S1E08

High-Integrity Carbon Markets: EcoNetix's Bold Bet on Climate Finance in Africa-TEB Podcast - S1E8"

with Jacob Sense, Paul Nimmerfal· Econetics· 68m

TL;DR

Econetics aims to reshape carbon markets in Africa.

Synopsis

Econetics, an Austrian startup, focuses on developing carbon credit projects in Africa, emphasizing market-based solutions over donations. The founders discuss their experiences and the importance of transparency in the carbon market to attract investment and drive climate action in regions most affected by climate change.

Key metrics

by the numbers · 5

100,000
credits issued in 2023
6-7 million
credits expected by 2027
20-40%
Econetics commission from projects
$15
average price per credit
3%
EU carbon credit target

Topics

5 tags

carbon creditsinvestment modelstransparencyclimate actionmarket mechanisms

Stats

Duration: 1h 08m
Words: 11.6k
Questions: 46

Timeline

6 chapters

Investment Focus
Discussion on viewing Africa as an investment destination rather than a charity case.
Introduction to Carbon Markets
Jacob explains how his experience in Uganda led him to the carbon market.
Trust in Carbon Credits
Discussion on the importance of trust and transparency in carbon markets.
Project Portfolio
Overview of Econetics' current and future carbon credit projects.
Carbon Pricing
Discussion on the pricing of carbon credits and market dynamics.
Future of Carbon Markets
Discussion on the implications of the EU's carbon credit target.

Key insights

4 takeaways

01
Market-based solutions are essential
Econetics advocates for business models that generate financial returns while addressing climate change.
02
Transparency builds trust
Implementing tech solutions for monitoring can enhance trust in carbon credit projects.
03
Nature-based solutions are scalable
Nature-based projects currently offer the most viable path for large-scale CO2 removal.
04
Investment in Africa is critical
Investing in Africa's carbon markets can drive significant climate action and economic growth.

Pull quotes

2 quotes

We have to view Africa as an investment destination.
Jacob Sense
Can we trust in carbon credit?
Host

