Climate Change recalls us every day how important it is for the World to accelerate on its path to decarbonization. Today, the Water Industry is everything but carbon neutral: yet this could change today and at scale if we do it right! How? With a carbon-negative fuel.
You already know that fuel: we’re talking about biomethane. But with a twist! By leveraging synergies across a city’s departments, biomethane production can grow on steroids at scale and today. How can waste and wastewater better work together? Let’s explore:
with 🎙️ Kunal Shah – Chief Growth Officer at Anaergia and council member of the World Biogas Association, the Singapore Water Association, and Imagine H2O Asia.
💧 Anaergia ambitions to convert waste into a carbon-negative fuel for a sustainable future.
What we covered:
🔸 How we only tap into a fraction of the biogas potential today and why
🌎 How biomethane can change the Water Industry’s carbon path at scale and today
🤝 How beyond just wastewater’s organic potential, there’s an incredible synergy to develop with other waste streams and how to leverage it
⛽ How a wastewater treatment plant can finally become a water resource factory, producing carbon negative fuel
💰 How achieving this shift will prevent cities from disposing of valuable waste in landfills while increasing their overall revenue
🧑🤝🧑 How Climate Change and Decarbonization talks should be integral parts of a modern company’s culture
3️⃣ The three sources of waste Anaergia leverages to feed its renewable natural gas supply chain
🚀 The potential and limitations of all the current fads around new gas and energy sources
⏲️ The scale at which a biogas project becomes viable and the secrets to fast-track payback times
🧱 How breaking a Chinese wall inside a utility family actually changes the name of the game
🌟 How the north star of utility decision-makers is evolving and how resilience trumps all other KPIs
📆 How some still pursue fluffy targets while forward-looking utilities have clear marks with year-by-year rollouts
🌱 How challenging it is to lead complex project sales in the Water Industry as a young professional
💵 How much of a game-changer it was for Anaergia to walk the talk and finance its own endeavors from Day One
3️⃣ The three bottlenecks of Anaergia’s growth (that don’t include the usual suspects)
⚡ How Anaergia intends to become the “Tesla of Renewable Natural Gas” and how they execute that vision
🧑🏫 How the Water Industry is a living MBA for young water professionals, how they are desperately needed, and how they can get support
📈 The meaning of “Anaergia,” the common pitfalls of water entrepreneurship, resource recovery, Anaergia’s Ideal Customer Profile, Developing projects, Having skin in the game, Becoming a management partner for your customers… and so much more!
🔥 … and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨 🔥
➡️ Send your warm regards to Kunal on LinkedIn
➡️ Check Anaergia’s website
is on Linkedin ➡️
Teaser 1: The One Word that S*** Scares Utility Bosses
Teaser 2: The Only Utilities Anaergia is taking seriously (and Why)
Will be published on Thursday!
Teaser 3: How Anaergia is Chased by Money (and Why)
… wait for Friday!
Teaser 4: The Water Industry is a Live MBA
Live here on Saturday!
Infographic: How a Carbon-Negative Fuel powers decarbonization at Scale TodayInfographic-Kunal-Shah-Anaergia-Carbon-Negative-Fuel-Biomethane-to-Save-the-World
Table of contents
- What we covered:
- Teaser 1: The One Word that S*** Scares Utility Bosses
- Teaser 2: The Only Utilities Anaergia is taking seriously (and Why)
- Teaser 3: How Anaergia is Chased by Money (and Why)
- Teaser 4: The Water Industry is a Live MBA
- Infographic: How a Carbon-Negative Fuel powers decarbonization at Scale Today
- Full Transcript:
- Introducing: Anaergia
- Introducing: The Singapore Water Association
- Being young in the Water Industry can be pretty challenging
- Mentoring young water entrepreneurs is a way to give back
- Introducing: the World Biogas Association
- The reason why Biomethane is a better carbon-negative fuel than Hydrogen
- Today, we only tap into about 8% of Biomethane’s potential
- Anaergia enables to tap into more organic streams to produce carbon-negative fuel
- Rialto: a concrete roll-out example
- Carbon Neutral and Carbon Negative become realistic, today, at scale!
- Biogas still represents a small fraction of the World’s Gas Consumption
- Forward-looking utilities have a clear roadmap towards decarbonization
- Private-Public Partnerships to skyrocket decarbonization
- Anaergia has been powering decarbonization from Day 1 by developing its own PPP projects
- Money is not the bottleneck. Incredible?
- Singapore will be a hub for further growth in ASEAN
- Anaergia’s business model and how it adapts to local specificities
- The biomethane industry is still in the early stages of its S-curve
- The interconnection of sludge management and PFAS removal
- Anaergia’s road to impact over the next five years
- Rapid fire questions:
- Other Episodes:
These are computer-generated, so expect some typos 🙂
Get Season 2's Summary!
Antoine Walter: Hi Kunal; welcome to the show.
Kunal Shah: Hi, Antoine; thanks for having me here.
Antoine Walter: Actually, you are having me here. That’s the interesting thing because I’m visiting you. I’m really happy to be in your offices, which gives me an opportunity for quite a special postcard because we are at Anaergia’s office in Singapore.
So, two opening questions. First, what is Anaergia for someone who wouldn’t know it, and what are you doing here in Singapore?
Kunal Shah: First of all, welcome Antoine to Singapore and to our offices here. I always say that Anaergia’s core essence is in the meaning of the word. The word is Anaergia which means anaerobic energy.
That’s the meaning of Anaergia and for everybody else in the world. We are one of the world’s largest organic waste technology. Listed on the Toronto Stock Exchange. Canadian headquartered but pretty much global. So we have built facilities and now in over four continents. We have one of the few companies in the world who treat anything organic waste wastewater sludge that covers the water sector solid waste, a municipal solid waste and food waste that covers the waste space.
And then the third one is what we call agri food waste, which is food waste from industries. Waste from agriculture, like how many are poultries and dairies. That’s why I call it the world’s largest platform to treat any kind of organic waste. And we convert these through a series of proprietary technologies into useful products.
So I would say we are maximizing resource recovery from the world’s waste streams, accelerating decarbonization at mega scale today.
