Origin Story Interview W/ Hannes Junginger, Carbonfuture

Origin Story Interview W/ Hannes Junginger, Carbonfuture

Brighter Future

 / 

Dec 13, 2023

#BrighterFuture #entrepreneurship #Sustainability #ClimateChangeSolution #originstoryseries #seekthechange #carbonfuture #carbonremoval #climateaction #carbon #carbonmeasurement #EnvironmentalProtection #CarbonMarket #EmissionReduction

Brighter Future

We’re here with Hannes Junginger, CEO and co-founder of the carbon-removal company Carbonfuture.

Thank you so much for being here with us. Do you think you could introduce yourself and your business?

Of course. My name is Hannes Junginger, 45 years old, a mathematician with many years of experience in the financial industry. I'm married with two grown-up kids. I've always been driven and motivated by protecting the environment and working towards a more just and livable future.

Essentially, our company, Carbonfuture, specialises in carbon tracing. We developed what is now known as an MRV (Measurement, Reporting, and Verification) solution after thoroughly analysing and identifying what was needed to unlock the creation of carbon removals at scale. Carbonfuture MRV documents the amount of carbon stored, the location, the activity responsible, and the duration of storage. It basically tracks what happens in the real world. Based on this information, we enable projects to issue certificates under a third-party Standard (though we do not provide carbon certificates ourselves) which can then be traded on the market.

Additionally, we provide marketplace infrastructure to support these transactions. Our MRV solution integrates with downstream market infrastructure. Carbonfuture currently has 30 employees and is rapidly expanding. We operate in Europe and the US, with employees in five countries.

We provide the infrastructure for the completion of the measurement, reporting, and verification, and then we furnish this data to auditors under third-party Standards such as Carbon Standards International, Puro.earth or VERRA. We started out with Carbon Standards International, which hosts the EBC (European Biochar Certificate). The EBC serves as our foundation, but we have now also onboarded the Puro Standard and are in the process of onboarding the first VCS (Verified Carbon Standard) project, making us standard-agnostic. While we have our own quality criteria and wouldn't onboard any project that is not certifiable under a third-party Standard, we do not have our own standard or self-certification.

If you were to approach someone who isn't very familiar with the carbon market, which is still relatively new, how would you summarise it?

What we offer is assurance for the developing carbon removal industry. This is crucial because every buyer seeking to align their climate strategy or achieve climate neutrality through carbon credits invests in trust for the projects and certification systems. Our MRV serves as the foundation of trust for carbon removal.

The same applies to the supply side as well. A trust layer is essential to achieve sustainable and fair prices over the long term. This is also evident in the market dynamics. Our success in sales can be attributed to both the trust element we provide and the fact that our projects and associated costs are relatively lower than others.

Growing up in Germany, I was heavily influenced by the environmental and peace movements of the 80s, which have been a lifelong focus for me. While my kids were young, I focused on taking care of my family, so my societal engagement took a backseat during that time. But I was fortunate enough to change that when I met Hans-Jörg Lerchenmüller, a friend from Freiburg and a climate tech and cleantech entrepreneur.

Hans-Jörg had been involved in the renewable energy sector, having founded a successful photovoltaics company. After selling the company, he became a business angel and consultant for climate tech startups. In 2015 or 2016, he started to shift his focus towards carbon removal as a crucial aspect of mitigating climate change. He recognised the importance of biochar as a carbon removal technology and invested in a company.

From a commercial perspective, he explored ways to incorporate these activities into viable business models for scaling. This led him to consider subsidising the climate benefits that come with the application of certified biochar. He discussed this topic with me, and eventually, he asked for my help in establishing a framework that could serve as the foundation for a large-scale solution to finance these climate services and provide adequate remuneration. The goal was to make the projects economically viable while reflecting their different climate effects compared to short-lived removal methods like forestry or soil carbon.

This allowed me to combine my professional expertise as a financial mathematician with my motivation to contribute to a more just and livable future.

Based on the progress we made with the initial models and sandbox implementations on the platform, I started collaborating with my co-founder, Matthias Ansorge. Matthias is a brilliant software developer, architect, and mathematician. We did our PhD together more than 15 years ago. This was the right approach and a missing piece in the emerging value chains. As a result, we decided to offer these solutions to the nascent industry and founded a startup.

Let's zoom out a little bit from your startup and look at your personal career journey. Where did it take you, and what were some key points throughout your life before you started Carbonfuture?

As I mentioned earlier, I began my journey in the field of science. I pursued a PhD in mathematics and also dabbled in research. However, I found pure mathematics to be quite challenging. To make a meaningful contribution, you need to be extremely good. While I was good, I didn't consider myself extremely good. This led me to make a career shift and venture into the financial industry. I worked for banks primarily in Switzerland, taking on roles such as risk manager, project manager in IT, and even some involvement in trading. For five years, I served as an advisor and consultant for the banking and financial sector in a broader capacity. I also worked as an auditor at Ernst & Young in Switzerland.

