much we can have an impact quite quickly with with different changes. So yeah, I can see how that would have driven um Yeah, a change in mindset.
Lifecycle and Effectiveness of Materials
00:03:13
Speaker
How much as well, along along with sort of, yeah, change in financial returns where there's more incentive, I suppose, to to be seen to be more green and so on, how much is it also that the
00:03:23
Speaker
the the stage at which materials are has has changed. are you that they Is it that materials are further down their life cycle have been proven to be effective and safe and so on? Because we touched on risk um a risk of a adversity earlier on. So um yes, that is that a driver too? Would you happen to have more materials now that have moved into a later stage of of success or proven ability?
Innovation Pressure in Construction Industry
00:03:48
Speaker
ah Matt, that's a bit of a chicken and egg situation really, um um because you know if all these drivers didn't come into play, I do not think that the industry and um you know the people who are responsible for more specifications and and incorporating these materials were interested in testing them as rapidly and and and trying them as rapidly as they are doing right now. um So these three drivers are certainly compelling a lot more companies and and industry members to look at these innovations a bit more seriously because they have to hit some of their targets. Before that, it was almost a PhD project or a research project and CSR or whatever you wanted to call it. um Right now,
00:04:36
Speaker
it's it's a completely different mindset because if you don't do it, you don't win a project in ah in a massive framework and that impacts your business case and that impacts your underlying profits. So at the end of the day, it is highly profit-driven, it is highly survival-driven. um If you want to be in the construction industry, if you want to keep supplying products, if you want to keep designing buildings and infrastructure projects,
00:05:02
Speaker
you've got to look at these aspects because business as usual is not going to get let you hit those embodied carbon targets or operational carbon targets. Something I'm i'm hearing quite often is there's a carbon budget and for every big project coming up. um And that carbon budget is almost um is is from the asset owners themselves. and So the asset owner would say to their framework, this is our carbon budget. You've got to go and find solutions within and to stay within this budget or your financially.
Collaborative Approach in Testing New Technologies
00:05:32
Speaker
liable towards not hitting those targets. um I think that compels ah a lot more of these new technologies to be tested, where before the case was almost saying, it's your innovation, you're a starter, you've got to go and prove it if you want us to use it. Now, there's a bit more of a tech technology change where it's come to that point where it's your innovation, give us some numbers and let's go and do some tests together and see where we get to. We may or may not be able to use it, but we would like to trial and test your product. so
00:06:05
Speaker
That does make it a little bit easier for innovators and startups to go in and trial new building materials or new software or new you know um programming
Venture Capital's Role in Building Materials
00:06:16
Speaker
stuff. So um that is a key, key change. um Another bit is the venture capital model um The venture capital model has never been um ready for hard tech. They've never been ready for building machines because like we have discussed earlier, it needs to go through design standards, security checks, safety checks. It has to fall within some um um Euro codes or British standards. So it's a long slog. It's not like building a software. You can build a software within a few months or a year or something like that.
00:06:51
Speaker
and you can test it on the market. You can do a um you know beta test or whatever you guys call it. um And within two years, you've got a market share, you've got revenue, and it's great for the VC model because they do have to show um returns to their investors. But with you know building materials, it's not that quick. It it takes a few years if you you know at the earliest to go from a university grant research project to being you know a material that you can see outside. um um and And that's the key challenge for this industry, the adoption. How quickly can you scale the innovation and adopt it? And now there are more and more VCs who understand this. There are certainly a few VCs who understand this. And it depends on their investors, but their investors are usually
00:07:42
Speaker
you know companies in this realm already who are looking to incorporate this as as a new product in their supply chain, as a sustainable offering, as an alternative. And that's a great business case. And that's what is so helping push the innovation to to market. And that's a huge change in the last five years that I've seen.
00:07:59
Speaker
Yeah, well, I think we'll cover more of that potentially in the sort of finer topic around the venture building.