Antoine Walter: So maximizing resource recovery, decarbonization, those are topics that we like to explore with you a bit more in depth in just a minute. But I like to start by getting to know you a bit better.
Introducing: The Singapore Water Association
And actually we are in Singapore and you are quite active in Singapore. I’ve seen that you’re the youngest council member of the Singapore Water Association. So what do you do there? What is the Singapore Water Association and what is your role?
Kunal Shah: Singapore Water Association is one of the largest water associations in Southeast Asia, as we all know, and you must have felt it when you’re here that Singapore is the water hub.
I would even call it a global water hub. Now, given the amount of companies we have, given the amount of R&D, which happens and the given amount of market leadership and I would say visionary growth path, which the biggest utility, which is PUB has created, and imagine just one utility has created billion dollar industry employing thousands of people across various sectors.
So this association kind of brings that all together. It’s an interesting thing to have a young voice on the association. And what we have seen is that the association has grown just in the last 15 years from four or five companies to 306 members today. So we are. Considering ourselves as a gateway for companies across the world to come and if it could be of any help in any way to establish here or move into Southeast Asian region you have my contact details.
Being young in the Water Industry can be pretty challenging
Antoine Walter:You mentioned that the young voices, and actually I was thinking, you know, if it’s a global hydro hub and it has this element of innovation, maybe the aspect of being young is an asset, which is not always the case in the water industry. So what do you think of that
Kunal Shah: Probably, I have to remind myself, so when I started in the water space and my alma mater, which was VA Tech Wabag obviously the water industry is what I call a agent club In the right spirit either you have white hair or no hair to be taken seriously.
And this is an industry which is beyond technology. This is an industry which is beyond just financing and transactions. This is an industry which is built with relationships, emotions, trust. And I would also use the word like it’s like a family, right? And when you are a young guy wanting to sell a 30 or a 40 million wastewater contract to a large utility, which is a bureaucratic utility, A, you’re not considered seriously.
B, the trust factor is missing. And Cs that Yeah. You know, who are that? So I think being young, Was fortunate enough to have advisors and gurus , to help me navigate this. And I’ve learned it the hard way to maneuver all these hoops and hips. I would say that doing a water sale, if you’re not selling a pump and a pipe, if you’re doing a complex water sale, and I’m sure Antoine, you will raise with me that it’s a complex sale.
Water Industry sales are complex sales
You deal with utility on one hand, and the utility has its own organization structure. You have consultants to deal with, you have city politicians to deal with. I’m talking about a municipal contract, and then you have contractors or subcontractors if it’s a new country and then you have vendors and then if you have a BOT project, you go to the next level of complexity of land permits approval, e study.
When you deal with something like that, there is no one door you knock and you convince that person and you get the job. You have to deal with multiple stakeholders. So I think as a young person, we had all the energy to do that and nothing to lose. Right. So fall, get up next day and move on. So I think the young people from this message I would like to pass on from the podcast is that it’s an amazing space to be for anybody young.
What I say is that when, you do work in the water space and in so many countries, you actually don’t need an mba. And I think that I’ve done my live MBA in the water space, so deal with relationships. You deal with geopolitical issues, you deal with real issues on the ground, and I think youngsters have a massive role to play in this space.
Selling in the Water Industry is a tough but incredible MBA
Antoine Walter: I fully agree with the MBA elements. I said it on that microphone. To me, that podcast is my MBA because I. Getting some shares of experience of all the people I’m interviewing. And I have to say absolutely right. When you visit an industrial park you try to understand what they do because you have to, even if the water is a byproduct or is something which is just there in the background, you still have to understand what they do.
I guess people with a real MBA might be angry at us, but for saying that, But I agree with you. You mentioned guru, an advisor, and You receive that and now somehow you get it right. You’re trying to share that as well because you’re working with, Imagine H2O as an advisor.
So is it a way to pass the baton for you?
Kunal Shah: Yeah, I mean, probably upbringing, I always believe in the word karma which is popular in some parts of the world that you know, what you give comes back or you give it one hand and you receive it another. So it’s always a two-way traffic. Very fortunate to have those gurus and even now our CEO and chairman Andrew Benedek is one of the biggest gurus I have right now to to give us a wisdom of 55 plus years of industry experience in a short time.
Mentoring young water entrepreneurs is a way to give back
Right? So I believe that. Through mentoring startups or even companies from other part of the world who may want to enter Asia and likewise Asian companies looking at going into Western Hemisphere. There is always some learnings to be shared and discussed in brainstorm, and I’m just amazed by the quality of young waterpreneurs coming out and if we could even help them in a way a little bit.
And I think if that can correct the course of their direction it, it’ll be a very happy feeling that you get a good night’s sleep after that.
Antoine Walter: So what’s the number one mistake they keep doing, which you tell them, No, don’t do that.
The few common mistakes you shall avoid as a water entrepreneur
Kunal Shah: Number one would be tough Antoine actually, there are a few common mistakes which I have observed.
And I will limit that to the Asian perspective. So when somebody has a unique technology Not many, but most of them think that it’s like an iPhone. Everybody has to buy. And let’s face it, in the water sector, there is no one kit which solves a customer’s entire problem. So I’ve always told them that maybe they have to take one step back to go two step forward.
Is that. , whenever they’re trying to address a particular piece of market, they have to study the totality a 5,000 feet view, a helicopter view, as we say to look at the whole solution and then try to fit in their technology with like-minded partners. So I always tell them about this concept of real partnership and not being
very concealing about the technology they have. Maybe they’ll come out with something unique. That’s one thing. The second one was that the point which I just mentioned, that you knock on a door and you believe that probably you’re from MIT and Stanford. So somebody would just buy it. I think it’s more than that.
Commercial and Business Model innovation is as important as technology (if not more)
You got to bring in technology, but you’re also gonna bring in commercial offering. You’re also gonna bring in relation. You also have to develop the trust. And in all the sales I’ve done so far, I’ve figured out that when you have trust and relationship build there is a much more healthier discussion because both parties win.
And that is something which I tell them that consider not from what you want from the guy and what you can sell, but also always think that what the customer really wants and not forcing the technology. And last but not the least is Antoine, you may have observed over the podcast is that when you would’ve spoken to people who have come up in the hard way in the 1970s and eighties and nineties, let’s face it, there were not many grants available.