Transcript1716 cuesClick a timestamp to jump

One thing is very important and this is
my main mission to tell people is
that we have to view Africa as an
investment destination., no one
wants to get handouts anymore. No, no
one is interested in like only having
donations. So what we have to build
there is business models that work and
what is what that means is also that
make money because that is in the end
the only thing where you can guarantee
reliable workforce reliable employment
for the people not having one project
that gets three years funding from a
state and then it runs out and the
school becomes a pick stable and things
like that I've seen that
with my own eyes and so this is
something that we advocate paid for.
Let's create like marketbased mechanisms
that bring financial results to be able
to grow the business to be able to
deliver returns for investors and not
treat it as a as a donation pot.
Welcome to a new interview in the energy
bridge. today we are very happy to
have Austrian startup Econetics.
Today we are going to dive into carbon
bounds. Let's see how it goes with an
Austrian startup making projects in
Africa in Uganda.
so yeah today we have two great guest
one of Pul Nimmerfal if he's good.
>> Thank you for announcing us. the
>> you should have never showed me that
that's possible.
>> Love it, man. This is a part of the
setup. so we have you like a legal
brain behind Austrian carbon framework.
Okay, let's see.
>> It's a it's a big exaggeration, but I
take it.
>> Yeah. And also we have Jacob Sense,
which is a Uganda honorary console and
carbon market deal maker.
>> Thank you very much.
>> 100% the truth. Oh, amazing.
>> Also big, but I'll take it as well.
>> Yeah. So, amazing. Let's go into it.
>> Yeah. Thank you very much, guys, for
joining us here.
>> Thank you.
>> And would you like to give a small round
of introduction for yourself?
>> sure. Happy to. You want to kick it
off?
>> Sure., Jacob, got very big
introduced already, so thank you for
that., yeah, I'm 33 years old.
husband, father, and also an
entrepreneur trying to make the carbon
market more transparent.
>> Check, check, check.
>> Yeah, that's why we're here for also.
Thank you very much for the invitation
and we look forward to the conversation.
>> Amazing.
>> Yes. I'm I'm Paul. I'm a former
lawyer turned entrepreneur. carbon
market is really exciting among other
things. And yeah, again, thank you
very much., I'm 31., I just
thought I'm still 30, but it's a lie.
31., no kids yet. So, yeah.
>> Married
>> also not yet, but, yeah, it's getting
closer.
>> Okay.
>> Good to hear
>> both.
>> Yeah. So, maybe we could start. How
did you get into this carbon market?
What is your professional background?
like just like a small brief of your
professional journey. Sure.
>> Yeah. So basically I'm a trained banker.
So I come from the investment banking
private equity space. and then I was
one summer in Uganda and really by
accident. So we were just working at an
NGO. My then girlfriend now wife and I
thought it would be a good idea to start
a meat factory in Uganda. So that's
how my first Africa venture started. I
really then somehow convinced her that
that is a good idea.
Then I started it
turned out to be a good idea but
so overall the result was
very positive but the journey was very
difficult. but long story short I
ended up being in Uganda
>> for 5 years and I got to know country
and people and I yeah I saw what
climate change really does there like
what where really the effects hit the
hardest. Did you end up opening the meat
factory?
>> Yeah. Yeah. Yeah. It was over 180 people
employed. we exported into South
Sudan, Eastern Congo. That's also where
I was. we sold it ultimately the
factory as well. So I had some bit of
time afterwards and it was a was a crazy
journey, very interesting journey, but
it was I think the hardcore experience
of being an entrepreneur, being an
Austrian entrepreneur in the meat
business in Uganda.
>> Wow. It's a very strange start, but
that's how the journey was. And then
about the car,
>> it doesn't get stranger.
>> It doesn't get I really think it
doesn't,
>> but if you do something legal, it
doesn't get strange.
>> True.
>> And were you in Kala?
>> Yeah, I was I was living in Kala first
in Mukono, which is an outskirt of
Kala. And then I was living in Kala
and the meat factory was in Matuga.
So like 17 kilometers in outside of
Kala but 17 kilometers in Africa
or Uganda for the people who have been
there can take quite some time. So
yeah, that's where it was.
>> Okay. but how do you get the carbon?
>> Yeah. So
>> the carbon credit. So, so basically how
it evolved was we had over 1, 500
small holder farmers that were supplying
us with meat and we saw really that the
the seasons so the rain season the dry
seasons they really shifted. So for
us obviously that just as a factory it
was very important to get the
constant supply and with this climate
change issues and changing of the
seasons
>> we saw that this was not possible
anymore and out of that someone
introduced me to the concept of carbon
markets to develop projects that
actively fight against the climate
change. M
>> I thought it a very intriguing concept
to bring money from the north to the
global south where the climate change
hit the worst. So polluters
>> pay how long?
>> So that was like four years ago where
the first time I got introduced to or 5
years by now
>> four and a half years ago where I first
got introduced to the concept and then
of course it was a journey to develop
into what econetics is today.
>> yeah but happy to explain a bit about
that later. Yeah, we hear from Paul at
well a bit about his journey what he
did.
>> Yes, sure. so I have
I have a background as a lawyer.
>> Oh
>> no, but I
>> important always important.
>> No, it was good. So I need to be
so I studied law really without
knowing why but I thought it's a good
idea. No one in my family is a lawyer.
So they basically told me don't
do it. I did it nevertheless.
really liked it. worked at the
university then then went to big law
firm did a PhD. So basically did
everything in order to become a partner
at the law firm and started out in M&A
and competition law
>> and then I was really I went
abroad and did exchange in Edinburgh.
did a course on energy law
>> or at least set in that course because I
was just interested in the subject
matter
>> and then did did some work in the
energy sector still at that
commercial law firm did my bar exam
and then kind of figured that law
isn't it long term and that basically
that what the client do is way more
interesting than that what the lawyers
do. don't listen my lawyer's friend
but yeah in the end I went to the
UAE to Dubai still as a lawyer with my
former boss and there I kind of
stumbled across the carbon market
because very much by coincidence I met
the guy who worked at Dubai Carbon and
invited me to participate at the tender
and then we brought some guys from
our law firm from the former law
firm I worked in and McKenzie to
basically built the regulatory framework
for the voluntary carbon market in the
UAE. I also joined the federation of
industries which is kind of a think tank
and lobbying body for the Austrian
industries. did a lot of work in the
carbon sector there set in some task
force and working groups and went
back to Austria joined an energy startup
scaleup and then
>> NEO.
>> Okay. So it's not the Saudi Nom. it's
the upper Austrian NEO.
>> Okay.
>> And which was an amazing experience
in there. I kind of truly learned what
it means to be an entrepreneur
>> and then ultimately decided that I
want to build something on my own and
coincidentally met Jacob and we had a
very similar vision of what a company
in the carbon sector needs. So it
circles very much about transparency and
project access and also we
just get very well along. we
which we didn't knew back then but I and
I think that's basically what it needs
to work together
like long hours every day. So we
usually spend much more time together
than with our families. and if you
don't like each other yeah it just
doesn't work out. So that that's yeah
>> so welcome guys. So can we ask you the
starting question
>> please go ahead too.
>> Can we trust in carbon credit?
>> Yes. So maybe if I may may take that
one. So I think that the mechanism