Before starting Carbonfuture, I transitioned towards strategic risk management, specifically within banks. I integrated financial risk management, ESG risk management, and bank strategy, establishing a new function within a mid-sized Swiss bank. During this period, the concept of carbon removal financing solutions emerged. Naturally, I began combining my expertise in banking risk management and solutions with carbon-related topics within the bank.

I had familial responsibilities at a relatively early stage in my life. I became a parent at a young age, starting my family when I was 19 years old. I had to ensure we had enough money to cover rent and other expenses. Now, with my children grown up and having their own great ideas, I have the opportunity to pursue something different.

When you discussed the raw idea of Carbonfuture with your co-founder, how did you feel about building your own business? Is this your first business venture?

Yes, it is my first business, although it wasn't the first idea I had to pursue. This was a truly unique and fantastic opportunity. Additionally, we still developed underlying ideas from the start that have yet to unleash their full potential.

It's worth mentioning why we differentiate ourselves from other companies in this market, particularly those functioning as marketplaces. Right from the beginning, we took two different approaches.

Firstly, we went upstream to the projects and ensured each carbon removal activity was meticulously tracked in as much detail as possible. We are significantly further upstream than any other existing platform. Most of them simply buy and sell certificates or trade credits.

Our uniqueness lies in that, to achieve true scalability, we prioritise making every aspect auditable. This eliminates the incentive to exaggerate our actions for personal gain, as the value we offer is a benefit to society and individuals. In this commercial environment, individuals are reimbursed, which deviates from traditional economic models.

To achieve scalability, having a highly detailed audit trail for every aspect of our operations is crucial. We have prioritised establishing this level of audibility right from the beginning, which sets us apart.

Additionally, we introduce an explicit sequestration curve once the activity is quantified. This curve precisely quantifies the amount of carbon stored at each specific point in time. Instead of simply stating that we remove a ton of carbon, we specify the amount removed and how long it will be sequestered.

This framework allows us to develop powerful financial instruments within our platform. These two distinctive tools will realise their full potential as the market matures and expands. Even at the start, we recognised their significance, which was a motivating factor. We saw something others hadn't noticed yet and believed it presented a unique opportunity. It's both exciting and fulfilling to embark on an innovative and meaningful new venture.

The decision to become a founder of your own business seems to have felt almost natural. It wasn't too big of a leap for you?

It was an enormous leap for me because I have a family to support. Ensuring they can have a decent living is crucial.

Although I'm not religious, I grew up in a society heavily influenced by Protestant ethics. I think utilising one's talents and seizing opportunities is commendable in these ethics. In this perspective, the belief is that these talents and opportunities are gifts from God. If one fails to use them, it is seen as wasting something that was received. While I don't personally share this religious viewpoint, I now have the chance to do something meaningful and purposeful. In light of this, I believe it is essential for me to embrace this opportunity and make sense of my life in my own way.

What would you say have been your biggest sacrifices or compromises to reach where you are today?

The most significant aspect is that I've gone all-in, and it's incredibly challenging. I don't often have the opportunity to relax or take time off.

Sometimes it feels as though my life revolves solely around work. While it is truly exciting and multidimensional, and I get to meet lovely and inspiring people and face growth-inducing challenges, it also means that I rarely get moments of recreation, calmness, or slowness in life.  

And how do you maintain your grounding and ensure good mental health?

The most effective way for me to stay grounded is through running and bouldering, which I love. Additionally, I sometimes practise yoga to exercise my body, and I have a meditation practice that helps me gain self-awareness. However, these activities alone are not sufficient. For example, as the business grows, I consider organising and developing my organisation. I consider hiring individuals who can nurture the company culture, and I decide when and which aspects of the work to delegate. I actively manage these aspects and regularly reflect on them.

When it comes to my colleagues and employees, especially younger ones, I identify their strengths and offer support in those areas. However, regarding myself, I realise that I need to do more. I must be aware and open to recognising, admitting, and working on my weaknesses. Otherwise, these areas needing improvement would cause significant stress. It's a multidimensional task where I must ensure personal growth alongside fulfilling my responsibilities to achieve success and make the most of my life and projects.

What is the most fulfilling aspect of your work?

For me, it's the people. I enjoy interacting with people and witnessing the progression of ideas— from their inception to refinement and, ultimately, the implementation of measures to bring them to real life. It brings me immense joy.

That’s beautiful. How old is Carbonfuture?

The project is four years old, and the company is three years old.

What were the most significant lessons you learned from previous challenges or mistakes?

You cannot anticipate what lies ahead but must be prepared for it. It's a matter of leadership. You must be ready to lead the project and guide the company through the upcoming stage. It involves navigating uncertainty.

It's not just about growing a startup but also about the industry itself. Carbon removal is entirely new, with no established standards, rules, or conventions. The growth potential and expectations are immense, but so are the associated risks, and uncertainty looms large.

