EP #155: EPDs, Data Centers, and the New Paperwork Hitting Concrete Producers

Seth Tandett (00:01)
And welcome to another episode of the Concrete Logic Podcast. I'm excited today we have Leise Sandeman with Pathways. She's one of the co-founders of Pathways and you're like, what's Pathways? Well, they are a technology company, I would say, that helps ready-mix suppliers with EPDs. And you're like, what are EPDs? Well, we're going to answer that for you too today. So stick around. We'll explain what EPDs are.

why you should care about EPDs, who's asking for EPDs. Yeah, so stick with us. Before we get into the topic at hand, I just want to remind everybody how you can support the podcast. If you go to the ConcreteLogicPodcast.com website, there's a couple ways you can get a hold of me. If you're on the home page and you look at the top of the page, there's a menu that runs across and one of those...

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Please check it out, ConcreteLodgeAcademy.com. That's, I think that's all I got, Leise. Leise, thank you for joining us today. Can you explain, or could you introduce yourself a little bit better than I do and explain what y'all are up to over at Pathways?

Leise @ Pathways (03:15)
Well, first of all, Seth, thank you so much for inviting me on here and for everything you're doing to kind of push the industry forward. I absolutely love the work on the Concrete Academy, especially. I guess, you you already introduced me well. I'm a huge material nerd. And I think of my mission as building great technology to make the life much easier for everyone who's out on the front lines actually building our societies. And really practically.

I do that through helping generate a lot of this documentation you need today, and especially these environmental product declarations, right? That's really where I've started out solving real problems for manufacturers.

Seth Tandett (03:52)
Yeah, so let's start there. What the heck is a EPD? You said it really quickly. What does it stand for?

Leise @ Pathways (03:58)
Yeah, EPD, Environmental Product Declaration. I think of it as like the environmental nutrition facts, but instead of calories and carbohydrates, we're looking at chemical and carbon. Ultimately, what this document, typically a PDF, a few pages long tells you is of the particular mix of concrete you have put that day, what is the

environmental footprint and what are the other biodiversity impacts of actually that cubic feet of concrete ⁓ and all summarized into a nice document.

Seth Tandett (04:27)
Okay.

And who's asking for these?

Leise @ Pathways (04:35)
Yeah, typically most of our customers, mean, ready-mix concrete producers with anything from one plant to 50 plants have a number of different types of customers who might be asking for this, right? A lot of where our EPDs originated from was cities or you have like the New York authorities say, well, we wanna...

reduce the carbon footprint of the big infrastructure projects we have. We're building a new airport. We're expanding the harbor. How do we do this in a way that doesn't break the environmental bank, so to speak? Now, however, we're seeing this really perforate throughout American society. And the biggest demand we're seeing among our customer base is from data center.

which also happens to be the biggest growth area in American construction. you know, while you might be looking at the front news and you're like, you know, I certainly have investors who are like, it says environmental first in this product declaration. Have you not read the news? You know, you're not following along. And I'm saying, well, listen, this is not about, this is not just about the climate. This is about good business for very real producers who are trying to win bits every day out in the market.

Seth Tandett (05:43)
Yeah. So they've been out these EPDs, not that long. It's like a handful of years when I started first hearing about them. How long have you, have they been around and

Leise @ Pathways (05:54)
Yeah, they started as more of like an academic exercise, right? Like how typically a lot of this stuff starts. The environmental product declaration is underpinned by what's called the life cycle assessment. I get it. Everyone listening now is like, no, not another acronym. LCA's, exactly. And what this basically says is, well,

Seth Tandett (05:58)
Yeah.

LCAs.

Leise @ Pathways (06:14)
figure out what all your input materials are, figure out how they're transported to your manufacturing site, and then figure out what you do with them at your actual manufacturing site. And you you sum up all these together and that tells you what, for example, what's the wastewater production or what's the water that's been used in this or what's the biodiversity impact in our local environment, what's the global warming. And that started around 10 years ago. But then...

Formalizing this into something that actually has, you know, driving deciding power in purchasing decisions is really something we've only started seeing the last handful of years.

Seth Tandett (06:48)
Yeah. And so are they using these to compare concrete to other material? Is that what they're doing with the EPDs?

Leise @ Pathways (06:54)
Yeah, they're doing a few different things. They're both comparing different materials and then they're also comparing different concrete from different suppliers. So what we're seeing a lot of, and anyone who makes concrete, as a ready-mix producer won't be surprised when I say this, a lot of this comes from who you're buying your cement from. The reality is there's a huge difference right now in the market in the footprint of these different cements.