Barriers to Material Adoption
00:08:04
Speaker
But I suppose the other sort of types of barriers, and I'm thinking back to something we touched on in the first part around like rack concrete. But what are the challenges around, I suppose, validating the lifetime of a material and will it stand the test of time? Because I suppose, is there a hesitancy as well around new materials because of, yeah, sort of materials of the past that have potentially turned out to have big issues later on down the line? Oh, absolutely. um um I think, you know, it's it's where do you trial these new innovations, right? um We keep talking about two things, one the supply chain to the project management. um All of this is almost fixed, right? um If these are fixed, where do you where do you find space, I think it's up to asset owners and asset managers to find pockets of
00:08:53
Speaker
you know, innovation funds, small innovation funds, small pilot trial funds on every framework. If they can find that, then their contractors and their framework vendors are almost, um you know, they're almost reliant on on those innovation funds to go and trial some of these new products that are coming to the market. So it's finding a separate space, a safe space, if I might say that, um to trial all these things.
00:09:20
Speaker
And also, there is a massive role for universities um to to play in this. ah Conventionally, universities have always been published research papers, go to conferences and finish a PhD. I think that model um has to change and is changing. Certain universities are changing it really well.
00:09:40
Speaker
um But the targets need to be very different. The target is how do you do accelerated, for example, corrosion testing or what we call as freeze-thaw testing? How do you do that um in an accelerated manner that you can say, if you add self-healing concrete, you can do accelerated corrosion test and prove that with if you use self-healing concrete, then it does reduce the rate of corrosion. And if you can you know then prove that data and send it to um contractors in frameworks,
00:10:10
Speaker
then it comes from an independent, potent body, and senior researchers to say that, yeah, we've tested it, it does stand the test of time. And and there is technology, there's environmental chambers, there's accelerated all sorts of tests, there's fire testing. um And that is a key way. And I think Innovate UK, for example, are doing a great work in in this space. I know that they have, um working with them, we we know that they do um um what they call as an advanced subscription um with certain asset owners and asset managers, where they do give funding to startups to go and and find them these advanced and subscribed users who will use these on their frameworks and and and then work with universities to prove these projects. And I think that's a great way. It's evolving, the space is evolving, so it's really promising on that aspect. However,
00:11:07
Speaker
I think there's ah there's also a major challenge, a major challenge being design standards don't really change so quickly and they shouldn't um ah for the right reasons. However, if the data is there and the there's sufficient data from numerous sources, I think it begs a business case for these design standards to be to be revised more frequently than they are currently. um and and ah Or there's an aspect where there's public publicly accessible standards, PAS, there's numerous ones. And I think PAS could be much more relied upon by designers and and and contractors to to incorporate these new um these new technologies. um So yeah, it's a bit of a cross siloed thinking as some of my colleagues would like to say, you know you know involving universities, startups, and asset owners. And that's something that you know we have done really well for the last couple of years. I mean, yeah, I'm saying in my own praises, but um
00:12:04
Speaker
it's it's It's been challenging, but we do know that it is possible. And if people want to do this, I would definitely encourage them to to go down that route. Definitely. That's a good point around the um yeah what one of the issues around ah to testing the longevity of of of products will be the financing aspect of doing the test in the first place to prove that. um Is another aspect ah a
Geographical Challenges and Sustainability Goals
00:12:27
Speaker
geographical issue? And by that I mean, yeah perhaps you've got um someone who's interested in using a particular material when they've they've got like they have they've got that signed off that there's the willingness but the new material for example whether let's say the electric art furnace installation is in a completely different part of the world it's not near them are they ah issues we're seeing as well in terms of not having alignment of where the materials might be even where the people willing to do them use them are it was that less of an issue
00:12:55
Speaker
I think it's a major issue um um and and you're right, but if we talk about the UK, we're a small island, um we do import, we're not importer of of a lot of these building materials.
