Leilac Secures East Asia Cement Contract and Prioritises Zero Capex Projects

Leilac Advances Paid Project in East Asia

Leilac Limited, the carbon capture subsidiary of Calix Limited (ASX:CXL), has secured a paid engineering study contract with a confidential East Asian cement producer. The study, commencing July 2026 and due for completion in the first half of the 2027 financial year, will evaluate retrofitting Leilac's technology to capture around 100,000 tonnes of CO2 annually from cement clinker production. Notably, all capital expenditure for subsequent project phases would be funded by the customer, underscoring Leilac's shift towards capital-light commercial deployment.

Complementing Indian Joint Development Agreement

This East Asia engagement follows Leilac's recent Joint Development Agreement with the Adani Group's Ambuja Cements in India, announced in June 2026. Both projects are designed to generate economic returns through energy cost savings, hybrid electric heating benefits, and increased clinker capacity, while future-proofing operations by capturing unavoidable CO2 emissions. Crucially, neither requires capital contributions from Calix or Leilac, reflecting a strategic emphasis on customer-funded models that accelerate commercialisation and minimise balance sheet risk. This approach aligns with Leilac's prioritisation of near-term revenue opportunities and fast deployment routes.

Strategic Project Prioritisation and Deprioritisation

Following a comprehensive strategic review, Calix and Leilac have reprioritised their project pipeline to focus on ventures with clear, funded paths to commercial operation. Projects such as the Leilac-2 retrofit at Heidelberg Materials' German plant and Project Zeta in South Australia have been deprioritised due to funding uncertainties and timeline delays. Similarly, US projects with Titan America, MLC, and Heirloom remain paused pending funding outcomes, with exclusivity for Heirloom's direct air capture application recently revoked to open alternative commercial avenues for Calix. This recalibration reflects a pragmatic response to funding challenges, concentrating resources on projects with the strongest commercial prospects.

Ongoing Carbon Removal Development with Frontier

Leilac continues to advance its technology for scalable carbon dioxide removal through ocean alkalinity enhancement, funded by Frontier's founding members Google, Stripe, and Shopify. An initial paid project involving material testing and techno-economic analysis is underway, with completion expected in the first half of FY2027. This initiative complements Leilac's cement decarbonisation efforts by exploring near-zero emissions material production for broader industrial applications.

Implications for Calix’s Commercial Trajectory

Leilac's pivot to capital-light, customer-funded projects marks a significant evolution in Calix's industrial technology strategy. By securing paid studies and partnerships that require no upfront capital, Leilac aims to accelerate the commercial deployment of its patented carbon capture technology across key cement markets in Asia. However, the confidential nature of the East Asian customer and ongoing delays in other projects inject some uncertainty. The market will be watching closely for the outcomes of the East Asia engineering study and the final investment decisions that follow.