They were not many free incentives available. and well that’s not a bad thing because that always pushes the technology or reduces the go to market by maybe a decade. But I think completely relying on grants to be able to push forward a product and market launch, it may not be the right approach.
You always need a mixture of element of some skin in the game, some grant. And the other thing, again, I’ll stop here, but there are some common things which I see which can be improved. These are very simple things. No rocket science.
Introducing: the World Biogas Association
Antoine Walter: So we addressed the Singapore Water Association, what you’re doing with Imagine H2O, but that’s not all you do because you’re also a council member of the Word Bio Gas Association.
And still, that’s not your main job because your main job is to be the Chief Growth Officer at Anaergia. What’s your fuel for all that? what makes your day and what pushes you to be so active?
Kunal Shah: I think the fuel is passion towards this space. When I started in the water space that space really got me just crazy and such a beautiful space. And then now with Anaergia, I also got exposed to the waste space and I figured out that the end product which catapults this space forward is RNG, Biomethane, or biogas, which is a product which touches both the water sector and the waste space.
Biomethane: a Carbon-Negative Fuel
And I was given the opportunity to represent Asia Pacific and youth and the wastewater space at the World Biogas Association. So I feel proud that there is a voice of this wastewater space that wastewater sludge can decarbonize or has the potential to supply green gas or biotin or rng, different nomenclatures today at scale.
And this should be represented at this global association.
Antoine Walter: To switch to our deep dive, I’d like to remind you of our first encounter. Actually we were both at the Global Water Summit in Madrid and luck, or random or whatever, put us on the same networking table and we were discussing hydrogen and I just had discussed with a couple of companies active in that field doing turquoise hydrogen production by pyrolysis on wastewater treatment.
So I just brought up that idea and that sounded to me like something really brilliant, like really great. Like a good prospect as to how to solve two problems at once. And you cut me off like very straight. It was clear it was constructed and you just explain how that makes today little sense.
And I thought, oh, that guy may know one thing of two and that’s why I really wanted to have that discussion with you. But for all the ones which are not sited at that table that day, what’s the problem with turquoise hydrogen production on the wastewater treatment plants?
The reason why Biomethane is a better carbon-negative fuel than Hydrogen
Kunal Shah: First of all, Antoine no offense I kind of a straight shooter, so I wanted to come to the point because that round table was only for 10 minutes.
So I absolutely, and probably that’s the reason which Destiny made us meet again because of that point. So coming back to the question and the topic of green hydrogen again, why the short, crisp, constructive answer is because at Anaergia we’ve done a lot of work. We are doing a lot of work. And we have seen this whole fad and fashion for green hydrogen.
It’s like either you are in or you are out. But I again repeat as what our chairman say is that the problem of climate change is so big and it is so widespread. It touches every country, every human being on planet earth, that everything has the space like green hydrogen, like RNG or biomethane, like biogas, like biogenic CO 2, like sustainable elevation, fuel, like any green fuel, everything has a space because the problem is so big that if you have to move the needle, everybody has to work together.
It better leverages existing infrastructure
Now, coming back to the point of the Madrid discussion was that, is waste water infrastructure an interesting ecosystem to house a green hydrogen building asset? And the answer there was that when we did our analysis even though today when people are thinking of green hydrogen from wind and solar and electrolyzers, The costs are not there yet.
Now the waste water treatment plan definitely needs oxygen, and they have water, which an electrolyzer is needed, so there is a nexus, there is a correlation. Is it the best correlation today in 2022? The answer may be no. There are lots of interesting projects being worked out. I mentioned.
The Australian project building built by a G I G very interesting, innovative concept that they’re building, co-locating a hydrogen plan where they will pass the oxygen to the waste water treatment plant, reducing the opex, they’ll use the recycle MBR RO recycle water to electrolyzer, and then they’re also gonna use biogas in a way.
So there is a bit more angle than hydrogen there. But when I look at a bit of the details, it’s not very encouraging, but that should not data deter us to stop not being working towards it. So, sorry if I was very utterly straightforward, but I think don’t deserve . But there is definitely work to be done.
Biomethane is more of a low-hanging fruit when it comes to carbon-negative fuels
Today there are more lower hanging fruits for both the green hydrogen space and the wastewater space. And let me elaborate a little bit more on that, is the green hydrogen space, the cost of electrolysis massively, has to come down. It will come down eventually, like what we saw in the solar space, but also the cost of renewable energy.
Which then feeds the electrolyzer has to be coming down. And at scale. Scale is what I fear. In terms of speed of which with green hydrogen will be built. I think people are changing that. Australia, many other places in the world, hydrogen is gonna be very big. But coming onto our sector, and I call it our sector proudly because in the way water, in the waste water sector, we have a low hanging fruit.
Biogas, what does an investor like? He or she likes something which is proven reliable, readily tappable and needs very little change or no change in infrastructure. And this is a very good point. I will elaborate in a bit. In the water space, you have a low hanging fruit, which is the biogas, the sludge.
and you can make RNG out of it. And this can straight away decarbonize today. And the technologies are more than mature and risk free. The other big advantage, which I think we all are missing, or at least some of the people are missing here, is infrastructure required for hydrogen and RNG.
Hydrogen still requires to build an entire infrastructure
Look at that. When you build a hydrogen plant, what do you do with that? Okay, you gotta store it. It’s a different animal to store that. And then where do you inject it? The same pipelines which carry gas in your home, my home, will not be able to take it. You can do a little bit of a blend, but on the other side, when you have RNG or Biomethane, you can inject it today with minimal disruption to anything.
The same molecule can go into the national gas molecule. So that cost of infrastructure change, if you add then on top of the green hydrogen, because here we should always talk about totality, the net cost with wastewater sludge and co digestion, which I will elaborate. You can make a molecule, which can directly go today into the pipeline and decarbonize.
Today, we only tap into about 8% of Biomethane’s potential
Antoine Walter: You mentioned low hanging fruit. What is the status quo today? How many. The potential. Are we already tapping into how often do we have a digestion on a wastewater treatment plant on a waste collection place and how much of that biogas is then injected into the network and valorized?