behind it is absolutely right and
necessary. we hear that all
the time from from market peers from
from NOS's from from customers that
there's a lot of criticism. that
criticism is to a certain extent
absolutely right because there have been
a lot of bad apples in the market.
>> Yeah.
>> there just honestly there has
been a lot of going on for
quite some years but that that's
basically the foundation on which
we built econetics to change that. And I
mean if you see the projects, if you
really understand what's going on there
and what what what they do in the end
for the people, for the climate, then
I hardly any meet any person that says
that that market is wrong.
>> Just curious, could you say an example
how to identify this bad apples?
>> Sure. So you just need to read
the newspaper. So basically there have
been what has been lacking is
transparency. and if you think about
the geographical location of these
projects if you have a forest
area of 100, 000 hectares in the DRC very
remote then it's very hard to monitor if
you don't have the right monitor
solution. tell us a bit about the
examples of how exactly it works as
well. the carbon credits who are the
players that who formed this market
>> maybe just one one thing to add I think
because that that can we trust carbon
market so is a very good question but
for me it's also about only because
there are bad apples you stop eating
fruits right so it's like like with
financial markets there were always
fraudulent activity so you will always
have bad players in markets because they
want to be bad that does not mean that
the market itself is bad and that's also
was what what was very intriguing to me
about the principle of a carbon market.
>> So basically like to go on to the
question that you were saying like how
does a carbon market work is basically
there are underlying projects climate
protection project that either reduce or
remove CO2.
>> So how we work in econetics or we where
we work is like free verticals. So we
focus on a lot of nature based removal.
What does that mean? aforestation
projects on land or on coastal lines. So
through reforestation project,
eforestation projects with large forest
project developers, we reforest land
that was not forested before and through
the photosynthesis, the trees remove CO2
over the lifetime. Other parts include,
for example, mangrove restorations. So
restoration on the coastal line together
with local communities to restore
degraded lands of mangro foresters
forests that also are very much needed
for the climate change issues that these
countries face for example islands you
know where the water is
coming up and so this is everything
about like naturebased removals and the
other part is for us to also drive the
energy transition in countries where you
would usually not drive it. So our
project in the DRC is one of the
examples where you substitute fossil
fuel kerosenebased lamps with solar
lamps. And that means basically that
people who are not connected to the
grid, who have no access to energy off
the grid and to clean energy whatsoever,
have a chance to actually have light in
their homes. That is not by accident
burning down their homes because the
candle is falling. That does not have
negative health effects. And all these
parts of the DRC are undergoing like a
very big political issue. So you have
like rebel groups that are fighting
there. You have a lot of war zones
there. There's a lot of mineral area
like that is heavily
conflicted. So I think before
criticizing something as a whole people
always have to look at what does the
project actually do. And I think we are
the last people who say that the market
is perfect and there are no bad players.
But I think it's very bad from from the
global community to demonize something
as a whole because there is so much
positive efforts going on and that's
also something that is our mission to
showcase these projects and
>> and honestly that that's also just very
frustrating for the communities that
we work if if because they
basically like leave or they basically
do the project and if if they get
told that what they do is not
worth it or very bad and then in fact
like counterproductive
against the fight against climate
change. Yeah, it's just frustrating.
And could you tell us like a
radical truth about carbon market that
nobody that people is afraid to say?
>> Maybe not about the carbon markets but I
I think one truth that I truly
believe in that all regions
have their climate goals and basically
everyone is chasing climate neutrality
and I think we just need to be very
open how we can achieve it and that it
it won't be easy., I do
understand politically that you want to
set these goals and you want to set them
early in order to at least achieve half
of it, but you should in the end also
very much think about how to achieve
them.
>> And I think that's where where carbon
credits come in. because in the end,
it's not the whole solution, but
it's one very powerful tool.
>> yeah, in every decarbonization
strategy. So, I think I think
that's just one truth that that that not
that many people thought about in recent
years and start to realize that that
that won't be that easy to like get rid
of 100% of the emissions.
>> Amazing. just to now to understand
how exactly econetics work that an
Austrian startup working in Africa
doing projects there you I at least the
internet said that you have a couple of
hundred million worth of portfolio there
so how does it work tell us a bit
about econetics the work that you do
>> yeah sure very happy to do so
Econetics is a global carbon acid
management company as every startup
and that's very important to stress and
exactly
at the like platforms as you have them.
We can talk a little about them that
that plans also change. So for us, we
started very much with transparency and
focused on a tech solution that is
able to monitor CO2 removal and CO2
avoidance. So with satellite images with
drones and sensors on the ground, we
try to measure all our project and to
monitor them. So we if you take a forest
project we b b b b b b b b b b b b b b b
b b b b b b b b b b b b b b b b b b b b
b b b b b basically digitize a forest
and monitor the CO2 that is removed.
as an asset management company, we very
much focus on the CO2 angle. So we work
together with project developers. If
again you take the example of a forestry
ARR project we work together with a
forestry fund for example it's called
ASC impact and they plant the trees
to put it very bluntly and we build
up on their project and register the CO2
that is removed and ultimately market
the outcome the outcome is a carbon
credit that is one ton of CO2 that is
either avoided or removed we are
project agnostic so we very much focus
on nature-based solution solutions
because I think that the ultimate impact
is bigger. you can argue about that.
>> so we also have solar projects. I
mean we could do biochar projects,
mangrove projects. So in the end what we
want to do is to build a global global
carbon credit portfolio and bring this
portfolio from the voluntary market into
compliance markets. So there are around
130 carbon markets out worldwide and
some are very much regulated some are
less regulated but in the end we very
much see a trend towards more
regulated market like Corsia or article
6 for example.
>> And maybe for Jacob how how big is your
portfolio now and how do you see in the
future years?
>> So you have to look at a bit from the
project level. So we have currently
issuing like 100, 000 credits this year.
So that comes from the avoidance project
from the DRC because obviously if you
avoid CO2 the effect is ultimately right
now. So all of these lamps that are
getting installed they are avoiding CO2
from the day they are being
installed. Our large portfolio part
comes from the forestry project. So that
is together with as Paul said our
partner ASC impact Angola, Ethiopia,
Congo, Brazville around 300, 000 hectares
that will be reforested where we
expecting a pipeline of around 6 to 7
million credits per year. So 6 to 7
million tons of CO2 removed starting
from 2027. So these are the two
pipelines that we're working with. As
Paul said, since we are project
agnostic, we are looking daily basically
into into new projects that we can add
to our portfolio, project partners that