But there's also a big difference in terms of, you know, your strength class, what else you're putting into the concrete, SCMs, what you have access to in your local environment and how far of a distance do you need to transport it. And all of these things are things that drive that ultimate number and how buyers might be comparing you to other producers.

Seth Tandett (07:36)
Okay, so are you getting data from the cement manufacturers too as far as?

Leise @ Pathways (07:43)
Yeah, we've loaded into the backend of our platform all cement producers in the US and what their respective EPDs are. So now you're starting to see it's, you know, you're adding the cement EPD and the amount, the quantity of cement you're using with the EPD of that cement, the aggregate and the aggregate EPD. You might be using some admixtures or, you know, other componentry and that's the...

Seth Tandett (07:51)
Okay.

Leise @ Pathways (08:07)
That's the big matrix of data that we try to pull in on pathways and make it a lot easier for anyone who needs to do this.

Seth Tandett (08:13)
Okay, so there you have an EPD that covers concrete itself and then each individual material within concrete you got EPD as well. ⁓

Leise @ Pathways (08:22)
Yeah, that's exactly right. Basically for

every single material, it's like a safety sheet or some other kind of production information. You need that at the specific componentry level.

Seth Tandett (08:33)
Okay, well, that sounds like a lot of math.

Leise @ Pathways (08:37)
Yeah, exactly. It's a lot of math and unfortunately, if we look just a few years back or even a lot of producers now, it's a lot of manual work being put on owner operators or QC managers or a driver at the end of their day to then collect all this data and make sense of it.

Seth Tandett (08:54)
Yeah, when it went, I'm vaguely remembering when it first came out, it seemed like everyone was using like a generic EPD. So each producer was using the same EPD. So there was no difference from producer to producer. So obviously that's gotten, I don't know better or worse, whatever, however you want to look at it, but everybody has a different EPD now. Is that right?

Leise @ Pathways (09:07)
you

Yeah, because the reality is the EPD, I think of it as like it's that nutrition label, but it's just a mirror of your exact production site. Right. And what most producers realized was, well, if I use my actual own data, it's a lot better than these very conservative averages I've been using, which means you're starting to actually get wins out of making real improvements. And if that can make you, you know,

20 % more likely to win that data center job. That's real, that's millions of dollars.

Seth Tandett (09:44)
Yeah, that spurred a bunch of questions. let's, the question I wanted to ask you next was, okay, so I'm trying to remember now. so you're comparing producers. I know what I wanted to ask you. So EPD, you got EPDs from each material, cement, sand, rock.

What other data goes into a concrete EPD?

Leise @ Pathways (10:09)
Yeah. So three key pieces of data. That was a real tongue twist I was putting on myself. No need for me to make the three here, but it is in fact three. You need first all of the input materials. And that's where, you know, what we get from our ReadyMix producers. We just ask them to send us their supplier lists.

Seth Tandett (10:12)
It's hard to say over and over again. ⁓

Leise @ Pathways (10:29)
They can do this fully on format. We will then match it with all data that's been published in the US to make sure we kind of have the right input. So that's one input materials. Number two is how it was transported to your site. We can do most of that as well because we know where most of most suppliers are located. But did this come by barge? Did it come via terminal? Did you happen to get Samantha out of Vietnam via terminal and then, you know, transported part of the way or by some other means?

And then what actually happens on your site? You know, your water bill, your fuels, your electricity, anything else that goes into your production. If you have those three pieces of data, you basically have a perfect mirror of your production process. And I was on a call with a ReadyMix producer a few weeks ago who saw our platform and who said, well, that's just my production process. And I said, that's exactly what an EPD is. It's just summed up what your production process actually is.

If it looks different than your production process, something has gone wrong.

Seth Tandett (11:24)
Gotcha. So you're getting utility information where their power comes from. So how their power generated, does that affect the EPD?

Leise @ Pathways (11:33)
Yeah, it does. Because the reality is that there's a huge difference in the grid mix and in how power is generated across, I mean, even from city to city, right? Neighboring plants can look different if they're tied up to a different grid.

Seth Tandett (11:46)
So you would have a difference between plant to plant, but also obviously region to region as well. what's the... When owners, say a data center, we won't name names, a hyperscaler is asking for an EPD, are they comparing producers to each other?

