Change Makers: Katrin Puetz, (B)energy Founder and Managing Director (Ep 184)

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Sam Humphreys:

Hello, you're listening to EnergyCents, an S&P Global Commodity Insight podcast where we talk all things energy and finance. My name is Sam Humphreys and I'm joined as always by Hill Vaden. So we've just recorded one of our Changemaker series with the founder of B(energy), Katrin Puetz. And she's also co-founder of BiogasUnite. So this is a biogas company focused on operations within Africa. So it's this small kind of cool looking backpack things delivering biogas to domestic households. Firstly, how are you? And then what do you think people should be listening for?

Hill Vaden:

I am well. I think they should listen to a couple of things, that one this is almost exclusively focused on Africa where B(energy) is operating in 13 different countries where there's a role for biogas to displace firewood in cooking. And so this is very much for, I guess, emerging economies. So B(energy) has been around for about 10 years and BiogasUnite is a new platform that she's working with to be more of an advocate for biogas as an industry that is really, I think trying to democratize some of what's happening with biogas that allows individuals to build businesses where they sell the biogas and or their services to repair more top-down installation of biogas facilities. And so she's doing a lot of different things. So I would strongly encourage people to follow the links both to BiogasUnite and to B(energy). There's even a crowdfunding campaign underway for BiogasUnite as well for those who are interested. Any thoughts from you?

Sam Humphreys:

It's fascinating. It's an interesting business model that they've set up to try and reach those in energy-poor areas where there's some new solutions potentially offer. And there's a lot of work they're doing, like you said, with BiogasUnite and trying to leverage what is already an industry within Africa and initially described it as like the Uber, the bio energy. So it is an interesting thing to watch really, I really enjoyed it. It was a really good conversation.

Hill Vaden:

All right, we'll hand off to that now then.

Sam Humphreys:

Well, hello to everyone listening. You're listening to EnergyCents and I'm here with Hill as always, and we joined by Katrin Puetz. Hello Katrin. How is the going?

Katrin Puetz:

Hi Sam. Hi Hill.

Sam Humphreys:

Well, we are delighted to have you here this week of talking about a very exciting topic, which is B(energy) which is a new biogas company focusing on delivering sustainable energy solutions to various parts of the globe. But I don't want to go into trying to explain what it is. Katrin, it would be great if you could just sort of set everyone up with who are B(energy) and what is your mission statement? What are you trying to do?

Katrin Puetz:

Yeah, thank you very much, Sam. B(energy) is my company and I would say it used to be a social business and started as a social business with the aim to bring small-scale household biogas technology to users mainly in Africa, people who cook on firewood and charcoal. And have everything available that they would need to produce their own clean cooking energy. And that's biogas in our case. And this is what we've been doing actually for 10 years and our-

Sam Humphreys:

So you're not that new.

Katrin Puetz:

Not that new. And our central piece of technology besides the biogas system that we sell, is the biogas backpack that sets us apart from the rest of the biogas sector in Africa because we allow people to actually sell biogas in this biogas backpack and turn their biogas system into a business. So that's what B(energy) focuses on making biogas people's business. We're not so much a technology provider, but we're more of a company that enables people to either sell biogas technology, earn income with the installation of biogas systems or actually sell the gas and the other byproducts of a biogas system for income generation.

Hill Vaden:

All right. And so there's a couple videos that people should look up when they look into B(energy) and we'll put the links in the liner notes of the podcast. And it's really cool images of these giant backpacks that convert, I guess waste to biogas. And then am I right? There's kind of a three-part model to the business where there's a training portion, there's the backpack itself and then an installation portion that allows the biogas to actually get pumped into the dwelling. Can you talk a little bit about the customer experience and how this works?

Katrin Puetz:

Yes. Maybe I should mention and start with the energy or cooking energy reality in most parts of Africa, I'm not sure if this is [inaudible 00:05:00], in Africa about 990 million people still today and the 21st century cook on firewood and charcoal. And there is actually nothing wrong with it if deforestation wasn't such a big problem. That means because there's hardly any forest left, firewood and charcoal actually becomes quite expensive. It's transported over long distances. So it's not easy like you go to the forest and collect it and then you cook. The other disadvantage is that it's very bad for people's health. These are the big disadvantages. Now, with biogas with a very simple, a gas-tight container, that's what the biogas system is. It can be a plastic bag on the ground or an underground brick construction, or it can be just an IBC container like a water tank that you feed with organic waste.