we work with. As you said before and as
we've spoken already about Uganda, now
we will do another solar project there.
we will work with solar lamp
distributors across whole Africa. So in
the end we want to build a global
powerhouse coming out of Austria that
really tackles the most pressing global
problem that we have which is climate
change and for that I think it needs
global solutions. So that's why we are
diversifying our projects through
different continents. Obviously the
sector focus or the geographical focus
for now was heavily on Africa because of
personal connections and friendships
there but we are now stretching over to
South America Colombia we are doing
looking into Cambodia at the moment
Southeast Asia.
>> Yeah. So a broad portfolio and
and highly scalable portfolio. I think
this is something that is very important
to stress.
>> This is a massive task. market needs
massive investments and we are here to
like contribute our share and our part
to deliver part of the solution of
how we become as Paul said climate
neutral because I still think the
goals are extremely ambitious.
>> this is also another truth no one
wants to talk about. They are very
unrealistic in the current setting.
It relies on a lot of parameters within
the industry that things are available
at a certain price which they are not at
the moment. So yeah, this is what we see
as our mission and our part and that's
what we're working on.
>> Interesting. But could you share some
experience of working in these countries
in especially in Africa?
people a lot of the time typically what
happens in Africa they say just stays it
there it doesn't come out and there's a
lot of there's no transparency and
then the question arises about
greenwashing as well. But I'll go
into that a bit later. But just tell us
about your experiences working.
>> Happy to. So I think generally working
in Africa, obviously
such a huge continent. So I can say I
can speak about working in East Africa.
>> We can speak a bit about working in
West Africa through the Congo project.
But specifically my my experience has
been in East Africa and yes it is
very different like for example access
to health care things like
infrastructure roads all of
these things that we in the in the
western world or like specifically in
Austria view as a very common thing is
not there. So also as a as a white guy
coming to Uganda you have your
experiences but I think one thing is
very important and this is my main
mission to tell people is that we
have to feel Africa as an investment
destination. no one wants to
get handouts anymore. No no one is
interested in like only having
donations. So what we have to build
there is business models that work and
what is what that means is also that
make money because that is in the end
the only thing where you can guarantee
reliable workforce reliable employment
for the people not having one project
that gets free funding from a state and
then it runs out and the school becomes
a pick stable and things like that you
know I've seen that with my own
eyes and so this is something that
we advocate for let's create like
marketbased mechanisms that bring
financial results to be able to grow the
business to be able to deliver
returns for investors and not treat it
as a as a donation pot I think
that is what what is very important so
the few of what we have from
let's say east Africa is HIV Ebola and
safaris so I think this is
this is something that that needs to
change and what what we are working on
is that it's it's a very interesting
investment destination amazing people
there really like the most welcoming
people I know
>> how do they make money like in terms
of you hire the workforce there you
you implement
>> you mean now from us as econetics and
also the people over there
>> so basically we are working with
project developers project partners on
the ground so obviously they have normal
salary but then the main part of our
project goes back to the project
developer.
>> Okay.
>> So we get a certain percentage as
econetics between 20 and 40% usually
from the project.
>> Then we get a commission based sale from
the other side. So 80 to 60% and this
goes straight back to the project. So
basically the whole mechanism of carbon
markets delivers a direct financial
stream back into the country and I think
this is also something that we do not
talk about
>> okay enough
>> but is just to understand the scheme so
you are like kind of carbon brokers
carbon bones broker or no
>> no we are exactly not a broker I
think that's very important to stress
for us because we are
>> how does it work the scheme like who who
is needing this carbon bounds and
how does it work?
>> So, so basically if you if you take a
very holistic bird's eye view,
if we want to become climate neutral,
let's let's start there. We need to
reduce a lot a lot of emissions.
>> But most likely in the different
scenarios we're not able to
decarbonize I don't know 20 to 40% of
the overall emissions in Europe. So for
that part you can basically do
nothing or you build a project that
remove additional CO2 those are carbon
projects to compensate for those
technically or financially unavoidable
emissions.
>> if you take a project now so buyers
are either states so we very much focus
on the article 6 or the emerging article
6 markets large corporations but it
could could be basically everyone. So
just if you think about like buying a
flight ticket, most airlines offer
and you can again you can argue
whether that's right or wrong but most
airlines offer a direct B2C solution
to compensate for flight emissions.
>> So in the end every end consumer
could buy a carbon credit.
>> So if you look at the project now I
mean the project reduces a certain
amount of CO2. That's just for the
sake of giving an example. Say the
project removes 1 million tons of CO2
per year, which is a relatively large
project. Then we sell 100% of the
carbon credits, but only a certain
share, as Jacob indicated, belongs to us
as Econetics as the asset manager. The
other majority portion goes back to the
project and then basically everyone gets
a piece of the cake. So the government
usually gets a piece of the cake, the
local community gets a piece of the
cake, the project developer gets a piece
of the cake and in addition to build the
project, we usually or the project
developer employs people from the local
communities, to plant trees, to
to monitor the project, to secure the
project and so on.
>> And we I was reading about something
called triple verification. What what
exactly the triple verification of your
carbon credit means? we don't use
the term so what what verification
for us means the project is not
verified by us but with an international
standard in the voluntary market that's
usually gold standard or vera there are
other standards like pure earth for
example depending on the project
type in addition so it's it's a very
yeah it's a lot of work and a lot of
paperwork
>> to register and verify those
projects by a third party namely the
respect active standard. In addition to
that what we do and where for us
transparency come in we deploy our
monitoring solution it's called a DMRV
solution okay
>> where you use satellite images where
you use drones and in the end at certain
monitoring plots within the project you
also need hardware sensors to measure
soil data water data and tree data.
So if you if you say triple
verification I think you
mean our monitoring solution and this
free layer process
>> and it's like a separate
framework than vera then
>> yes exactly so we believe that
that all projects need to be monitored
not by human be beings but with a
tech solution we always say don't trust
us trust the data. so that that's
basically where we started and it's
entirely in addition however we believe
that this will become or should become
the new standards looking forward
>> and just on that and correct me if
I'm wrong all the best research as we
said right
>> no yes
>> so Uganda earns8
per turn with you we were just going
into the country profile but the
market average is about $2 or something
So what what impacts of pricing power
makes there?
>> Yes. so that's wrong.
No. Uganda doesn't make any money
at the moment. So we're looking for
different projects in Uganda. when
you talk about carbon pricing, it very