To effectively lead amidst uncertainty, you must also be prepared to acknowledge weaknesses and similar aspects. In my current role as the CEO of a promising climate tech startup, I need to be one of those individuals who leads towards a future that inspires and motivates people. I should be a pillar for my team and the broader community. People observe what we're doing and what I'm doing.

I believe learning to lead in uncertainty involves providing the stability and direction people require to stay motivated and contribute to the growth of the sector and its activities, without hesitating or retreating.

Let me provide another example. As we expand and engage in transactions with major corporations, the question arises: Are these corporations engaging in greenwashing? How should we respond to that? Do we operate based on ethical guidelines as a company? This was not a concern two years ago since we didn't engage with large companies. We could proudly proclaim that we were doing good and helping to save the climate.

But now we are stepping into real-world economic situations and must be introspective and explain our actions. Are they genuinely beneficial for the climate, or do they border on greenwashing?

So, where do you draw inspiration and guidance from when it comes to navigating uncertainty and the position you find yourself in? Do you have a personal motto or look up to someone who helps you on this journey?

I thought about this, but I don't have a specific source of inspiration. For me, reliability, trust, and honesty serve as guiding principles. These values are crucial not only in my interactions with people in general, but also in business. They are personal beliefs that align well with our mission of instilling trust in emerging markets. It's the element of trust that truly motivates me. Even when faced with small economic decisions, I prioritise maintaining trust over optimising profit margins. Trust is the foundation for scalability and is a constant source of motivation. Without it, I would find it challenging to dedicate myself wholeheartedly to my work.

Have you ever experienced a significant "Aha!" moment in your personal life that has shaped how you approach certain things or influenced your perspective on something?

There was an incredibly intense experience that comes to mind, and perhaps I've had more "Aha!" moments in the past year than I would have preferred.

We faced a team issue, and it made me realise the importance of not only being a team player and motivating a great team to work toward a common goal but also shouldering a significant amount of responsibility without losing the essence of teamwork.

What future are you hoping to create with Carbonfuture?

Our main goal is to contribute to mitigating the climate crisis. Our approach involves implementing tools that empower individuals working on carbon removal. These people actively extract carbon from the atmosphere and securely store it for long periods. Our initial focus is to provide a solution that offers a wide range of certified removal projects. This will facilitate seamless market entry for these projects and allow them to concentrate on expanding their activities. Ultimately, these activities play a crucial role in mitigating the climate crisis. I hope for this in the midterm, say within the next five to seven years.

Looking ahead to the coming decades, our vision is to establish infrastructure supporting regulated markets and frameworks. These systems will ensure the meaningful implementation of carbon removal from the atmosphere.

We aim to create an environment where such activities can thrive without loopholes. To achieve this, we are building a transparent system that encourages full disclosure and enables comprehensive reporting. Without such measures, actors may be incentivised to exploit loopholes and prioritise quantity over quality. We strive to provide a system that caters to compliance markets and enables gigaton-scale carbon removal. We aim to support future generations and societies in living how we envision for them.

This brings us back to our core values. I am driven by the idea that individuals should have autonomy over their lives. Imagine, for instance, our grandchildren in 30 or 40 years from now. Will they be free to make decisions about travel, employment, and where they live? I aim to fight for and provide the tools that empower future societies to lead fulfilling lives.

What would you like your great-grandchildren, grandchildren, or children to learn from your personal journey?

Investing your energy and talent for a better world is possible. It is possible, meaningful, and you can take the risk. It's not inherently dangerous, and you shouldn't shy away from it. Just go for it and be courageous.

If you could advise young entrepreneurs in the climate space or individuals considering creating a business within the climate space, what would you tell them?

It's really difficult. Firstly, don't hesitate and remain true to your values. Be honest and have the courage to uphold your principles. Perhaps that holds true as well.

Based on my recent observations of other pitches and competitors, I've noticed an excessive amount of misleading information with some companies. It feels like a race to the bottom, and it is crucially important that we fight it: particularly in the clean tech, green tech, and climate tech space.

For instance, if you're competing for marketplace volume or clients, you might try to lower entry barriers and compromise on quality. This is extremely detrimental to your cause. People expect to pay for contributions that benefit society, and it's incredibly problematic if that expectation is not met, to say the very least. So we need entrepreneurs who can achieve success without compromising their values.

If there was one thing you could tell the world, what would it be?

I would wish that, once people’s basic needs were satisfied, they would move beyond the driving motivations of accruing ever more wealth and power. Instead, they should change these drivers and motivators to be more heartfelt. One's own satisfaction should come from having happier people around them and in the world, rather than acquiring more things they don't need. It's about stopping the wasteful use of resources.

What worries me is that if we have more energy, it will be used without replacing fossil fuels. People always want more. And drawing satisfaction from wasting resources is not a good thing. Let's be resourceful. Let's think before burning. Let's stop burning stuff.

I think a lot of us can agree with that. Hannes, thank you so much for spending some of your time with us today. Your company is doing vital work in the carbon removal sphere, and we wish you enormous success with it in the future.

To learn more about Carbonfuture, please see www.carbonfuture.earth.

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