Kunal Shah: So I would not have all the real numbers and stats as a feeling.
So Antoine, what I would say is that coming from both water in the, in the waste sector, now as Anaergia, when we look at it, first of all, one thing good here is that we as a human being or a mankind, have now built a lot of wastewater plan. So that’s a thumb we should be proud of. But there is still more than 50% of the wastewater yet to be treated.
About 56% of the World’s Wastewater is treated today
So that’s something which I will not talk about Let’s talk about the waste water treatment plan, which are there. Then when you talk about the waste water treatment plants, There is a certain economy of scale where biogas becomes viable, and the thumb rule goes that if the plant is about six to eight mgd, or I would say 20 to 30 mld million liters a day, then the amount of sludge coming out and setting up the digestion infrastructure.
You can build biogas even with a smaller sludge, but in terms of economy of scale and payback that is the market. If you look at that market, unfortunately you’ll see less than 15%, 15 1 5. And in the developed countries you may have a bit more.
… only 15% of the Wastewater Treatment Plants have a proper anaerobic digestion
And that’s why I would say I would not have the right number. But there are still large plants which are doing aerobic sludge management and just aerobically treating it. And there are many plants which don’t have primary clarifiers and sludge is not being treated. Many plants, there are no digesters and the sludge is being hauled away to a drying facility or just land applied after dewatering.
So I would say the potential is crazy and huge, and that’s what keeps us excited every day at Anaergia we have built so many of them already. We have so many more to be built. So coming back to the question what is the potential? It’ll be several billion dollars. Not just from the perspective of building sludge digestion infrastructure, but, and that if you’re okay to jumping the topic, I would like to talk about the co-digestion space because mm-hmm. again, the beauty with our sector is that we touch so many facets of a city infrastructure or a human being. Infrastructure is that we not only have the potential or the avenue to treat wastewater sludge, which is generated at the wastewater treatment plant, but imagine this wastewater treatment plant becoming the hub for all the organic waste in that city.
So you now talk about co digestion, and that is another billions of dollars to be unlocked.
Anaergia enables to tap into more organic streams to produce carbon-negative fuel
Antoine Walter: So what’s the way to roll that out? Because the traditional approach is to say you collect some greases and you mix those greases with your sludge and i’ts already better than just the sludge because it brings some more organic matter, brings a different mix into your anaerobic digester.
But what else, what are the other streams which you can tap into and how do you do that?
Kunal Shah: That’s a good observation, Antoine. So whenever I talk about co digestion, people say, ah, it’s an old concept. People have been co digesting grease, FOGs, fat oil and grease and some liquid waste. At Anaergia we are aware of this, when we started this this business and we thought that, you know, resource recovery is the new normal and co digestion with simple organic waste is a new normal.
Beyond Fat, Oil and Greases
When we said how do we advance this new normal to the next stage, we started with a vision that can we not co digest any and every bit of organic waste which exist on planet earth? So now imagine let’s let’s go to this place. Let’s take any city in the world, Antoine. And this is a bit of philosophical too.
You will see most of the cities have a water department, which includes wastewater sometimes, sewage, and there is a waste department. Both brothers or sisters are generally sons and daughters of the same father or the ministry. But generally there is a China wall between them. They are working in silos and we realize, or our founder realized, Dr.
Benedek realized that there is so much this two brothers or sisters could do together. Now it could be a political subject. Then he says the only way to make them talk together or one of the ways to make them talk together is using technologies. So we created systematically over a period of time technologies which can extract.
Organics from mixed solid waste. I repeat for our listeners. We have technology proven, patented, reliable, which extracts organics from msw. MSW is the home waste, everything. Mixed iron rods, tree bars, mattresses, food, and we extract food from that waste using a patented orx Anaergia technology. Once you have extracted that organics, you then clean it.
We have another technology there. You polish it and you put it into the existing wastewater, sludge digester.
Rialto: a concrete roll-out example
Antoine Walter: Can we take a concrete example of that? Where do you roll that out?
Kunal Shah: Oh, many places now. I would start with California. And the reason is because of the SB 1383 guidelines for organic diversion.
For all the listeners, California has a very strict mandate and a guideline that by 2025 or 2030, no organic waste should go to the landfill, which means what do people do with the city waste? . So we have set up a very interesting organic extrusion align at an existing transfer station.
So every city or most of the cities have transfer stations where the waste gets collected, compacted, and thrown to either the landfill or sent to the incinerator. We have set up this technology on an existing transfer station, which again means. No disruption, no new land required, no committing issues.
So that shows that and to do more with less. Right? So we got that built and we are extracting organics from that press and we are bringing it to our flagship Realto bio energy facility where we are digesting it and producing RNG out of it. We have also one, the project where we are looking at we are operating right now where there was an existing wastewater treatment plant.
Mixing up waste streams the right way enables to triple the biomethane output within the same footprint
Imagine existing wastewater plant with digesting infrastructure, underutilized with taxpayers money. We said, you know what? You have. These two digesters, you are only utilizing half of their capacity. How about we bring in organic waste, food waste from outside co digest it with sewage sludge in the existing digester?
That’s again, another piece of technology we have, which is Omnivore anaerobic digestion technology where we can. Triple the capacity of an existing sludge digester in the same tank volume.
Antoine Walter: I’ve seen that in the brochure and I was like, Okay, how’s that even possible? Three times in the same, I mean, the bacteria are the same bacteria.
What’s the trick? What’s the magical thing?
Kunal Shah: I would leave it to people to contact us, Antoine name it. But the simple answer is that we have decoupled the HRT and the SRT and we have some unique proprietary set up around the mixing, around thickening and around the whole way we design and operate this plant.
Tripling up biomethane production at scale in many places across the world
So I think if people are interested, we are happy to discuss and we are already implemented these projects across. So there is a proof of concept more than a proof of concept. We have plants as big as 80 mgd, 300 million liters a day, waste water treatment plants, which have used this technology and running since the last years.
So now we bought this organic waste from outside. We’ve used the same digestor infrastructure to make now more gas. More gas for the wastewater utility. Now, it also solves one very important point, which is the NIMBY issue. Not in my backyard. Waste is smelly. Let’s face it. Now you go for building a new waste facility in developed countries, I’m told it can take years.