much depends on the project. So usually
red plus forest protection projects
traditionally were the cheapest
credits
>> so to say around yeah let's
say $5 $4 there there is no truth
about that so the market is rather low
>> do you have a standard price or you just
go
>> so our average price is around $15 which
is for a project developer on the rather
low end so if you look at different
projects that remove a lot less CO2
for example like direct air capture
those credits are usually sold for $800
and that's basically also the reason I
mean why we focus on naturebased
solution because and I don't want to I
mean that that it's it's very good that
people focus on different
technologies so it's it's not
meant as a negative comment towards the
the direct air capture guys I heard
about this another Austrian guy who's
having a startup in
>> Kenya Yeah.
>> Yes, I have., interestingly
enough, I have been introduced to him,
but we never met. We had a brief
email conversation, but I yeah,
>> I will take a second try and send
him another email today. yeah, he's
an Austrian in
>> Yeah, we could invite him.
>> yes,
>> would be great.
>> Come over or
>> Well, we do. Yeah, exactly. Everyone
>> quick enough.
>> Yeah. So prices vary a lot but in the
end I believe and that that's
direct that's not me saying that but
that's direct customer feedback.
companies if the product is similar and
in the carbon market every ton that gets
removed and that gets verified is one
ton of CO2 and the direct air capture
ton is not better than the
forest ton or the solar tone. It's one
ton of CO2. And if you get asked by a
customer if the product is the same and
you need to say yes, then the second
question is why should I pay $800
instead of $15? And I don't have a good
answer to that., I acknowledge
that there are different technologies.
I'm I'm very happy that those guy do
what they do. I think it's very
important for the ecosystem., you
only know in hindsight which technology
if you if you wish is the best. but
it's not our focus.
>> Yeah. I think maybe just to add on that
also we are focusing on not inventing
the wheel again. We are trying to make
the wheel better that is there and I
think nature has a lot of solutions
already in place. I think renewable
energy is a is a is a very amazing
thing that we can push forward also like
in the global south where there is no
subsidies for example like we have in
Austria. So I think the carbon markets
there are really needed to get this
energy transition going. But as Paul
said in all honesty the unit is
one ton of carbon. we can discuss then
about permanence and all of these things
but in the end the unit if we if we talk
what is the underlying parameter
>> it's one ton of CO2 and for us the
customers are not willing to pay on a
scale again like I think what's for us
very important to stress is we are
trying to tackle like the climate
neutrality goals these are
massive millions and millions of tons
that we will have to remove so
basically for us we have to find highly
scale available solutions and if direct
air capture only removes a few
thousand tons so far then the technology
is simply not there yet. I'm not saying
it never will be, but at the moment for
the climate targets 2040, 2030 and then
for the neutrality 2050 or other
countries have it a bit later. We have
to have a technology that is ready. And
for us, nature already has has
technology in place that we can use. And
so I think that's what we focus on, you
know, on the on the highly scalable
things that work.
>> Yeah. just to like humanize the
numbers let's say one ton of CO2
we made a research and it globally is
around four tons per person four and a
half tons per person per year the
depending on your lifestyle so sure
>> people in the south globe they said that
it's one or two but people who
travel more in airplanes or use
or or it's more carbon intensive user
let's say can be 10 15 20 or 100 tons
per year just to put it in context
but you mentioned something about
the media or or comments right so
what would you say that for the
people who who mention that carbon
market is a green colonism in a
different custom
I
>> I would say they're they're wrong
obviously you need to look at every
project and I again we're
we're we're not saying that there are no
bad apples. but I'm always
very surprised and curious when I
hear this kind of accusation because we
we have at least we have never seen
something like that and not
obviously we don't do it., that's
that's clear, but we've also never
seen it. And, we've also never
experienced that we, we're we're
two guy white guys in their 30s. I
mean, come to another country and
tell them what to do., it just
works very differently. It's not that
that that we tell the guys in Uganda
what to do. It's it's certainly the
other way around. so, yeah, I
think it's wrong. specifically
the accusation that carbon
projects lead to substantial human
rights violations. I think that's just
not accurate. I think there are
different arguments why that why the
market can be criticized that are more
spoton but yeah that that one isn't I
believe in our experience which doesn't
mean that it has never happened.
>> Why do you think those assumptions are
made? because it h it has happened in
the past and media has reported about it
obviously that's also the that
that's what media should do if there are
project problems out there but if
you take two media articles about those
problems and say that the market
is such and that's basically coming back
to what we started with it's just
not accurate and you can say it a
thousand times but it still isn't
True. And if that would be the
truth, we wouldn't be in the
market is
>> and I think also maybe to add to that I
think it's it's just very easy to say
that or like it's an easy argument
like to say human rights violations
because that's the worst thing obviously
like you don't have to argue with that
or go deeper if that happens. That is
something where no project should ever
exist. But honestly speaking, as Paul
said, in all the time I have been on the
ground in Africa, we have been in the
carbon markets. I don't even think
financial metrics would justify these
things., there are much worse
things going on with war zones and
rebels fighting over critical minerals
and things like that, but not over
carbon projects. Yeah, that also
a lot of people have this question why
focus there then when the carbon credit
demands is in somewhere else 80% of the
demand comes from somewhere else then
why why focus on the project doing the
projects over there
>> you mean why you doing the projects in
Africa
>> yeah because the carbon credit
demands come from somewhere else
>> yeah because I also going back
that's exactly the point CO2 the climate
change is a global problem so it does
not matter where I save the ton of CO2
>> because in the end the atmosphere is all
for the whole planet, right? So why do
we do the project there? Simply because
you don't have these areas like we're
talking about 300, 000 hectares that you
can reforest that are not being used
that are not being utilized that are not
being used for agricultural purposes
that are not being used like for living
purposes otherwhere in the world. I
think that's that's very unique from
space availability
that Africa has and obviously also to
bring solar lamps to Vienna is not
something that is that has high effect
because we are all connected to the grid
and the grid already is doing it or
trying to transform to renewable energy.
So I think the effect and yeah
the effect of it is just much higher
in the global south and also the
availability and the possibility to do
these projects are there but the buying
part of it is as you rightfully say
then in the in the western countries
there is a clear reason because
we just emit a lot more CO2 and that
that's the whole reason so that that's
why we need to buy or use those
mechanisms And maybe just one one point
to follow up. projects are also
developed in these countries because the
countries want them and the
countries actively lobby to attract more
of them because it's an investment
opportunity for them. And
obviously a lot of light is shed to
Africa because Africa for us Europeans I
mean just sounds exciting but you
could also perfectly use vast areas
of Russia to plant trees. I
