INTERVIEW: US-based Global Emissionairy talks about sustainable road construction

Quantum Commodity Intelligence - US-based Global Emissionairy is mobilising carbon finance to encourage contractors to adopt more sustainable approaches to road construction. The company currently has four projects registered under US-headquartered Verra's Verified Carbon Standard generating carbon credits, with more to come. Quantum spoke with Chief Executive Tim Kenney and Chief Operating Officer Ben Devine to find out more.

Q: Global Emissionairy was instrumental in the development of Verra's VM0039 methodology on substituting for hot-mix asphalt in road construction. How does the process work?

BD: The methodology was developed to quantify and calculate emissions reductions from a cold recycling process. Here in the US especially, 98% or so of roads are paved with hot mix asphalt. That's a more intensive process, using virgin aggregates that are mined from quarries.

The virgin aggregates are mixed together with bitumen at 300 degrees Fahrenheit (149 degrees Celsius) and then transported to a job site and installed. That's the business-as-usual scenario, whereas cold recycling projects take advantage of the road that's already there — so rather than mining new aggregates you can reuse 100% of that roadway in place. Specialised equipment goes down the road, grinds it up, puts it right back down and it's done at ambient temperatures.

So there are energy savings, you're not quarrying, you're using less binder - all in all a more efficient process, but it's really not broadly adapted just because you're going up against an established industry. Especially in the construction sector, it's really hard for people to change their thinking on what to do.

This methodology allows us to bring in carbon finance to reward those contractors who are doing more environmentally friendly processes. We are working to scale the market to create stronger incentives for adoption.

Right now, traditional methods remain more financially attractive, so our goal is to shift that balance by improving the business case for sustainable alternatives.

Q: Does this apply to new road construction, or resurfacing of existing roads?

BD: It's always reconstruction - this process isn't clearing out woods and making new roadways, it's rehabilitating what's already there and prioritising that over any new development.

Q: How much uptake of these more sustainable methods have you seen in the industry?

TK: The United States has about 3,600 producers that perform business-as-usual hot mix asphalt. There's about 12 of them that do the specialised processes that we use in the VM0039 methodology.

Not only are these guys trying to fight the attitude that "we've been building roads like this for 50 years, and we're not changing," but also the specialised equipment necessary — the cold-in-place recycling machines — are a significant upfront capital expenditure.

But when you build a road in the manner of VM0039 and our methodology, give or take there's about a 40-70% savings in total emission reduction versus business-as-usual. We're really putting carbon finance to work right now, trying to scale this up so that it can achieve more than a 2% market share, which is what it presently is.

Q: Do you see the change of government in the US having any impact on your operating environment, or are road-building decisions usually made at a local level?

BD: It varies. Road-building decisions involve local, state, and federal governments, depending on the project. Most projects fall under state or local government jurisdiction, except for major interstate highways. However, contractors operate the equipment, meaning emissions are categorised as Scope 1 [direct] for them.

With the change in administration, the Department of Transportation's focus on carbon reduction in infrastructure has shifted. There was momentum toward improving the efficiency of hot mix asphalt, with federal efforts moving toward decarbonisation.

However, with the Inflation Reduction Act currently under a "funding freeze", government incentives for decarbonisation are in limbo. As a result, it looks increasingly likely that the private sector will need to take the lead in driving low-carbon solutions.

Q: What sort of scale have you reached in terms of generating and selling carbon credits? Are you prioritising the spot market, or long-term offtake deals?

TK: In 2022 we got our first two contractors who agreed to do projects with us — our first two pilot projects. Our first projects took about 18 months to develop, so we didn't get issued our first credits until towards the end of the first quarter of 2024. Then we had to establish our go-to-market strategy, we had to educate all our prospective buyers.

We really started sales and making our first transactions probably in April-May of last year. In 2024 we did 31 different transactions of our carbon credits, everything from a few dozen credits to thousands of credits. We're just starting to gain real traction with the large deals, the major emitters.

We're working with a couple of major automotive manufacturers right now, and we're getting close to potentially the deals of 50,000-100,000 tonnes from major emitters. So we're just right on the cusp of getting some of the really large transactions and setting up offtake deals.

Q: What has been the buyer response?

TK: What we're finding with buyers is that our methodology is tangible - at least mentally it's tangible. And physically as well, whereas sometimes it's hard to relate to your value chain if you have, say, a tree project in Zimbabwe.

Whereas especially US-based companies, we can show them all of our projects, we can show with Google Maps, with longitude and latitude coordinates, we can show every single section.

The way that we build these projects is we call them 'roadway instances.' There may be upwards of 100 instances - maybe a mile-long stretch, maybe a five-mile stretch - but we quantify each and every instance, we stack them all together and then we build out a project.

"In 2024, we did 31 different transactions of our carbon credits, everything from a few dozen credits to thousands of credits. We're just starting to gain real traction with large deals"

So a project could be 100 instances all across northwestern New York, all pinpointed, and we can say "all of these roads were recycled." Then if a company has a distribution outlet close to there and they know that they're using those roads to distribute their product, right away they can see the connection in their value chain.

I think that's part of the reason why we do achieve a higher price per tonne than some of the other projects. Our carbon accounting is based on actual monitored data rather than complex modelling, ensuring high certainty and minimising permanence risk.

Q: How do you see the expansion potential within the US?

TK: It varies a little bit year to year, but I'd say in the vicinity of about 250,000 tonnes is the present US market, give or take.

We still haven't penetrated the entire market, there's more contractors who we are trying to get to scale their operation, there's contractors who presently do hot mix asphalt that we're in talks with. That's ultimately our goal - to take the 3,600 producers who do business-as-usual the old way and to get them to join the dozen or so contractors who do more sustainable roadway building.

BD: That's a challenge in itself. Contractors work in a low-bid environment in the US, so the lowest-price contractor wins. Trying to explain this carbon credit concept to a contractor - especially before we had proof of concept and credits issued - was a real challenge. It's really important for us to get carbon finance flowing to them to make the business case to do this.

Q: You are currently focussed on projects in the US, but do you have ambitions to expand your reach globally?

TK: Presently we're just doing our projects in the US. We have five projects in total right now. Our fifth one is very, very close to issuance, it could happen within the next week or two.

We hope to at least double the 250,000 tonnes in the next year or two and bring on new contractors. We're starting to work with contractors in Canada, we're in talks with contractors in Mexico.

Beyond that we're working on a 2.0 version for our methodology with Verra. They've asked us to broaden our scope to try to get more of a standardised baseline so that we can have more of a global applicability to our methodology.

Our goal is to take the VM0039 methodology and broaden it worldwide. We believe at some point that we will be in the millions of tonnes of reductions, but in order to get there we need to stretch beyond North America. I think we'll get there in the next couple of years.