Munich Startup: The last time we spoke, you said that you wanted to enter into more corporate collaborations with Ecoturn. However, that was before your market changed completely. What exactly has happened to the GHG quota?
Marc Schubert, Ecoturn: The GHG quota (greenhouse gas reduction quota) is an environmental policy instrument that aims to reduce greenhouse gas emissions. It obliges companies that place fossil fuels on the market to reduce emissions. To this end, oil companies can take compensatory measures. For example, through biofuels, which are less CO2-intensive than fossil fuels, or through the purchase of electric car certificates. As Elektrovorteil, we act as a pooling service provider between the owners of electric vehicles and the oil companies. We cover the entire process from the application for CO2 certificates to the payment of the so-called GHG premium.
In 2022, it was still possible to generate 400 euros in revenue from certificate trading with an e-car, whereas today it is only around 80 euros. As a result, many companies are forced to operate to their limits or even beyond in order to offer customers the highest possible premium. The price collapse, which has been going on for over 1.5 years, is mainly caused by allegedly fraudulent climate protection projects abroad, as recently reported by investigative research by Frontal 21. The European quota market is being flooded with an oversupply from China. One blatant example shows a chicken coop instead of a Chinese climate protection project. But there are also clear indications of adulterated “biodiesel”, in which palm oil, which is actually banned in the EU, is used as the starting point for the advanced fuel. Environment Minister Steffi Lemke speaks of serious environmental crime. But the baby has fallen into the well, because the GHG quotas will not recover so quickly. Such fraudulent activities not only jeopardize the achievement of our climate targets, but also damage the German startup sector.
Ecoturn has a permanent customer for electric cars
Munich Startup: And how has that affected your business?
Marc Schubert, Ecoturn: The current situation is particularly critical for startups. Numerous young companies operating in the field of GHG quota trading are facing existential threats due to volatile market conditions and strong price pressure. Without quick and effective measures to stabilize the market, many innovative startups could be forced to cease their activities. Fortunately, our business model was designed for large volumes and the highest possible degree of automation from the outset. We have streamlined many processes and continue to work meticulously on this. At the same time, we have increased our market share. We have successfully expanded our network in the area of companies subject to quotas and secured long-term customer contracts at an early stage and do not speculate on possible quota sales prices. This enables us to guarantee that every electric car quota already has a fixed buyer. “Profitable by default”, so to speak. This prevents us – as has happened to other companies in the past – from being left without customers at the end of the day. These and other measures ensure our profitability and long-term stability.
Munich Startup: Was it still possible for you to conclude the planned company cooperations under these circumstances? What exactly do these look like?
Marc Schubert, Ecoturn: Yes, as previously mentioned, we successfully made internal efforts to make the right adjustments at an early stage. At the same time, we expanded our partnerships. As a result, you can find us in the sales journeys of well-known companies time and again. A benefit for all three parties: The customer, who can conveniently use several services, the partner company, which can use the THG-Quote product for its customers as an acquisition and retention tool, and ultimately for us, which expands our core business. We are also scaling into every other market that adopts the GHG quota in a similar form. Last year, for example, we also rolled it out in Austria.
Ecoturn and other quota platforms found federal association
Munich Startup: What options do you have as a startup when your own market is changing so radically?
Marc Schubert, Ecoturn: Of course, we only have a limited influence on market developments compared to the large corporations. Especially not on our own. That’s why we joined forces with a number of other quota platforms last year and founded the Bundesverband THG Quote e. V. (Federal Association for GHG Quotas). Our aim is to represent interests and exert political influence and lobbying. In this way, we want to form a counterweight. It is still a very young market – through proactive action we can also try to work together with market players to develop a fair and sustainable marketplace for GHG quota trading.
We also concentrate on our strengths. These lie in our flexibility. As long as this is given, we can react as a team. At the same time, a wealth of ideas is immense and very important. Furthermore, as already mentioned, processes, expenditure etc. can always be put to the test internally. In the end, the sum of everything ensures another successful financial year.
“We are continuing to focus on our core business”
Munich Startup: What are you going to do now?
Marc Schubert, Ecoturn: We are continuing to focus on our core business. In order to offer our customers a better and more comprehensive experience, we have successively released various great features over the past few months:
- For example, we offer an IT interface for charging infrastructure and fleet systems. This API enables simple, automated data transfer to apply for the GHG quota at the touch of a button. This means that our customers do not lose a single charged kilowatt hour or car.
- We also offer a client function. It allows you to apply for a differentiated GHG quota for subsidiaries or on behalf of other companies. The creation of credit notes is also separated here.
- White label version: As part of a sales cooperation, we also offer a white label version of our product. This also enables our customers’ customers to enjoy a seamless experience in the area of e-mobility services.
- Export functions: For evaluations and other uses, we offer several export functions in the most popular formats.
Of course, we are also exploring opportunities to expand our product portfolio with additional services. More to follow – you are welcome to follow us on Linkedin.
Munich Startup: And how are things looking financially for you?
Marc Schubert, Ecoturn: We are in a good position so far. As a first mover, we were in a comfortable position to build up reserves. At the same time, we are independent thanks to our self-financing, as no bank or investors influence our day-to-day business as external stakeholders. If required, we also offer our individual and major customers a direct payment of the GHG premium as an additional business model. We can do this from our own funds as we were able to increase our liquidity at the beginning. In combination with automation and a capable and reliable team, the current situation is positive.
“The rollout in Austria was just the beginning”
Munich Startup: What milestones are you working towards next?
Marc Schubert, Ecoturn: We have an ambitious target in terms of annual volume, but at the same time we are already looking ahead to next year and want to top ourselves. Further customer-friendly services are currently being developed and we look forward to making these available to all customers in the near future. The recent rollout in Austria was just the beginning and a kind of attempt to become active in another market. As soon as the course has been set for other countries, we want to devote all our energy to them too. This will hopefully be the case by 2025.