And when I say organic waste, for most parts of those customers that we're talking about now, organic waste is not considered a waste because we're talking about cow manure or animal manure. It's used otherwise in most places, either directly at fertilizer or to plaster houses. But it's a great material that you can use to produce your cooking gas, which is methane. It's half carbon dioxide, the other half is methane, and that's a flammable gas that comes out of your biogas system naturally. If you run it at a temperature of above 20 degrees, it's like an artificial stomach of a cow. So now what is the customer experience? When I started in 2010, '11 in Ethiopia, because I was invited to Ethiopia by the Addis Ababa University to present the biogas backpack and help them implement it and try it out in the countryside. And we installed a few biogas systems in a central marketplace and sold the gas.

And my very first experience and also awakening moment was that people who bought the gas said, "You know what, I'm buying this gas because it's more comfortable to cook on." And honestly I was thinking people would say, okay, I buy it because it's cheaper, because it's not so heavy to carry, it's easier to get." No, it was the comfortability of cooking with a gas stove. And I don't have to explain to you how a gas stove works, but many people in Africa have never seen one because they're used to airing the fire and waiting for half an hour until the charcoal is hot and all this kind of stuff. Here you light the fire and then it's there, you can cook and you switch it off. There's no smoke and nothing. So that's the customer experience, the first one I encountered. Of course, it requires a little bit of work.

It's like 10 hours a day that you have to feed your biogas system with some kind of organic material. But what you also get is a great organic fertilizer. That means the other product from a biogas system is the bio slurry. It's a liquid fertilizer that you can directly use to fertilize your field or your garden. So you have to take care of these two products. They come out of your artificial cow stomach every day as well. This is the kind of work you have with the biogas system, that's the time you need to spend. And the customer experience is, I would say always good when the system functions. The functionality of biogas system, that's systems in Africa, that's a different topic that I'd be happy to talk more about. Then the customer experience can be quite bad because small technical maintenance issues can lead to a biogas system not functioning. And that has largely happened. Yeah, the experience and also the reputation of biogas is unfortunately quite negative.

But for now, when a biogas system works, the technology itself is magical because it solves so many problems. You manage your waste, you produce a renewable and clean gas, you produce this fertilizer that you otherwise have to buy or don't have. That means you increase your soil fertility, your yields, your health, you save money. So there's so much involved with biogas and I would not call it an energy solution, but it's more a system solution.

Sam Humphreys:

So one thing we kind of want to understand is how this works as a business. So we've talked about these backpacks, so people listening, please do go and check this out because I think they're really cool. They look like giant pillows, people carry around like giant balloons. So how is that rolled out? Are people buying standalone infrastructure, so a backpack in the system as individuals? Is it coming through communities? How do people get access to this?

Katrin Puetz:

There are two different business models involved here. It's the B(energy) business that we as a company have where we work with distributors in the different countries. We currently have 13 distributors and two new ones coming on board, in 13 different countries who import the basic components of our system, which is basically plastic bags and stove components. They then work with local installers or technicians to install these systems for the end customer. And the end customer is typically a household that has any kind of organic waste available. And ideally this person or company has enough organic waste to produce more gas than they need for themselves, for their own consumption. That means if you have, let's say 12 cows, you can produce gas for three households. That means our customer is typically not the poorest person in the village, but rather the people who are a little bit better off. They buy a biogas system, they invest into a biogas system, they don't get a donated biogas system.

They invest and they produce that gas, use one full backpack for themselves and two backpacks are sold to their neighbors. And that gas is paid for, based on the price that people currently pay. For example, seven kilos of firewood or three kilos of charcoal. That's what you can replace and that's your price. And if you want to be super competitive, you reduce your price or if you want to use the opportunity, make a good business because people think biogas are comfortable to cook on, you increase your price. So this is something we don't interfere with, but that's how it works.

Hill Vaden:

Is there an approximate price point? If I am one of these people with a bunch of livestock and I say, all right, I'm going to do this, how much do three backpacks cost me? And then what do I need to do? Because I assume that once I put the backpack on and create the gas, there's some sort of infrastructure that needs to move that gas into a house for cooking or a facility dwelling for cooking that is previously relied on firewood. So what's the upfront cost per project, if that's the right word?