mean I think everyone agrees that it's
not the right country to do it right
now. but there you would have a lot
of land but if you look to Austria
there is just yeah the land is not
there and it's it's too expensive.
>> we were talking before about trust in
the system. Would you say that tech I
mean all the technology can replace
trust or build trust in these
countries or in the market also? Yeah,
it shouldn't I it should never replace
trust but I hope it builds trust and
it's honestly that's also our
main obligation to build trust to go
out talk about our experiences I
mean because the projects they
are far away it's very abstract if we
talk about a forest in Congo yeah
people think what they think and they
have the pictures in mind they have
in mind so it's our obligation and our
main goal to explain what we to
speak about the positive impact and
and so on but again in the end I
mean yeah tech should certainly
enable more trust in the market.
>> Yeah I think exactly as Paul said so
technology for us is an enabler. So the
project the people like what the project
does this is the important thing and of
course there has to be always like first
party audits there has to be validation.
So also the standards become much more
strict which is a good thing but in the
end for us what we are saying is don't
trust us trust the data. So we are
trying to really put a lot of efforts on
technology because I think the
combination of having the project access
of being in these countries of
delivering the projects on the ground
and having technology that works there
because for me I've seen a lot
of companies that develop out of fancy
offices in Europe or the US technology
that simply does not work because you
don't have an internet there. So how do
you do it? you need so there
are there are practicalities in these
countries that you can only know and
embed in your technology when you work
there and it's not just like we are
producing technology use it no it's like
what can we do to adapt our technology
that people use it there because only
then it will build the trust because it
will give us the data
>> yeah good we wanted to introduce a
new question during the interviews is to
know your vision if you were given 100
million euros tomorrow. What would you
change in the in the system or what
would you fix first?
>> I you gave us like half an hour to think
about it
>> and also considering that on internet
that people are saying that you already
have that money. So yeah.
>> Yeah. I Oh, that that's easy. we
don't have
no I don't have a good answer. I
think if we are if I'm fully honest I
think with 100 million realistically you
cannot change the system. what I think I
mean going away from the money
side I think especially in Europe
but also in other countries we
we started to make things a little
too too complicated and I'm
I'm referring to a lot of bureaucracy
right now so I think that that's
something that needs to be changed I
think we need more common sense
>> modern system maybe digitalized the
permitting or
>> yes with 100 100 million I would
spend otherwise
I think that that that's something
that that you could do that that would
help a lot.
>> Is it meant like that we as econetics
have the 100 million or that we as
people to create something
>> let's answer both of them. So for
me, if I get now 100 million, I would
use it as a first loss check and I would
pack it full with JP Morgan money and
make the first billion dollar African
Africa fund private equity returnd
driven and invest in businesses, build
the economy.
>> That's that's what I would do because I
think our mission is to showcase it as
investment destination and otherwise at
harsh as it sounds, it's like Paul says
with 100 million you can't do a lot.
just use it as a first loss check to get
more money to build something great
>> or and that's the that's
probably the correct answer.
put it in into education honestly. I
mean but
>> a good one.
>> It's it's it's not a good one because I
said something completely else like five
minutes ago. No, but if you if you want
to give it away to charity, I think you
should give it to education.
>> Yeah. talking about technology and
but yeah yeah yeah it would need it for
sure. Thank you to myself.
>> But would you guys favor more tech
based solution for carbon or more
>> I honestly
>> nature based?
>> No. oh. Tech B. No. I think we need
everything honestly. And I
again now I think there were a couple of
articles about climb works basically
criticizing what they're doing and I
honestly think they the guys doing an
amazing job and they built an
entire economy around it. the
the yeah the time will tell
whether that's the right approach but I
I think everything is needed but
honestly having said that if
you look at the impact per dollar
investment I think from a CO2 angle
you can do a lot more in the naturebased
>> yeah because also like if we if you look
about
>> what core benefits does do these
projects deliver? Yeah. If I if I have a
a vacuum cleaner so to say from direct
air capture, it does its effect and
again now coming back to the underlying
thing or the underlying unit is CO2. But
for me then again it has to be cheaper
than what it is now because we are not
we are not looking in 20 years in the
future like we have to create something
now we have to reduce now. So as Paul
said I think it needs everything. I
think Noak and all of these other climb
works, they have done a tremendous job
in doing what they do. They've created a
lot of awar awareness and I also I'm
against this one versus the other
debate. So, so but usually it comes from
from these type of sectors because if my
thing would cost a€, 000, I also would
need to justify that. But for us,
>> we are not against one or the other. We
are not saying nature based versus
techbased removal. I think it needs
everything but I think the
scalability at the moment as we are
today is in the areas that that we work
on and the massive amount of CO2
that has to be removed can only be
created or removed when we include
nature-based solutions. Who are the big
industries working with you so far or
currently?
>> Yeah, sure. So the big industries
working with us are the big emitters.
>> so it's a aviation sector
producing industries but also the
financial sector. So they are big
enabler.
>> Yeah.
>> and then probably also the
real estate sector. So th those were the
the major sectors where where customers
came from
>> like within within Europe or
>> Yes. Yes. So we very much focus on
Europe and the Middle East on the
buying side.
>> Yeah.
>> and a little bit of Asia. So
Singapore is a very important hub, Japan
and Korea, China a little bit.
>> and also the US although we
yeah we basically didn't touch base with
the US yet.
>> Yeah. I was just reading about Vulpin
they and they were they bought your
credit for funding the Ugandan. solar
grid project, right?
>> No, that's an absolute JBT lie, I
believe.
>> No, no, we have no
contractual relation with first.
>> No. Okay.
>> they also didn't buy
>> maybe maybe Hey guys, where to
buy the credit, ? Yeah, we are we are
talking we are talking to them like
we were together in a round table
with the climate commissioner and our
our our minister Mr. Todnnik a few
weeks ago. So maybe Chad GPT or other AI
mixed something up there. So
>> maybe that's a sneak peek into the
future or future future news.
>> Yeah. No, but honestly for like
steel manufacturers like in broader
terms, obviously becoming
climate neutral is a very big
endeavor. So they basically would
need to change their whole production
and also in all honesty that that
alone cannot be done with carbon
credits. So they need to do something
else. But where carbon credits come in
is basically at the end of the reduction
journey.
>> Yeah. moving forward because time is
flying.
>> Yes.
>> how does it work the econetics model
with the some revenue with local
communities?
>> Do you have some model with that?
>> I didn't get the question.
>> Like if if you have some model to
leave some revenue from the projects
into the community.
>> Yes. So it very much depends from
country to country. some
countries as Tanzania have implemented
laws where you basically need to
give a certain share to the government
and the government gives it to the
local communities. for most