But imagine a wastewater treatment plant, which is there since 30, 40, 50 years. People have made it the part of their life right now. You process waste in that wastewater complex or a infrastructure. You also solve in a way, NIMBY issues.
Antoine Walter: You mentioned how waste and wastewater are two brothers or sisters, which don’t really speak together and they all belong to one big utility.
And you are a bit touched on it when you said that there’s one element of being cash positive and there’s another element which is the bigger picture, which is how do we behave in terms of carbon emissions? And one of the key topics for all these utilities nowadays is to become carbon neutral or to become carbon negative.
Ideally. You’ve described your technology package as a low hanging fruit so far. Which leads me to that simple question. Can these utilities today with the existing state-of-the-art be carbon neutral or carbon negative?
Carbon Neutral and Carbon Negative become realistic, today, at scale!
Kunal Shah: A short answer would be Y-E-S underlined yes. And there are lots of facets associated with being carbon neutral.
But I will again take one step back Antoine here and I think our chairman touched upon this case study in your podcast this is the Sterling Natural Resource Recovery Plant in California, which is not just going to be energy neutral. I would use the word energy first and then come to carbon, but it’s going so gonna be energy positive, which means it’ll put into the grid more energy than it consumes.
That’s, I think, for our industry already an achievement because energy is one of the biggest carbon source or angle. So I would say that the simple answer is that, yes, our waste water treatment plants can be energy positive. Not just energy neutral . But is it only by treating their own sludge can they be energy positive?
The answer is no. You have to up the game by, as I was explaining, bringing in other feed stocks and other organic waste, and then producing more gas and making more either more RNG or sending more electricity to the grid. Come back to the carbon angle. When we look at the carbon angle, of course you have the nitrous oxide emissions N2O emissions from the clarifies and stuff, and there are some low hanging fruits there.
Optimizing biomethane production has welcome side-effects
You cover them up and stuff like that. Since we are not a subject matter expert on that, so I will live in my discussions there. However, every wastewater treatment plant has carbon emissions through the point of the electricity They. And the sludge they produce, right? In our case, we believe that we’ve tried to solve both because we are managing the sludge, which was liability into an asset by converting it into green gas.
And that green gas is then converted into either green energy, which can then subsidize or reduce their dependence on either brown or black energy. There’s also another angle there is that it is not always only about carbon neutrality in my view, the topic of climate change.
And again, thanks to our founder you will not believe in every management meeting we have. We have a first session on climate change regardless of business topic. Every session in Anaergia, we have a climate change related topic, a discussion and a brainstorming session among the management team members.
And that’s something which I really feel proud of that we really want to walk to talk and we are walking the talk. So when we have those discussions we have this discussion that, you know, look at this whole thing of carbon thing, which started, right, the carbon thing, which started from a perspective of climate change or goals of climate change, or the temperature rise, which is gonna happen.
The wastewater treatment plant turns into a water resource factory which increases energy resilience
But there is another factor. What we have observed, and I can name a few case studies or observations with climate change. There have been more blackouts and burnouts, even in the developed nation with forest fires, with flooding, and with God knows what. You know, there are so many catastrophies that happen, and most of the utility bosses or leaders we have spoken to are shit scared about one word, that’s resilience.
How do I as a public utility enhance my resilience? You know, it’s good to talk about carbon neutrality, decarbonization, very fancy and very nice words, but talk to them. In person. You will hear that behind the limelight of these fancy words, they come back at the bottom that how do I serve my citizens better on time 24 7, And how do I reduce my operation costs?
And last, but not the least, of course, it’s more awareness in the western world now coming here than I have to be carbon negative or carbon neutral. But the resilience point is something which is also addressed by digestion and co digestion. Now imagine if a waste water treatment plant can produce all its electricity.
A hundred percent depending almost nothing on grid electricity. Even if the grid is down with typhoons, with floods and with blackouts because of forest fires, the wastewater plant can still run and better. The wastewater boy can become a bigger brother to some of these city utilities and say, Hey, you know what?
… even becoming a power plant!
Take some more power I’m making more power. If it’s, they’re making power, if they’re making green gas, the gas utility can have gas utility. Again. We’ve also seen in the world of war that as much as we thought of globalization, we all have to face it that it’s moving towards a glocalization or even a localization.
Now, a city or a region or a country, depending entirely on imported natural gas, nobody knows what would happen tomorrow. So imagine if you find a way to create your own gas, green gas, which is what we call LNG, or CNG, or biomethane. You’ve counter that resilience, you’ve made yourself more resilient. And that to me is eureka.
It is what people would make the longevity of that utility, the resilience of that utility, because these utilities are not gonna evaporate tomorrow. They have to be there since until when the human kinds are there, right? So I would say that resilience, energy positive, and by an effect carbon negative or carbon neutral, and a liability, which would have ultimately ended up in a landfill would now no more end up in a landfill and be converted into something meaningful.
When investors talk to us, they say, Holy cow, when we invest in a solar project, we get fascinated that there’s sun and then there is electricity, but you guys are trying to kill so many birds with one stone if that’s not the right statement.
But you’re trying to address so many things with this one piece of solution or technology. You know, you solve so many things and this is more tangible and long term.
Biogas still represents a small fraction of the World’s Gas Consumption
Antoine Walter: there’s a lot to unpack in what you just said. Let me start with that one, which is a question of scale actually, because I fully get your argument of the resilience and how important it is to have self-sustaining utilities. On the bigger scale of how much natural gas we consume today and how much renewable natural gas we could be producing.
What is the ratio between those two? Pockets of gas?
Kunal Shah: A very good observation. Again, Antoine and we come across this question many times, so you will be surprised that the biomethane produced today would be even less than 0.2% of the world’s gas needs. That’s what we’re talking globally. And again, I would like to correct the facts, but International Energy Agency has this printed in a very nice way.
And World Biogas Association has an annual report, which has it, so you can imagine that so little has been done until 2022, which also means that company like ours has so much to do and professional like us have so much to do, right. Number two is we also get these questions that, oh, even if you were to barrel, it’ll be a small drop in the ocean.