Katrin Puetz:

A biogas system of the size for three households costs when it's installed, it always depends a little bit on the country and the import taxes and shipping costs and so on, below 1000 euros. It includes three biogas backpacks and three stores. That means you use one for yourself and the other three you either rent out or lease out to the people who buy your gas. And the price of the gas is on average around 50 euro cents, one cubic meter of gas which replaces your firewood. It was seven kilos of firewood. But there are countries where the price is a lot higher. And in 2016, I think it was, we already did one project where we tried to find out the price of biogas in Kenya and people were willing to pay $1.50. And in Uganda two years ago, I found out that people pay more than two dollars per day for cooking energy.

So then your payback period for a biogas system can be less than a year, if that's the price of gas. And otherwise it's normally typically between one and three years, that's the payback period for your biogas system. Which is completely different from what is typically provided in the biogas sector in Africa, there are about 200,000 biogas systems there. And each one is always for just one single household because there is no business model for the customer.

Hill Vaden:

So you need about 10 hours to fill up the bag and for the process to turn it into gas. Once I fill up one backpack, is that one week's worth on an average typical basis, is that one week's worth of cooking, one year's worth of cooking, one meal?

Katrin Puetz:

One backpack is one day on average. So it's six kilowatt-hours. Depends on the size of your family, but on average a household with five to six people cooks two to four hours per day. That's what you get with a biogas backpack. Some people get very economical with the gas consumption, then you as the producer have a problem because then they keep the backpack for a long time, you run out of storage. So you all have to keep the pressure high for people to use the gas quickly.

Sam Humphreys:

So one question I had is we've talked about Africa being a focus area for you, where else is B(energy) active? Is it reaching other areas where this sort of energy need is required or is it still kind of focusing just within this area?

Katrin Puetz:

I have a little agenda behind the business. That's why my focus has been Africa for the first eight years of this activity. Until 2022, I was active nearly only in Africa, [inaudible 00:14:55] Papua New Guinea or Guatemala, but very, very small because my agenda is to prove that biogas can be implemented without development aid and development aid is very typically implemented in Africa. It's nowhere as dominant as in Africa, I guess sector. So this is my vision, that's my aim and that's why I focus very much on Africa. But since the outbreak of the Ukraine war, in that year where in Germany it looked like we weren't going to have enough gas for winter we had within a couple of weeks after a TV report about our technology came out, we had 1000 requests from Germans to get biogas, to get prepared for the gas pipe shuttle. But since then we're actually also selling in Germany and in Europe. But it's still comparably small and it doesn't help with the vision, to be honest. Yeah, it doesn't help to prove the vision.

Hill Vaden:

In the 13 countries in Africa that you're working with, is it a continuous pocket of countries? Is it all over Sub-Saharan and throughout Africa or can you talk a little bit more about that? And talk a little bit more about the aid? I know that's something that you've spoken often about is the, I guess some of the unintended consequences of aid that may impact this business or even the customers.

Katrin Puetz:

So we are all over the Sub-Saharan African continent. Yeah, all over Sub-Saharan Africa. I started in Ethiopia, but by now we're in Senegal, we are in Benin, in South Africa, in Namibia, Botswana, it's really all over. But some countries come, some countries go. It's always fluctuating because then you have sanctions here, then you have war or civil war or curfew. It's quite a dynamic field of activity. For example, my very strong partner in Sudan, she had to flee the country and now she's working in Oman. She just shifted her business to Oman. So now we're also working in Oman actually. But now with the aid, this is really my big passion to show that there is a better way to implement biogas, then pushing it into Africa through aid money. And as I said, I started in Ethiopia and Ethiopia actually has the biggest national biogas program on the continent.

It started around the same time when I started with biogas in 2010. And until the beginning of last year, January 2024, this biogas program was financed by the EU and it installed about 46,000 biogas systems. For 46,000 households, like individual household biogas systems across the continent. And from the very first moment I heard about these national biogas programs, I was very skeptical that this could work because it's really like, okay, we Westerners and I can say this, we come, we put you a biogas system in the backyard. And then you put your cow dung in there and then you have gas. Bam, do this. We pay for it. Yeah, this is kind of the mentality. And so, now tell me what's the incentive for people to do this? Because the benefits of this is in my opinion, too small. That's why I from the very first moment developed the biogas backpack because I believe the actual reason for people to cook on firewood and charcoal is not because they love it, but it's because of poverty.