Leise @ Pathways (11:52)
Yeah, exactly.

Yeah.

Seth Tandett (12:07)
Or is there a bar that they say they want to be under as far as their environmental impact of that particular concrete mix? Does that question make sense?

Leise @ Pathways (12:18)
Yeah.

Yeah, it makes a ton of sense. It's like, what are the buyers actually asking for here? And what are they measuring against? And unfortunately, the answer is it varies a little bit from hyperscaler to hyperscaler. And it varies a little bit from, you know, GC and architect working with that particular hyperscaler. But we see two different things. We see, actually, if you see three different things, we see in some regions where EPDs are still so nascent that just having the document

Seth Tandett (12:21)
Okay. Right.

Leise @ Pathways (12:45)
means you're beating out your competitors because you might be the only one who puts in an EPD with the bid. Great. Because that shows the hyperscalable, you've gone to the effort of actually understanding what your production process is. At least we have some data and you know, this gets a little bit like accounting. They need to just report something back. Having something is better than nothing. Then we see the next level where we have different benchmarks for different mixed strengths being put out by

Seth Tandett (12:57)
Yeah.

Leise @ Pathways (13:11)
NRMCA and also GCCA, so Global Cementing and Concrete Association. And these benchmarks are increasingly being used to think about what is reasonable for different strength classes. The reality is, though, and anyone who's in this business knows this, it's not like a hyperscaler can be like, well, now let me just get concrete from someone who is...

10,000 kilometers away. So you've got the landscape you got in your local region, which is why you typically end in that last category, which is it becomes about comparing versus your versus kind of anyone else who's in that region and becomes a really localized comparison.

Seth Tandett (13:48)
Okay. And then you mentioned earlier, life cycle analysis. So when does that start for the EPD and when does it end for that EPD?

Leise @ Pathways (13:58)
Yeah. We do it for a year of data. So we basically average out, you know, your water usage across a year. And then we say, well, over the last year, how much did you produce in total? And that becomes kind of what you think of as the base data behind. But then every time you produce a new mix, you know, a new mix is a slightly different ratio of the same things and new EPD is generated. Once you're on to our platform and been on boarded,

Typically what we do is we integrate into QC systems. So let me take a good example with our friends at Stonemont. Our goal is actually not that anyone necessarily goes to pathways. Once they're set up, they can do everything they need to do in their native QC system. No additional clicks, push the data, we pull that mixed information into our system, we generate the EPD and we push it back to them. That way it can become fully integrated into the existing flow.

We all know how busy people who make concrete are. They don't need additional software or interfaces.

Seth Tandett (14:50)
I gotcha. I guess I let me reframe that question. So, life cycle analysis.

for concrete for that EPD? it start from when a shovel is put in the ground to pull that rock out of the ground for that concrete? Yes or no? Or yes. Okay. Okay.

Leise @ Pathways (15:07)
Yes, yes, the short answer is yes. It goes

all the way down to the data input of what like aggregate query did you get this from? The reality is that data is sometimes a little harder for our actual producers to get and we are able to provide most of that. But yeah, it does cover the full material life cycle.

Seth Tandett (15:14)
huh.

Yeah. Okay, so

from pulling rock out of the ground, sand out of the ground, or wherever you're getting your sand, from where... And then as far as cement, is it pulled from... Have you seen a cement... I assume you've seen a cement EPD. Where does their measure start for life cycle analysis?

Leise @ Pathways (15:28)
You sing.

Yeah, so for cement DPD, what typically is the most intensive part of creating that actual analysis and weird pathways have created multiple is around clinker production. I mean, that won't surprise anyone who's kind of been close to a cement site. That's where the heat is going. And what obviously is key there is what are the different inputs, mainly again here around energy sources. So on the cement side, it's less about

Seth Tandett (15:52)
Uh-huh.

Leise @ Pathways (16:06)
suppliers. For concrete it's really about suppliers. For cement site it's more about what's the fuel usage.

Seth Tandett (16:12)
Okay. All right. So I understand the start. Okay. And then that EPD for concrete, it measures everything up to the point where it's produced and put in place, right? Is that where the EPD ends? Going forward in the future, do you think EPDs will be expanded to include how long concrete lasts? Like a certain mix actually lasts?

Leise @ Pathways (16:23)
That's exactly right.