But I just would like to repeat the thing I said, there is a role for everything we see it’s becoming admitted for. Absolutely. We’ve already lost a little bit on that time, and I think every bit helps. And this is the low hanging fruit, and I don’t have to wait for 2030 when the new fuels are gonna be competitive.
This is competitive today.
How will the share of Biogas evolve over the next decade?
Antoine Walter: Actually, my question is a bit, you know, there’s two ways to look at it. The first is, if you shoot for the stars, you might be reaching the moon. So that’s the positive way to look at it. And then I’m fully with you, so if you directly say that you could be building so much more.
The way to look at it is, you know, an elephant, you eat it piece by piece, and the next piece might be, okay, if there’s 15% of equipment, maybe the next step might be to go to 20% of equipment and slowly go up to 100%. And same on the local wastewater treatment plants or wastewater plus waste altogether, I mean, the utility level.
they should first aim for neutrality, and then one day they might go positive, but if already they go neutral, I mean, there’s one to four person of every country’s carbon emissions, which come from the water sector. So if already you can bring that to zero, I mean, that is a crazy achievement. We focus on the planes, but the water industry is 3, 4, 5 times the planes.
So that’s a hidden thing. I mean, as long as they speak about the plane they leave us alone with the water industry. So we’re really happy about that. But at some point, they will come to us and countries like the UK have set some ambitious target saying like, by 2030, we’re carbon neutral. And by 2050, we don’t emit any carbon anymore in the water industry.
I do get that on the agenda of utilities today, resilience is on top, lowering the opex is on top, but. How often does the carbon discussion come into your conversations with them? Is it something which you’ve seen moving over the past years? Is it something which you see booming? I mean, there’s a difference between moving and booming, or is it really something which is, yeah, still a backstory.
Forward-looking utilities have a clear roadmap towards decarbonization
Kunal Shah: There’s some good points, which you mentioned in the question just now. One was energy positive or carbon negative is like the north star, right? A hundred percent agree with you that utilities have to first go with the lowest hanging fruit, which is making use of all the waste products they have to convert it into extract, energy value out of that. A hundred percent agreed.
And we started like that as a company by first telling people that hey, treat your sludge in a more efficient way, in a more productive way, rather than the older technologies. And doing more with less, which means can the same infrastructure be upcycled?
Can the same infrastructure be used to solve the existing sludge problem and then move towards co digestion and all that kind of thing. So that was one part of the thing. I agree with you.
PUB: a World-Class example
The second part is, which you mentioned about whether we observe, and I think it’ll be not appropriate and I think I will feel bad if I don’t mention this utility in my podcast today, is where we are sitting PUB, Public Utilities Board of Singapore and all the points which I just mentioned has some of the other element associated with PUB as well, and I will explain to you slowly about what they’re trying to do.
But in general we are finding utilities in the developed world. I would say probably Australia New Zealand, Singapore is the top. And I’ll explain you why. Some European utilities, some American utilities which have commitments to net zero.
We have seen utilities where , unbelievable. There is a part already how they want to decarbonize.
They have mapped their carbon footprint already like already, and they know by 2023, 2025, 2027, 2030, what are they gonna achieve?
Why Anaergia won’t work with fluffy decarbonization targets
we are only taking those utilities seriously, honestly, because 2040 – 2050 commitment means nothing because the utility boss would have had five CEO changes until then.
Take an example of PUB, if you read the chief sustainability report, which came out of PUB, and again, I request everybody on the podcast this is the world class utility.
Even Dr. Benedek was so impressed to see that they have mapped their carbon. They have come out by which year how much they are going to abate and how they are going to abate. So they have figured out some low hanging fruits, like solar panels on the reservoirs. Again the constraints to become carbon neutral for PUB is one of the biggest in the world.
Because of no space guys, there’s no land in Singapore! In that constraint, they can’t grow solar panels, they cannot have so much wind. So the avenues to decarbonize are very little. So PUB went utilizing every piece of the reservoir to make solar. But they also then took the biggest, I would not say bet, but the biggest professional decision.
TUAS in Singapore, the integrated plant of the Future?
They, and we are proud to be associated. They are building the world’s largest integrated. Waste and waste water complex. It’s called the Integrated Waste Management Facility in TUAS. This is going to be one of the first plants in the world where it’s actually one of the largest MBRs in the world. All the sludge, 400 tons of food waste, which we Anaergia, has been awarded a contract to pre-treat it and the clean food waste and waste water sludge is going to be co digested, co-located with an incineration plant, which is going to burn the non recyclables.
All bit of gas is gonna be used for the consumption in the plant, but also in the incinerator boiler to make more power for grid injection. So imagine how much nexus, we’ve talked about, heat, power, energy waste, and they have done it, which will help it, but they’re not stopping here. They’re looking at more of these.
But what I’m talking here is scale. That scale to decarbonize. Hats off. I mean, this is what we want many utilities to do, right? Scale. And then they also have invested millions of dollars right now in R&D grants helping companies across the world. They are not agnostic. They said, Anybody, any soul in the world, please come forward and look at our decarbonization plan and help us.
How PUB assembled a dream team to work on the project
They’re also coming out with generous grants and saying, I think they’ve done a very interesting grant with LA based company for recovering minerals from the brines, which goes back. They are doing massive research on reducing energy consumption in the desalination space, the wastewater reuse space.
So they are going behind nuts and bolts of common decarbonization. Now, that’s the leadership which PUB has shown and there are other utilities also showing. I think we need to do it that way.
Sorry, long answer, but I’m just saying that great answer. . There are utilities which are coming. Honestly, we are happily working with many of them, helping them not just to make seller product and make some money.
I think we as Anaergia are also approaching that. It’s a bigger problem which everybody has to solve together. It’s a partnership. Sometime the utility may not have the necessary financing. We say, Hey, you know what? We are a private sector company. We can finance this facility and you can have a joint benefit out of it.
Private-Public Partnerships to skyrocket decarbonization
That is something which we are also trying to accelerate, actually, that’s the right word. One is maximizing resource recovery, which I talked about. The second is acceleration. Yes, we will decarbonize, but guys we got to speed up. We gotta buck up. Look at how the EV industry has evolved. Right like that.
