Environmental Clean Technologies signs binding heads of agreement with ESG Agriculture
Agreement covers the development and offtake of soil health products using its net-zero emissions COLDry technology
Initial product volume set at 30,000tpa with opportunity to increase volume with no additional capital expenditure
Special Report: Commercialisation of Environmental Clean Technologies’ agricultural net-zero COLDry technology has been advanced under a binding heads of agreement with ESG Agriculture for the development and offtake of soil health products.
The agreement replaces an existing memorandum of understanding that set the groundwork for a comprehensive collaboration between the two companies and is a precursor to a detailed joint venture agreement.
Environmental Clean Technologies’ (ASX:ECT) net-zero COLDry process uses low temperature and low pressure to dewater lignite to produce an upgraded feedstock for use in high-value applications targeted at the agriculture, industry and energy sectors.
Often criticised for its high CO2 emissions due to high moisture content, lignite is nonetheless an abundant resource that the company can use as feedstock for its process to create higher-value products.
Under the earlier MoU, small batch tests conducted by ISO-accredited laboratory, HRL Technology, successfully blended lignite and nitrogen ingredients with almost no loss (<1%) of nitrogen content to create a soil health product that can meet demand for cost effective fertilisers, enhance soil carbon levels and maintain nitrogen efficacy.
This and other completed activities such as expert reviews, granulation testing, volume and ramp-up design, financial modelling and plant upgrades combined to validate the company’s processes – including COLDry.
Heading towards commercialisation
With the binding agreement in place, the company plans to carry out initial field tests in the coming weeks.
This will be followed by large-scale field trials that will be carried out on large cropping farms in South Australia, Victoria, NSW and Queensland over the next three to six months.
Additionally, techno-economic analysis conducted by the company, which mapped capex, opex, and market pricing, indicates this is a commercial proposition to be executed across two distinct stages.
The first baseline demonstration stage will focus on building the COLDry process connected in-line with granulation at scale.
ECT wants to sell a commercial quantity of fertiliser whilst field trials are converted into bankable offtake.
However, it will not prioritise financial performance, instead focusing on de-risking the engineering and bankability of the project.
That will be followed by the optimisation stage to optimise key operational and process parameters to expand the earnings footprint in line with a de-risked baseline of operations and performance.
Key areas of optimisation will include blending, zero-cost waste heat for drying, net zero impact, 24/7 operations, and drying acceleration.
Initial product volume is set at 30,000tpa with the opportunity to increase volume with no additional capital expenditure.
Agreement shows path forward
ECT notes that the agreement with ESG Agriculture sets the pathway for a commercial scale validation of the process and concurrently delivers cash flow, boosts shareholder value, and demonstrates infield technology deployment.
“The testing results have exceeded expectations, confirming our ability to manufacture a lignite-nitrogen blend at a cost and product specification in accordance with consumer expectations,” managing director Sam Rizzo said.
“Additional testing will focus on blend and moisture ratios to define product and process optimisation.
“The key to our success is the COLDry process, which combines raw materials and processes them efficiently and cost-effectively. We are looking forward to working with ESG to advance the project.”
ESG Agriculture director Mark Scanlon said the agreement with ECT was a significant step towards a joint venture that will increase ESG’s ability to provide comprehensive value chain solutions and support the agricultural sector through soil health products, impactful reporting, and other ESG advisory services.
This article was developed in collaboration with Environmental Clean Technologies, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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