Seth Tandett (16:37)
We all assume concrete when it's made, lasts for decades at a time. What I'm asking is for concrete that certain mixes out there in the world may not last that long. Do you think that'll be considered an EPD one day or is it?

Leise @ Pathways (16:37)
Yeah.

Yeah,

so in Europe, we see standards that are now expanding to what they call end of life, right? So how likely is it? you know, then a producer has to figure out from their buyer, what's the average recycling rate? So how long does this actually last? What's kind of demolition rate for? We all know this also really varies by strength class, right? And by end use. The reality is today.

Seth Tandett (17:12)
Right.

Leise @ Pathways (17:16)
this is mostly assumptions, right? And it's assumptions based on some data, but again, what we see the focus on and what I frankly, as like a very pragmatic kind of business owner think about is what's within the power of the producer.

Because what happens once you've sold that concrete and once it's put, it's kind of out of your hands. What's not out of your hands is how do you recycle your water? Where do you buy your fuels from? Or which cement are you using? That's very much within your hands. And I think we center a lot of our focus and also as we give input and feedback to regulatory drivers in this space, that's kind of where our focus is.

Seth Tandett (17:54)
Yeah, I was more curious on the different mixes, also when folks, had, by the time this comes out, had Doug Mouton on the show. He's a consultant for many of the data center builders out in the world, or owners. And what we were, I think we briefly talked about, and you mentioned it earlier, is comparing concrete to other building materials.

Leise @ Pathways (18:15)
Yeah.

Seth Tandett (18:16)
So the life cycle analysis gets you to the point where that material is delivered on site, right? ⁓ And then what was the term you used for the end of life? That's what it was. Do you have an acronym for that one too?

Leise @ Pathways (18:25)
Yeah, that's.

or end of life or exactly.

They should have. We might come up with one right

here, Seth, just to get another one in the mix.

Seth Tandett (18:42)
I

just, there's still information out there that bad mouse concrete. And you were asking me before we hit record why I started this podcast. And this is one of the reasons is that people are misconstruing the carbon footprint of concrete. They think it's bad for the earth because it has such a large footprint and it's essentially because of the volume used.

across the world. It's a very, yeah, like the intro of the podcast says. Yeah, so there's a difference between volume and the actual intense energy it takes to produce building material. You love material. You know this. You worked for a steel company before. You know where I'm going with this. So...

Leise @ Pathways (19:09)
It's our most used material in the wealth. I'm like...

Seth Tandett (19:32)
That's so there's more work to do on that sort of thing. that's going to be a desire or a requirement from these folks that are building data centers or whatever large commercial projects, end of life is going to be the next thing, right? Yeah.

Leise @ Pathways (19:48)
Yeah, yeah, it's super, it's super interesting. And I mean, we've

all read the news of like, well, Amazon is going to build a data center out of wood or, know, we're going to see these like mass timber structures or we're going to create different types of foundations. think the thing and.

I'm a material girl. I love materials. I think they're awesome. I think it's critical that we build the right infrastructure and the right housing and what people ultimately need. But I'm also really pragmatic. I don't think that there is a silver bullet to any of these challenges. I think there's a lot of slivers of silver. And the reality is if we can shift one product...

Seth Tandett (20:10)
you

Right.

Leise @ Pathways (20:29)
We've shifted, you know, had concrete producers on our platform that have, you know, changed supplier choice in terms of who they get cement from and their footprint drops by 20%. That has real signals down their supply chain. And that is a huge impact. you know, that's a major, major impact. And I think that story is often lost in, you know, the black and white.

Seth Tandett (20:42)
Yeah.

Yeah, I'm sorry to put you on that tangent, but well, all right, so it sounds like you all recognize that a lot of what's built in the United States is built by producers that are have, you know, they're from two to 10 folks within the entire plant.

You know, the owner of the plant, he's jumping in a truck and driving the truck down the road. So if they want to get involved with projects that require these EPDs, it sounds like with the data that's available out there that they have, we can work with that, right?

Leise @ Pathways (21:21)
Absolutely.

Yeah,

I absolutely and this is like the part that like keeps me up at night. It's that, you know, lot of our competitors or what we see out in the market basically requires a owner operator to be an IT department for a week. And I'm like a week. That's a week of loss of sales, dispatching site visits. Like you have any idea how expensive that is? So one of our big philosophies

And there's a few different tenants to it. First, we've built technology so we can take data in whichever format our customers have it. That means you got your fuel bills, just send us the fuel bills. No need for you to sum it up in an Excel. No need to like do the manual work. We've built tech on our end. And this is where like, I don't think there's any need in like flashing up AI, but it can be really helpful on our backend to actually deliver it. Number two, we always only a phone call away.