So we have to accelerate decarbonization in the wastewater space. We have to push it. And the third thing is the PPP and the BOT angle, which is where the private sector financing comes, is so much money available to do this. But we are the right projects. There are no right projects because people are thinking in the silos, I want to sell them my technology.
I want to only build the plant, I wanna just operate the plant. But if you break these silos and you become a developer, which we are also in a way, money is chasing, Hey, can you show us project where we can invest money?
Providing ESG investment money with perfect projects to support
Antoine Walter: Let’s jump into that one. One of your good friends, Reinhard Hübner, on that microphone, had that sentence, which is staying with me since we discussed, which is too much stupid Money is chasing too much Stupid projects.
And he also underlined, how there’s money available is just that they’re not the right project to, to put next to it. So it’s, it fully goes into the same direction than what you’re just explaining. Isn’t it surprising for a company like Anaergia, which just went public, which is still. quite young, which is on a short life cycle to be going that much intentionally into the risk zone of investing in your own project, of doing BOT, of doing PPP.
I thought that would be something for, you know, the established good old French companies in that game for two centuries?
Kunal Shah: First of all, Antoine, I agree with what our friend said on the podcast, but I would say there is no stupid money. There is money, right? So every money has to be an interesting money.
But jokes apart, I think maybe I will answer this question a bit personally as well, and as well as what I’ve observed and what we at Anaergia thought. When I was looking at this waste space and wanted to make a career and Anaergia came on the forefront the biggest single reason which attracted me, of course, the founder is there, but I think the delivery models now let’s me explain that.
Developing a PPP is a way to show your confidence with skin in the game
Most of the tech companies would like to offer their tech and leave it. And again, learn the hard way of marketing with utilities. And when you go to a utility boss and say, I have the best pump in the world, but the utility boss say, Yeah, but that’s just the best pump. And what about the pipe in the front and the other system at the back?
Right? The whole system. And then the technology guy says, Oh, but I don’t do that. And then, okay will you supply the technology? Yes. Will you operate it for five years? We don’t do that. So how do you convince what I feel proud Antoine about us And yes. It takes a lot of gut passion, money and vision to do what Anaergia has been able to do in short span.
But also the thought reminding the story. When Dr. Andrew Benedek launched Anaergia , his idea was to really focus on the methane molecule, which comes out of organic waste. But since coming from many decades of wastewater experience, he thought that how we could also unlock that in the wastewater space.
But this time he said that in the past company, he sold kits. This time he said that the industry, which we are dealing with now, water plus waste, which to the audience here is an amazing industry. I’m figuring out every day is that not that fast as water as well, right? But it has its own beautiful features that we figured out that if we have to push things, we just can’t be living in the glory that we have the best technology in the world.
Anaergia has been powering decarbonization from Day 1 by developing its own PPP projects
We have to demonstrate a, our solutions at scale. And if people don’t bet on it, we bet on it. How fair it is. If you don’t bet on your own technology, why should a utility guy bet on your own technology. So Dr. Benedek decided that in order to be masters of our own destiny, in order to, again, the word accelerate deployment at scale is the third word, and today is the fourth word.
He said, We have to change the business model. And from day one, the company is built that we are proud to be an end to end technology solutions provider. What does that mean? Is sludge and waste comes on the factory of our plant. Beautiful green gas molecule, green energy, and fertil fertilizer goes outside our plant.
Sometimes we do sell technologies where utilities don’t need financing, but we have figured out that under one umbrella, we do end to end integration, complete operations and maintenance. We operate two dozen facilities across the World. Finance. But on top of all this, which you just mentioned, that there are some big boys who does that, and that needs not just deep pocket, but really a lot of gut is developing projects.
It involves a high level of (calculated) risk for a young company
We are talking about all risk capital. I repeat a hundred percent risk capital when you just go to a new place and say, That’s the piece of land we’ve identified to a wastewater sludge project or a food waste project. And then you get into this whole thing of 20 permits plus 30 other environmental approvals, and you don’t know whether you will get those approvals and could take years.
But I think we have done that. We have proven that at scale, at our Rialto bio Energy facility and many more where we go in the beginning when financeers don’t wanna go, for sure. Many other local companies and contractors say, That’s not our technology, so why should we do it? And the utilities are a bit not so comfortable in doing this.
We said, Okay, you know what? We take a step back, but we are becoming the developer. So the right word is developing projects. We’re taking risk capital, we are masterminding. And when you take risk capital, you actually optimize the solution. You actually try to do more with less. You minimize everything what is required because you have to make the IRR at the end of the day because that’s risk capital.
Anaergia’s successful IPO market-validated the company’s approach to decarbonize the World
And that’s what people appreciated when we went public. And even today that there is so much, Financial commitment of the founder as well as the company which is invested. And that gives them more comfort that if the founder and the company is invested I think we are gonna give them more to do more. So we are actually being chased by money today to take more than we need because they’ve seen A, are deployment skillset.
B, we have put the skin in the game. So we are walking the talk and then the financial says, Yeah, you’re walking the talk. My checkbox all clicked, it’s risk free. Let’s go take more money!
Money is not the bottleneck. Incredible?
Antoine Walter: So if you’re chased by money, what’s the bottleneck for your development today?
Kunal Shah: Again, a very good question. So I think the answer is simple, but I’ll give it in bullet points.
In some places, regulations even today there are many countries in the world which do not have regulations. And incentives for organic waste management for biomethane or RNG incentives. They’re still comparing it with fossil, but today those same people are thinking differently because the fossil gas price has increased.
But, you know, that’s not sustainable in the business model. So Regulation B, clearly economics many countries have the benefit of moving towards the circular economy and carbon negative approach. So there are funds available, but there are still, we are talking about 60, 70% of the world or 80% of the world’s population, which does not have that.
So economical drivers to really push it. And number three is Social, political covid 19 and stuff like that. But I think this is two years, but I shouldn’t be hard on ourselves because look, just in 10 years Antoine, you have interviewed a lot of people. The gestation period to make some eureka product unicorn here takes 15, 20 years.
Anaergia currently holds 13 biomethane / carbon-negative fuel assets
What one more or more? And what we’ve tried to do is, and again, I’m not being proud and being complacent, but we have more to do. But in 12 years, 13 years, we proudly own 13 assets, millions of dollars of asset value under our books, and we have done it. , Are we happy with our speed? Always not happy, but can we do more?
