Munich Startup: When we last spoke, you said you wanted to close more corporate partnerships with Ecoturn. That was before your market changed completely. What exactly happened with the THG quota?
Marc Schubert, Ecoturn: The THG quota (greenhouse gas reduction quota) is an environmental policy instrument designed to reduce greenhouse gas emissions. It requires companies that put fossil fuels into traffic to reduce emissions. To do this, mineral oil companies can take compensatory measures. For example, through biofuels, which are less CO2-intensive than fossil fuels, or by purchasing electric vehicle certificates. As an e-mobility advantage provider, we act as a pooling service provider between electric vehicle owners and mineral oil companies. To do this, we handle the entire process from applying for CO2 certificates to paying the so-called THG premium.
In 2022, you could still generate 400 euros in revenue through certificate trading with an electric car, while today it’s only about 80 euros. Because of this, many companies are forced to operate at the edge of their limits or even beyond to offer customers the highest possible premium. The price decline that has been ongoing for over 1.5 years is mainly caused by allegedly fraudulent climate protection projects abroad, as was recently reported by investigative research by Frontal 21. The European quota market is being flooded with oversupply from China. A striking example shows a chicken coop instead of a Chinese climate protection project. But there is also clear evidence of adulterated “biodiesel,” in which palm oil that is actually banned in the EU is used as the raw material for the forward-thinking fuel. Environment Minister Steffi Lemke speaks of serious environmental crime. But the damage is done, because THG quota rates will not recover quickly. Such fraudulent activities not only endanger the achievement of our climate goals but also harm the German startup industry.
At Ecoturn, the electric vehicle quota has a fixed buyer
Munich Startup: And how has this affected your business?
Marc Schubert, Ecoturn: For startups, the current situation is particularly critical. Numerous young companies operating in the THG quota trading sector are facing existential threats due to volatile market conditions and strong price pressure. Without swift and effective measures to stabilize the market, many innovative startups could be forced to cease operations. Fortunately, our business model was designed from the outset for high volumes and the highest possible degree of automation. 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 buyer contracts early on, rather than speculating on possible quota sales prices. This allows us to guarantee that each electric vehicle quota already has a fixed buyer. “Profitable by default,” so to speak. This prevents us from ending up without a buyer at the end of the day, as has happened to other companies in the past. These and other measures secure our profitability and long-term stability.
Munich Startup: Under these circumstances, were you still able to close the planned corporate partnerships? What exactly do these look like?
Marc Schubert, Ecoturn: Yes, as mentioned before, we made a successful effort early on to turn the right levers internally. At the same time, we have expanded our partnerships. So you can find us again and again with well-known companies in their sales journey. A benefit for all three parties: the customer, who can conveniently use multiple services, the partner company, which can use the THG quota product for its customers as an acquisition and retention tool, and ultimately for us, which expands our core business. Additionally, we are scaling into every other market that adopts the THG quota in analogous form. For example, we have also been rolled out in Austria since last year.
Ecoturn and other quota platforms founded a national association
Munich Startup: What options does a startup have when its own market changes so radically?
Marc Schubert, Ecoturn: Compared to large corporations, we naturally have only limited actual influence on market events. Especially not on our own. That’s why we joined with some other quota platforms last year and founded the Federal Association THG Quota e.V. Our goal is to represent interests and exert political influence as well as lobbying. With this, we want to create a counterweight. It’s still a very young market – through proactive actions, we can try to work together with other market players to develop a fair and sustainable marketplace for THG quota trading.
Additionally, we focus on our strengths. These lie in flexibility. As long as we have it, we can react as a team. At the same time, the wealth of ideas is immense and very important. Furthermore, as already mentioned, we can regularly scrutinize processes, expenses, etc. internally. The sum of everything ultimately ensures another successful business year.
“We continue to focus on our core business”
Munich Startup: How do you proceed now?
Marc Schubert, Ecoturn: We continue to focus on our core business. To provide our customers with a better and more comprehensive experience, we have successively released various great features in recent 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 THG quota at the click of a button. This way, our customers don’t lose any kilowatt-hours charged or any cars.
- We also offer a multi-tenant function. It allows subsidiaries or companies acting on behalf of others to apply for the THG quota differentiated. Credit creation is also separate here.
- White-label version: As part of a sales partnership, we also offer a white-label version of our product. It enables our customers’ customers to have a seamless experience around e-mobility services.
- Export functions: For evaluations and other uses, we offer several export functions in the most common formats.
Of course, we are also exploring ways to expand our product portfolio with additional services. More to come – feel free to follow us on LinkedIn.
Munich Startup: And how does it look financially for you?
Marc Schubert, Ecoturn: We are in good shape so far. As first movers, we were in the comfortable position of building reserves. At the same time, we are independent due to our self-financing, since no bank or investors as external stakeholders influence daily business. If needed, we also offer our individual and large customers direct payment of the THG premium as an additional business model. We can manage this from our own resources because we were able to expand our liquidity early on. 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 for annual volume, while at the same time we are already looking ahead to next year and want to surpass ourselves. Additional customer-friendly services are currently being developed and we look forward to making them available to all customers soon. Most recently, the rollout in Austria was just the beginning and a kind of test to become active in another market. Once the stage is set for other countries, we want to devote ourselves to them with full energy. Hopefully, this will be the case as early as 2025.