They can't afford other sources of energy or they're not available, but they're not available because it's not worth going there because people can't afford them anyway. So it's a vicious cycle. So if you don't tackle the problem of poverty, you can give people anything, it'll not change anything at all. And this has happened now. I am very sad to say that I was right. The situation is 80% of the biogas systems in Ethiopia do not function. The program has ended and now what comes next? So this is what I'm working on now. This is kind of the transition from, okay, 10 years of aid free biogas. We've survived, we're not rich but we've shown it's possible. Yeah, we have 13 African distributors who believe it needs to be done that way, who struggle as entrepreneurs on a market that is heavily distorted through eight projects and programs that subsidize their technology.

So now as an entrepreneur, how do you compete? In our countries and our industrialized nations, we have competition law, we have anti dumping regulations to prevent unfair competition. But what we do as the Western Africa is exactly that. We create extremely unfair conditions on the local markets by randomly implementing subsidized projects where the private sector could actually take care of the problem. So this is the situation in many countries, you have so many projects that private sector struggles to survive because they can't compete. And that is in two ways devastating because that's not how you fight poverty by destroying private sector. And that's not how you fight climate change. And the biggest contribution of Africa to climate change at the moment is not the industrial activity, it's deforestation.

And so with biogas, you could tackle both but you have to radically change the approach. And I think we can take it as a learning. We can say okay, 10, 15 years biogas programs. Now we should know, let's change the approach and now let's do something little bit bigger and more impactful.

Sam Humphreys:

So your presence across different media platforms, you've talked about BiogasUnite, which I think is a key part of this. So for people listening, can you explain the role of BiogasUnite within the biogas economy within Africa?

Katrin Puetz:

Thanks, Sam. This is really a project, or how can I say, a movement very close to [inaudible 00:21:10]. Biogas Unite, the name already says it actually, I'm trying to unite the entire biogas sector or maybe even energy sector around biogas because I don't want to accept that biogas stays a niche product that actually fails because it could be so beneficial. And the initial aim was to bring the private sector together, like really the African private sector, to have a voice and fight for their right as entrepreneurs to really be protected and to do that job. But now we've further developed the idea and it has become much more than that. And we currently call it the Uber for Clean Cooking because everybody knows Uber. So it's a digital platform that will allow everyone who has a biogas system already installed through those national biogas programs, to register their system. Just tell us where is it, which technology is it, does it have a problem or not?

And then all the technicians on the continent, and there are thousands also being trained through these programs, all these technicians can also register and tell us which services they would provide. And then we match biogas systems that have failed with technicians and give them a repair voucher through the platform to get their biogas system repaired. Hopefully through the support of those organizations that have installed the systems in the first place, because we are now offering to repair the systems, make them work. And then once these systems are functioning, people can use this digital platform, which is the Uber and Airbnb to market their excess biogas with biogas backpacks, to market the access bio slurry. That means the fertilizer they produce and do not need for their own consumption. Many people don't have really a use for the bio slurry, so market it through the platform.

And the third one is, and that brings in the investment, is the carbon credits. Now, at the moment I want to mention how it's currently done with carbon credits. So a lot of carbon credits are introduced into the biogas sector. And what the companies that take those credits or that generate the credits do is they subsidize their technology. So more people can afford a biogas system. But I think the better way is because that distorts the markers, if the people who produce the gas get paid for the credits. So now you have 12 cows, you produce three cubic meters of gas per day, that means you save 25 kilos of firewood per day. Why are you not paid for those emissions that have not been cost? And that way you as a person who has the poverty problem, the not income opportunity problem, the cooking of firewood problem, why don't you earn this money so you get an income?

And this is and that's what we're trying to do, a kind of small-scale business for people on the ground that is supported by the big African industry players. For example, the oil and gas industry, there is a lot of need for carbon offset. There is a need for CSI projects. So what we're trying to do is channel all these funds that are available for good and support of the local population, channel it through BiogasUnite into the cooking energy sector because especially energy companies, I think the best thing they could do is bring their expertise and use it in the energy sector rather than building hospitals or schools or planting trees. So this is kind of what we're currently generally getting started and bring everyone on board who's active in Africa, and also those industries that export to Europe because CBAM which I know you've discussed here at this podcast, a new regulation is coming into place which is a carbon tax. Although they don't like to call it that, but it is.

And if African products already had a reduced footprint through BiogasUnite, I think they could have a market advantage when they come into our markets here. So it's all a little bit connected and maybe sounds a little bit complicated, but it's a completely new way of thinking about biogas, not just an instrument to stop people from deforesting the area but it's a business and it fights poverty.