countries the share that ultimately
ends with the government or the local
community is between 10 to 60%..
>> So but very much depending on the
company
>> also can depend on like if the
community themsel is involved for
example in the planting activities
>> if there is an activity that needs to be
done if there is something that needs to
be built through the project. So there
are different models and mechanisms and
and I think one thing very important to
say here is because again this is from
time to time a point of criticism is it
will not work if the local community is
not involved. So if they don't want you
there you will not have a successful
project.
>> So that's also something like where we I
think see a lot of times that people say
but what with the local community I it's
a lot of times the other way around. You
will not have a project if they don't
want you there. So you have to make them
want you there. Explain your project
will explain the benefits what come out
of it and why the project is also
needed..
>> So, yeah, just
>> but also in all honesty it
also doesn't work if like 100% like stay
with the local community because
everyone needs to get a piece of the
cake and be incentivized to do
those projects otherwise they will never
work out otherwise we are back to
charity.
>> Okay. I want to ask Jakob one question
like
>> go for
>> your honorary consul of Uganda what do
you have a diplomatic passport or
something? No, I have a I have the same
passport as as Paul. A very normal
Austrian passport.
>> I can attest to that. But once
in a while he gets access to the VIP
room in TB airport, but that's it.
>> Yeah. Know the whole idea became that as
I said for me I want to promote Uganda.
So Africa as a whole but Uganda where I
lived where I got to know the people
where I have relationships
as a destination where people should go
look but also to visit. So that I think
a honorary console is honorary thing. I
do not get paid neither from Austria nor
from Uganda. As Paul said, the VIP
access is all it's it comes with
>> last time I waited two hours.
>> So there's no free parking, there's
nothing. but jokes aside, so for me
that's that's something where you can
promote the country where I lived to
be to be a like a spokesperson for it
and to use it also as as a bridge,
that
>> Yeah. And I'm I'm very disappointed that
the government of Scotland and
the UAE have not asked me yet. Maybe
it's coming. But
>> maybe maybe you need to buy the golden
visa in UAE now.
>> Yeah, I cannot afford it. But
>> does it create conflict to be
between Austria and Uganda?
>> No. As as I do not get paid from from
from Uganda. I'm I'm I'm neither a
government employee nor nor a PEP or
>> okay
>> or things like that. I do not have any
immunity or diplomatic status. So it
really is a honorary role something that
you do with your own money and
and without any benefits from it and
it's really a promotional role for the
country to be a bridge.
>> Okay, great. I wanted to know because
there is this current voluntary
market.
>> Yes. Yes.
>> Do you think that this carbon border
adjusting mechanism which is the CBAM
bomb cam will kill the monetary system
or they're going to coexist?
>> I don't think it will kill it. I
would need to think about longer than 5
seconds to understand why it could kill
it. I think it will coexist. I
think it has per se nothing to
do with each other. but what I do
think that the voluntary market will
shift more and more into regul regulated
market.
>> What we met with CBAN is that then you
will have a proper framework. You cannot
just do any project. But
>> yes, I think as I see SEAB
bomb as a as a tax for products
outside Europe to basically keep the
EU industry competitive.
>> I think it's not not necessarily
connected to the voluntary carbon
market. But in the sense
you're right that that the VCM
was the starting point, but we need more
regulation. We are getting a lot more
regulation. So every other week a
climate or carbon law pops up somewhere
in the world and that that's a that's a
good thing. So yeah, if you look at
the financial market and think about
the amount of regulation that we have
inside the financial market, I
think that's yeah that that's the
market to look at in sense of
regulation.
>> And Jacob, the more I read the
more I'm like yeah what am I doing with
my life? But you're also for 30 under
you were 30 under 30.
>> Yes, I was. So I think I can advise
everyone to just go to Uganda and start
a meat factory. It at least seems very
interesting your life. No jokes
aside, I for me I tried to do a lot
of things early on. I tried to make the
mistakes very early in my life. I think
the 20s are for experiencing things.
>> Making mistakes.
>> Making mistakes. I think that's that's
one of the most important parts, you
know.
>> I went to Russia to study there in my
20ies.
>> Yes. So you speak Russian.
>> But and I what I would also wanted to
ask you because especially for
you when the questions like questions
come that carbon market they are
delaying industries to cut their
emissions. How how do you react to that?
So I think we try to we tried
already from the start to explain
that. So we need everything at the same
time like we are not saying with one
sentence that all we have to do as a
global community as an industry we just
have to buy carbon credits not at all we
have to reduce wherever it is
economically viable. It doesn't help us
in Europe to reduce when everywhere in
the world no one is doing it and we are
getting out of global
competitiveness. So we should use all
mechanisms that are available. we have
to reduce but to a certain extent we
will not be able to reduce and keep like
economic competi competitiveness you
know other otherwise it's just not
happening and we see that already
there's overregulation in the European
Union like all of the things that are
happening AI the global AI leadership
race and all of these things they're
happening outside of the European Union
and what we are trying to do also with
Econetics is again to build a global
champion made in Austria and this
only happens if you build highly
scalable solutions but if you also focus
on like the journey and the
target and not not just that what
can we regulate next and
let's just forbid everyone everything
I think that has become a
culture in Europe that we focus a lot on
on yeah on forbidding things
>> maybe just to add up and it's just not
it does not reflect reality because the
big emitters if if they would buy
carbon credits also for them like it's
it's it's not a sustainable model to
compensate 100% of your emissions for
carbon credits. No one does that.
>> And we are actually happy in
Austria.
>> Maybe by the way is this podcast carbon
neutral?
>> It will be.
>> It will be.
>> I hope so. where to go. So
after the show we have to we have to
talk
>> negotiate.
>> No. we are making it neutral by
showcasing people like yourself. We
already had two more companies.
>> Yes.
>> one of them they are making carbon
storage possible. One of the most
innovative startup to come from Austria
and another one they're making a
hydrogen usable for iron and
steel industry. So we are doing our bit.
>> Yeah. And I would like to know since
you are inside the market now do you see
some risks that they could collapse the
market in the near future?
>> I p obviously there there's
always a certain market risk.
we don't see it yet. what what we
experienced in the last one or two years
is a lot of tailwinds because
article 6 has finally been implemented
or is on the way to get implemented
after 10 years of negotiations. The
European Union while announcing their
2040 climate target have
acknowledged that it will use carbon
credits to a certain extent namely 3%.
the UAE has recently implemented a
new carbon law. So I think again I
think we are coming back to little more
common sense
>> and I think more and more carbon
credits are acknowledged as a feasible
solution as as part of the game.
>> Okay. And maybe just also to add on
that because I think you guys are doing
an amazing job in showcasing like these
solutions but I think also in the
conversation that we having there is a
lot of like negative questions
how so I think it's it's very
interesting and I'm also curious usually
like in general when we speak with