Most people still prefer to do things in a phone first way. And there is nothing worse than having like, you know, being able to have five minutes between different site visits or different dispatches and actually now is when you could communicate it and you're stuck having to, you know, email someone, coordinate a team's meeting to provide some data or provide some information. know, these are like, you know, very small things, but it's why we've been able to unbidden, you know, I just, just got

pull this data before this call, like 25 producers in less than 30 days, right? From like us even signing them up to having fully verified documentation that they can just generate in their QC systems on our platform. And like, I just, don't want owner operators who out there doing real work to be stuck putting in data in Excel spreadsheets or templates. It's just such a waste of time.

Seth Tandett (23:14)
Yeah. Yeah, it's definitely if you can feed, I assume the backbone is some AI that you all built, but it's amazing what you can do with AI if you give it the right information. Definitely don't want to send it out on a dog like a dog and tell it the fact. Yeah. Right. Yeah. Crunch. Yeah.

Leise @ Pathways (23:22)
Thank you.

Mm-mm. No, no, no hallucination. I'm like, we're just talking good old fashioned machine learning, scraping real data. I was like, let's not make up data here, but like

crunching real numbers, that's good.

Seth Tandett (23:42)
Yeah. So is there in the future, where do you see these EPDs going? there, even for folks that are out there that are familiar with EPDs and kind of have the process down, do you see anything coming down the pipeline here that you think people should be aware of and making sure they're collecting that data as well?

Leise @ Pathways (24:04)
Yeah, I I think there's a few different things. think first of all, it's like we did quite an expensive survey with concrete producers and 50 % of them are saying they're expecting EPD publishing to increase this year. I mean, that's just a, know, someone was saying this doesn't feel like a wave, it feels more like a tsunami. And one of the things that, you know, I just talked briefly about QC system integrations.

ensuring that you then get support as a small producer in a way that really works well for you. this again is like set with all the respect and admiration. I think average age is between median age is 45 to 50 using systems we've used for a long time. Like, let's get something that plays nicely with those existing systems.

We can put all the fancy technology on the backend, but make sure it works really well in your existing workflow so that you can keep your operations running. And then I think there's frankly, that increasingly buyers are looking at the actual numbers in the EPD, which means you might have to start thinking about, you know, what's my different supplier options? Because this can start mattering, matter for actual deals.

Seth Tandett (25:21)
But as far as it, do you see anything like the type of fuel you use at your facility or anything like that that is beyond a current APD? Do you see anything like that coming down or have seen that or are we still just trying to grasp the current APD environment right now?

Leise @ Pathways (25:36)
Mmm.

Yeah.

No, I mean, the reality is I would think of the environmental product declaration as just the sum of what you're actually doing and everything you're doing that can improve your production. This is kind of like a new measure of how your production is doing. So new fuels that are coming in, which we are seeing a lot of, drive down that number that makes you more competitive.

But the framework of the EPD stays the same. Like how you calculate it, the science of that doesn't really change. You're just getting new inputs, right? So we're seeing new SEMs come up every day. I'm sure you're getting a bunch of these as well coming in your inbox. And they're just a new input, right? The calculation method framework stays the same.

Seth Tandett (26:07)
Okay.

Okay. All right. Well, did we cover everything that you wanted to cover today? You can always come back. You're very... I like you. You're very excited about concrete. you definitely got to... Well, if folks want to reach out to you and learn more about what you do, what's the best way?

Leise @ Pathways (26:34)
I love it.

Yeah. ⁓

Well, I said we're really phone first. I'm gonna, my phone number is 845-599-0488. And then you can also catch me on my email, which is Leise, L-E-I-S-E at pathwaysai.co. But you know, Google Pathways EPDs and we'll come up and you can catch us on all kinds of medias.

Seth Tandett (27:09)
Yeah, and if y'all didn't catch that, I'll put a link to her in the show notes for the episode so you can check that out as well. Leise, I appreciate you coming on the show today. Thank you.

Leise @ Pathways (27:18)
was such a privilege and pleasure. Thank you so much.

Seth Tandett (27:20)
⁓

You're welcome. And folks, until next time, let's keep it concrete.