Hill Vaden:

So this is really interesting and let me try to explain it back to you just so that you can correct me in case I'm misunderstanding it, because we began the podcast talking about B(energy) which is a company that's been around for 10 years. And is a, I'll call it, a profit-seeking though it's got some activism kind of side to it in terms of improving the output of biogas, removing the need for firewood, improving the life of these people who are still cooking with firewood. So that's B(energy). BiogasUnite is a partner to B(energy) in the broader sense that biogas is already being rolled out through the African continent through some of these aid-directed ambitions. And some of those projects are less functional than they should be. And so this is a platform that connects the installers or the repairs and helps to better manage the infrastructure and results in carbon credits to individuals.

Is BiogasUnite a non-profit entity or is it another profit-seeking... Is it like Uber and Airbnb in the sense that it's a profit-seeking platform for these individuals? Can you talk a little bit about that? And tell me if I've completely butchered the relationship between B(energy) and BiogasUnite?

Katrin Puetz:

You didn't butcher it at all. It's pretty correct. We can call it's a platform for the private sector in Africa. It's not for B(energy), it's completely independent of B(energy) but we are one of the players that will benefit from it. Everyone who does an honest biogas business in Africa will benefit. So all of the African entrepreneurs I would say, because it'll be easier for them to sell the technology, to be connected to customers, to make sure their systems work, maintenance services. And it'll help them to market the idea of biogas because you can offer a business model to your customer, which is real. It's on your phone, it's immediately there. So is it a for-profit or non-for-profit company, is a good question. We haven't decided yet because we are at this stage now that we have the concept completely clear, we know how it all needs to go but we want to implement pilot projects. And ideally in two very different countries.

And we are currently in talks with the Ethiopian government to repair 1,700 biogas systems in the country, try out this and introduce this business model with repaired biogas systems. And the other pilot project could be in a country, it could be Nigeria or South Africa where there's hardly any biogas sector and we install new biogas systems. And why we want to try this, the case that we've presented also at the African Energy Week in Cape Town in November is, for example, Shell Nigeria produces nearly a 100 million barrels of oil per year. This is about 40 million tons of carbon dioxide emissions. To reduce or offset these emissions, you would need to build around two and a half million biogas systems. So this is an investment of 250 million euros per year. Over 10 years we built this capacity and from then on your oil production is quote-unquote "carbon-neutral."

So this is kind of the scenario we want to introduce. And I think this whole idea of biogas at a completely different scale because within these 15 years of biogas implementation now, so far only about 200,000 biogas systems have been built. But the potential is 110 million from dairy cow manure alone, that could be run with dairy cow manure. So you can power all the households with the organic waste that's available across Africa. So if we want to really make a difference, we have to think at a different scale. So whether it's going to be a for-profit or non-for-profit company is really up to our partners who would join us to decide with us. We're not doing this for the sake of becoming rich, but we're doing it for changing a mindset and to give the technology a real chance.

Sam Humphreys:

So I'm just looking at time now as we're about to wrap up, but you did mention Africa Energy Week. So full disclosure, one of our colleagues, friend of the podcast, [inaudible 00:30:16], pointed us in your direction. And I believe that you spoke to another friend of this podcast, NJ Ayuk which was very exciting. So it's been great to have you on. But as we wrap up, what we would like to know, for those looking at the energy or biogas in general within Africa, what should we be looking out for over say the next six to 12 months be it business or developments within the industry?

Katrin Puetz:

So what I hope we can be looking out for is the first and biggest biogas initiative of its kind that will be BiogasUnite, that brings people and players on board of the clean cooking sector that have never thought about being a part of it. And that means governments work together with aid organizations, work together with industry and the private sector. And speaking of NJ Ayuk, I can only say NJ has been a great supporter of our initiative. And we have an endorsement from the African Energy Chamber to the oil industry, which is of great support to us because we're basically unknown. Although I have been at the African Energy Week for four years now. So this is great support. We have high level of support and I believe together with these strong partners, we will bring something into the market that's new and kind of revolutionary.

Sam Humphreys:

Awesome. Well, thank you very much. Hill, anything else to add before you wrap up?

Hill Vaden:

No, I've got tons of more questions but we're out of time. But this has been very interesting. So we're very grateful for the conversation and I look forward to watching both BiogasUnite and B(energy). Yeah, this has been very interesting. So thank you.

Katrin Puetz:

Thank you very much for having me.