00:13:09
Speaker
um We get stuff from Spain, Turkey, Portugal, China, India, all over the world, really. um And yet it does possess key challenges, but there's something coming called as CBAM. It's like a carbon border mechanism. um It's like a tax, which will be applied on if you import products from outside the EU or the UK or something like that.
00:13:33
Speaker
And um that's something that is driving the industry here as to be less reliant on those sorts of products and find more innovative and technologies here that can be augmented with the existing supply chain. um But you know there's there's only a certain number of steel plants, for example, if we were to take that example. um So a company dependent on on utilizing um waste from those deal plans will always be dependent on a certain radius from within that steel plan. If it's the UK, sure, we we're we're not that big. We can we can probably you know manage distances. But there's a there fine balance between
00:14:12
Speaker
embodied carbon and operational carbon. This is something that, you know, when we used to run a pre-gas factory, we would, we would, we would think about it when people used to come to me and say, Hey, we want this embodied carbon to be hit number to be hit. And I would just simply say to them, guys, you would do that, but you would increase your cost about three times and your operate our operational carbon would be a lot higher.
Balancing Sustainability with Carbon Footprint Challenges
00:14:33
Speaker
So you would need a lot of energy ah heating in the winter to make this product work.
00:14:38
Speaker
Why are you not thinking about that? you know um um So it's it's tricky. um I think everybody is learning everybody is learning really quickly and because some agencies have net zero targets of 2030. The UK has a net zero target of 2050. So it's finding where do you find these pockets of um pockets of opportunities to do to make sure that you can add you know use ggps where you can, which is these deals like use the electric car phone, it's like where you can um use if you have a coal power station near you or a port near you, then how about looking at um PFA based product, which is fly ash based product. So I think, um yeah, it's not it's a tricky one. um Someone was telling me a couple of days ago, one of my old colleagues, he was like,
00:15:27
Speaker
Oh yeah, a lot of these manufacturers are using what we would call a CEM 3A. CEM 3A is basically cement and ggbs put together in concrete and you know it is lower carbon but yeah it's been around for I mean, significant number of years. So it's not new, but you're packaging it as as something that is new. While you're deviating towards it, yeah you you do realize that GGBS won't be around for that longer because steel plants are moving into electric arc furnace plants. So that product is not going to be available in the UK. So if you're changing your precast or
00:16:03
Speaker
or other factories into that you best be prepared that in in two years or five years you're moving on to another product very rapidly so it's it's staying in touch with with the developments so of of the industry and and I think geography is is is has to play a key role I mean you can use um limestone as ah as an aggregate in in if you're and in the north of England or in Wales You go down towards you know London or something like that. yeah You don't have the Peak District. Also, so we need to protect the Peak District. We can't use all of the limestone from there. So yeah, this this conversation is is is easy. is um I mean, another aspect was
00:16:40
Speaker
Can you use local concrete break product as breakwaters in Cornwall without dredging a lake in Norway? It would be really nice not to dress that lake in Norway. But then you're saying, oh, rocks are more sustainable. Are they really? Because you've dredged a lake in Norway.
00:16:55
Speaker
and surely impacting the ecosystem in in that lake and near that locality to say that the project in Cornwall is a lot more sustainable. Is it? Is apple and oranges? So I think could you use concrete with a little bit more embodied carbon in in in that in that area, locally manufactured with local stones?
00:17:14
Speaker
and saving a lake in in Scandinavia, I would prefer that, I think, but I'm not an expert on on ecology and and all that, so I think it needs a a layered and and and collaborative approach to to manage those kind of projects.
00:17:27
Speaker
Definitely. i think I think it's going to be an interesting space to watch over the next few years in terms of yeah one, the new material is coming through, but but two, what changes the acceleration of adoption and and and so on. So one to watch. Perfect. I think well yeah we'll move on to topic three, where we look at sort of the venture building that's going on around helping to support the decarbonisation of the environment. So join us for that.