The agricultural sector is facing significant challenges—from rising costs of traditional fertilisers and declining soil health to the impacts of climate change.
In response, CleanTech company Environmental Clean Technologies (ASX: ECT) and ESG Agriculture are coming together to meet market demand by providing affordable fertilisers that support soil and crop health while enhancing carbon levels in soils.
ECT has signed a Memorandum of Understanding (MoU) with ESG for the offtake of soil health products.
This agreement marks the beginning of a collaborative effort to develop soil health products using the Company’s net-zero COLDry process. The joint venture aims to develop cost-effective soil health products aligned with ECT’s three-pillar strategy of agriculture, industry, and energy applications.
ECT Managing Director Sam Rizzo commented, “The MoU with ESG is a pivotal moment for us. It marks the start of an exciting collaboration to enhance soil health. This joint reflects our commitment to innovation and sustainability and sets the stage for significant growth and impact in agriculture and beyond. While it’s just the beginning within Australia’s $7 billion fertiliser market, it’s one of many steps we’re eager to take, both here and globally.”
According to the terms outlined in the MOU, ECT will create a blended COLDry feedstock for ESG, tailored for a granulated soil health product. The project entails several phases: initially conducting tests to blend and granulate the COLDry pellets, followed by evaluating the granulation process design and feedstock blends to drive prices and finalise offtake agreements.
Following phases involve expanded field trials and marketing efforts during the project’s construction, optimising production to around 52,000 tonnes annually, joint R&D to enhance production processes and formulations, further production capacity optimization, and exploring greenfield production opportunities in the Latrobe Valley, Victoria, and South Australia.
This join venture combines ECT’s expertise in low-emission materials processing with ESG’s expertise in granulation, soil health product development, and farmer networks. It will drive the development of a soil health product stream at ECT’s net-zero COLDry project at Bacchus Marsh, which is being developed under its previously announced ‘Race to Revenue’ strategy.
The unique formulation of Maddingley lignite (a form of mineral rock), with specifically chosen nutrients, provides ECT with the capacity to produce soil health products customised to the application, varying feedstocks according to availability and price.
ESG Agriculture Director, Mark Scanlon commented, “This MoU with ECT is a significant joint venture that enhances our capacity to provide end-to-end value chain solutions and to support the agricultural sector through soil health products, meaningful reporting and other ESG advisory services.”
In H1 FY24, ECT’s revenue saw a 30% decline on H1 FY23 to $11k. At the same time, it recorded a loss of $2.2 million. It ended the half with $1.4m cash. For this year, the Company’s target is to bolster its revenue and push the scope of its COLDry tech, which allows for the efficient drying of high moisture content.
The MoU sets the groundwork for a comprehensive collaboration between the parties. This joint venture is expected to drive cash flow and shareholder value and opens doors for wider technology deployment.
Alinda is a Business Reporter for The Sentiment
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1 Comment
Shraddha13
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