How the EU Green Deal plays into the hands of Calix [ASX:CLX].

My InsideMarket Private Fund owns shares in Calix at the time of publishing this post. However, I do not accept any payment from any of the companies I cover. More on disclosure at end of the post.

The overnight news that the European Parliament has declared a climate and environmental emergency in Europe and globally is significant for Australian company Calix.

The Green Deal, "has created a radical level of new interest in carbon dioxide abatement in Europe and has resulted in a stream of people wanting to visit our European cement test plant," Phil Hodgson, CEO of Calix told me this morning.

In a separate resolution, the Parliament urged the European Union to submit its strategy to reach climate neutrality as soon as possible, and achieve this by 2050 at the latest.

It also called on the new European Commission President Ursula von der Leyen to include a 55% reduction target of greenhouse gas emissions by 2030 in the European Green Deal.

About 8% of the worlds CO2 production comes from cement production and the cement industry is the largest emitter of CO2 globally.

The EU gave 12 million euros to Calix and a number of cement industry leaders to build a cement test plant, based on Calix's underlying technology which can eliminate the atmospheric release of C02 during the cement manufacturing process.

Knicknamed project LEILAC, it began in May 2019 and by July it was announced that the technology delivers as advertised - all CO2 is captured in the patented Calix cement kiln rather than released into the atmosphere as it currently is.

Having achieved its initial goal the plant is in the process of continuous operation to prove its commercial viability.

Supported by the European Union’s Horizon 2020 programme and extensive industrial backing, this event was a significant moment in the development of Calix’s Direct Separation technology, and the culmination of many years of hard work by all of the project partners.

But now, with the Green Deal announcement, Phil Hodgson said this will add huge interest to the technology project.

The Green Deal interest is forcing him to base himself in Europe till at least next February.

I caught up with Hodgson this morning as part of an already planned special on the lithium battery industry and Calix's technology in that vertical, which I will be running over Christmas.

But the Green Deal announcement presented a great opportunity to also discuss its impact on Calix.

Disruptive technology stocks should be considered very speculative, high-risk, and extremely volatile. There are significant risks inherent in developing new technologies that are not discussed here. You should always seek professional advice before considering any share purchase or sale. Please read our full disclaimer.

Calix - A company to watch. (ASX:CLX).

If you are a regular Insider, you will know I am a big fan of Australian technology companies and Calix is now starting to show it is yet another one to be proud of.

They have just signed their first commercial deal and according to CEO Phil Hodgson, it could be the first of many.

The company's core technology is a kiln-like processing system that is used to develop more environmentally friendly solutions for advanced batteries, crop protection, aquaculture, wastewater, and carbon reduction.

But as with the 10 year distribution licence agreement they have just signed, it is not just another environmentally friendly product. It allows agricultural producers to have higher yields and to eliminate, or dramatically reduce, pesticides and fungicides.

Calix’s first distribution licence agreement is for its bioactive magnesium hydroxide (known internally as BOOSTER-Mag) for agriculture and has been executed with Afepasa (Azufrera y Fertilizantes Pallarés, SAU.

It covers Europe, the Middle East and Africa for a period of 10 years.

The key terms of the license are:

1. Territory: Exclusive License to sell its bioactive magnesium hydroxide in Europe, Africa and the Middle East, subject to performance hurdles

2. Performance Hurdles: Minimum sales volumes: Year 1 and 2: 150kL, Year 3: 100kL, Year 4: 200 kL, Year 5+: 400kL

3. Intellectual Property (IP): Any new / developed IP to be 100% owned by Calix Calix’s safe and sustainable bioactive magnesium hydroxide materials have been under development for agricultural applications for over four years, with extensive testing over consecutive years on a variety of crops in Australia, Asia and Europe.

Through these thorough testing processes, Calix has demonstrated that grower productivity, safety and sustainability can be substantially enhanced when using BOOSTER-Mag. BOOSTERMag targets a total addressable chemical crop.

I spoke with CEO Phil Hodgson about the deal and the future for the Australian tech company.

We do not recommend or advise to buy or sell shares in Calix. The InsideMarket Private Fund does not own shares in Calix at the time of publishing this post. We also have not received any payment from the company for this coverage. Disruptive technology stocks should be considered very speculative, high-risk, and extremely volatile. There are significant risks inherent in developing new technologies that are not discussed here. You should always seek professional advice before considering any share purchase or sale. Please read our full disclaimer.