journalists to understand why is the
carbon market such a controversial
things because I think no one if you
talk to him or her about it can say this
is a bad thing. If we for example just
if we would be in crypto
>> I think that the conversation would be
very different.
>> Yeah.
>> It's it's an interesting
>> I totally understand. One of the thing
that I want to tell you is that we
ask such questions because we want it to
be addressed.
>> Yeah. No 100%. That's what you
>> that's what. It's not your fault.
It's great to have these mediums to talk
about it but while having this
conversation
>> like for me like it's always
like that. So I think it's very
interesting and it's our mission and
and what we have to do to showcase the
positive things of the impact
that these projects have the lives that
they're impacting the financial part of
it that goes back into the country
>> and
>> underlying what great tool it is as part
of climate solutions as part of the net
zero journey not as the only one as part
of it. I think what happened Rahul
from being a very ambitious young Indian
has become a skeptic grumpy vianese.
Hey, hey, no. I've been living here for
7 months. You're learning the fast
comes fast on you.
>> We're fast.
>> We're fast.
>> No. Hey, Paul, on that just
understanding the future of net zero
on the closing insight from you, what
what legal innovation that you think
would unlock no more climate finance?
Now,
>> I don't know. I honestly I think legal
tech that that's no that it won't
help. I think net zero
ultimately will happen because I truly
believe that climate change is a
big problem and the consequences from
climate change they will become
harsher and harsher again that's yeah
come
that basically means that they
>> 10 minutes maybe 10 minutes can be
>> five minutes
>> five minutes okay thank you
>> apologies I didn't mean to screw that
No, no, it's fine. No, it's all good.
>> During the most important question,
legal tech.
>> Legal tech. No, I think honest
answer. I think legal tech can do
little. I think law can have it
play its part as part of the
regulation because regulation in the end
is law and you need smart lawyer to
to build smart regulation. So I think in
that sense that that's the role of
law within the carbon market as such.
>>. Amazing. And yeah.
>> Yeah. I wanted to know your feelings
about the COP in Brazil this year.
What is your feeling that or or or what
you expect that that can happen? You
mentioned the article six. how do you
feel it?
>> I think after Dubai it has gained
momentum. I think last year in Baku it
was great to that we finally have
something operationalized. I think now
the devil is always in the details,
right? A lawyer would say.
>> So I say it now.,
>> I need to try. I just figured out two
buttons. Hey, I
>> maybe not.
>> That's too much for my expectations.
>> Apologies, dear audience.
>> so, so I think like we have to
now build on what has been achieved in
Baku, what has been achieved before in
the consensus in Dubai. Now we have to
make it work. So there is no time to
lose, there is no time to waste. All of
these projects take a lot of time to
implement. We need regulatory
frameworks. We as as project developers,
we as as companies that work in that
space, the investors need clarity.
Otherwise, this trillions of dollars
that are needed will not flow.
>> As you can see, the honorary council is
the true diplomat.
>> Maybe maybe just two cents on BM
where it actually happened. So I think I
mean the cop is good because people
meet there and a lot of people that
criticized the cop argued why not doing
it online.
>> It's just not the same. it would
save some emissions.
>> Were you also in Baku?
>> Yes. Yes. it would save some
emissions but again you
can't agree international politics u in
a zoom call that just doesn't work.
That's the first thing. So I think it's
good that it's online. It's good that it
happens., about BAM, I'm not quite
sure to be honest because I think it
will be an accommodation nightmare. So,
they shipped two cruise boats
there because they're basically Yeah.
No, no, not not enough houses. So, I
mean, one of the accommodation
option for us was to rent a tent for
$48, 000.
>> It's not a joke, by the way.
>> No, it's not a joke. Just a bookie. So,
>> it's just ridiculous.
>> It's ridiculous. And I think they
they really need to change it. And in
the end, I know that Dubai was
criticized a lot because it's in the
middle of the desert, but if you have
basically the infrastructure to host
such a mega event, that just makes it a
lot easier.
>> and it's that's part of the truth
>> because especially then what happens
like obviously the countries who can
afford it the least, but who should have
the biggest voice will not come. No
or they will not come with a big
delegation maybe just with one minister
and that that's not the whole idea of
it. It's just stupid.
>> So you just to summarize you're not so
opimistic
about it. But what would you like to
have as an outcome outcome from
>> I think in Baku it was extremely
important to implement article 6 because
everyone has been waiting for that and
it's just it's just a shame that the
international community couldn't do
better. That's about carbon
compensation.
>> Yeah. Article six is part of the Paris
agreement and that's basically
new UN market that has been pending
yeah quite some time basically a
decade. So I think in BAM and I
recently attended the
pre-organization conference in Bon
>> that usually happens six months
before it will be a lot about yeah
executing what has been agreed in Baku
and that that's my humble wish. Okay,
let's see if that happens. We will
report back from our tent
>> talking about Zoom call from BM.
>> Was it fancy for the money? Was it worth
it,
>> Baku?
>> No. Like the tent that they
>> No, no, it's not.
It's
>> I think 48k for a tent is a little
pricey. A bit.
>> Oh, wow. Yeah. But as much as I like to
share a tent with you.
>> Me too. But
>> no,
>> not for €10 or 48, 000.
>> Yeah, guys. thank you very much. I
just have one la one last question
for both of you. What wakes you up at
night and especially what and what makes
you hopeful?
>> My two and a half two and a half year
old son. Answer to both questions. That
was No, I can't compete with that
answer. I don't wake up.
>> No.
>> Like gladly.
>> That's great. That's great.
>> Sometimes it's like, I No, I
do wake up when my my long long-term
girlfriend Yeah. steals the blanket.
We had a very recent argument about
that.
>> Okay. and maybe some
>> not very visionary answers.
>> But we are honest people.
>> No, it's good.
>> Yeah, that doesn't make me hopeful.
>> Say say that with your son that was much
last word.
>> so maybe yeah to close also some
final statement that you would like to
share thoughts your your moment.
>> Yeah, happy to. So I think we have a
we have a climate crisis. We have a
global crisis. It needs global
solutions. We are trying to contribute
our parts. I think it needs all hands on
deck. So I think if we work together we
can achieve that. It should not be a v a
ver one versus the other. It should be a
combined effort and that's what we are
trying to do.
>> Amazing. It
>> good. And for you
>> and you for you Paul
>> that was the end. I thought that was no
for you final.
>> We want to hear you out.
>> Yeah. Your last.
>> No. I think enough has been said
about the carbon market. I honestly it
was a pleasure being here in front of so
many visitors.
>> Audience first time that we have
audience.
>> Yes. thank you guys. Honestly it was
good fun. It's it's amazing to see what
you guys are doing and yeah I
promised a beer and I did not deliver on
that. So very happy to invite you over
to our office. A couple of them.
>> Amazing. Thank you very much. Much
>> yeah. Thank you for the community to see
until the end today sharing Indian
tea spicy very good and thank you for
the audience
>> today and yeah keep tuned and join to
the next episode and a lot of
questions were not made so maybe we
can make
>> we make another
>> another time so thank you very much see
you
Thanks guys.

High-Integrity Carbon Markets: EcoNetix's Bold Bet on Climate Finance in Africa-TEB Podcast - S1E8"

Market-based solutions are essential

Transparency builds trust

Nature-based solutions are scalable

Investment in Africa is critical