Yes, we can do more, but what we’ve decided is that there are 24 hours in a day on. So what we said is that in 24 hours, and with the limited resource we have, let’s focus on customers, countries, cities and industries and fortune finder companies who are really serious. Just if we focus on that antwan, we need 24 hours a day actually.
And if we do that, we are decarbonizing anyway because the CO2 molecule, which emits from Singapore, doesn’t discriminate the skies of San Francisco. The CO2 molecule goes across right. But here, I must say, another very proud thing about Anaergia is that you must have observed that this carbon story and decarbonization story is led mostly by the western nations, or not Western nation developed countries, even Japan and Korea is also doing that.
Singapore will be a hub for further growth in ASEAN
Singapore is also doing that. But I think the fact that we are in Singapore, the fact that we believe that 1.4 billion of India, 1.5 plus of China, and 680 million of ASEAN, that’s a 40-50% plus of the world’s population. So imagine the carbon emission from here. Now we want to truly be a global company.
We could have been happy in California, Canada, and Europe, but Dr. Benedek said really have to create an impact. That is, we have to be in Africa too. We have to be in Asia too. And I think the investments we. Many years ago are paying off. We are the single largest biogas company from a western world to have a full fledged office in Singapore.
We have design experience, a design engineering, project management, operation, maintenance, financing, admin, marketing from this office. So,
Antoine Walter: …and the ship growth officer of the company. So somehow assigned that you believe that is gonna be your development place.
Kunal Shah: Thank you! I mean, that’s another thing which one more thing in our company, and again, reaching out to potential talent in this industry, is that it’s an amazing world to work with.
We have no age limits. If you have the right attitude and the right passion for climate change, this is the gate you wanna enter into. And then this is some of the facets. You know, our COO is below 40 I’m below 40. It’s not just that age factor, but I would say that, and Covid taught us all, doesn’t matter where you are.
Because it’s so much intertwine. Our company is so working like a family that I would know exactly what is going on in US and Italy, for example, as they would know in Singapore. So that was another facet. But yes, you’re right. Somewhere in our mind we believe Asia is the growth engine. We have done good work.
We are not happy. I’m personally not happy with the speed. I shouldn’t believe there are a lot of developing countries, low income countries. We are now figuring out solutions how I convert my developed world solution into a developing world solution. So solution remains the same. Can I make it more competitive?
Can I offer it in a different way? So we are doing all the kind of engineering right now. So Asia definitely is a growth engine.
Anaergia’s business model and how it adapts to local specificities
Antoine Walter: So when you say different way, it’s different technical way. The business model remains the same. You’re developing and you are doing an end to end solution. And what are you selling at the end?
Is it biogas? Is it…
Kunal Shah: In Asia, there is a small difference that we would prefer to do co-development. I must be honest on this podcast that I wouldn’t go to Papa New Guinea or Vietnam and say, I take all the risk, Right? And it’s foolish to do that as well because there are so many strong, capable local conglomerates there who may not have the technical knowledge, but have the infrastructure knowledge the construction expertise and the financing expertise.
So in these countries, we are co-developing take part of the risk. They take part of the risk. Maybe sometimes they take majority risk. We also put some skin in the game, right? Because trust is the word in Asia Antoine. In order to pull trust, you can’t just say, have the best iPhone in the world, buy it.
No. You gotta put some skin in the game and say, Yes, we are committed that this technology will work and we operate it together. And the products here we are looking at is a mix. Renewable energy is still very hot topic in Asia because there’s not much electricity. Be aware of that. , we’ve not electrified a hundred percent of Asia.
Renewable carbon-negative fuels like biomethane are a promising alternative when electricity is in limited availability
So there is green energy incentives in some places like Japan, Vietnam, India Indonesia. And then more and more what we are seeing is after the war that the demand for biomethane molecule from some very professional and ambitious, and I would say climate positive companies like PepsiCos of the world you know, like the fortune finded companies, they are all saying that no matter where my factories are, I need green gas.
I need to take care of my waste. And you know, these are the kind of things also we are looking at. So,
Antoine Walter: And what about your waste? Because on that same microphone I was discussing with Semra Bakkaloglu, and she’s done some studies on the emissions of the biogas industry, and she proved it to be twice bigger than formally estimated.
And what she showed is that it wasn’t so much about carbon emissions, it was a bit more about methane emission. And methane has a 28 times higher climate impact than carbon. So in terms of the number of carbon molecules, it’s not that much in terms of impact is pretty high. And what she was proving is that the portion of that sector, which is the most sensitive and which is the biggest emitter, is basically the waste of that sector.
So the sludge digestate or the waste digestates, what are you doing with that portion of, the material you’re dealing with?
The biomethane industry is still in the early stages of its S-curve
Kunal Shah: I don’t have full knowledge about the fact that the industry itself, the processing itself generates two times. Maybe we should have a discussion on that. But what we have observed is that by bringing in professional proven technologies Kind of plucked all the leakages if it could have happened through the digesters.
And there are a lot of beautiful sensors and all in our plant are top-rated HSE compliant plants. Now look at the other side of things. Imagine if that utility was just throwing away that sludge, what was that methane emission? So we are saying that okay, we start with minus five. Oh,
Antoine Walter: that’s the question I raised to her.
So, yeah. But so
… which comes with challenges to solve
Kunal Shah: at least I would say Antoine as you said earlier, right, there is the lowing fruit and what the utilities should do today, which is a no brainer, is that at least treat that thing. Then we are talking about the digestate. Now let’s talk about the digestate. So that’s another thing which at Anaergia we don’t look at sludge only as digestion.
We are a one stop solutions end to end, we also call it high end top rated sludge management partner. We wanna be a sludge management partner and not just doing anaerobic digestion and making biogas. So, which means if there is in the whole plant sludge being produced right from extracting energy out of it, nutrients out of it, and destroying PFAS out of it, we under one company can do it all
Antoine Walter: proudly.
How do you destroy PFAS in sludge?
The interconnection of sludge management and PFAS removal
Kunal Shah: PFAS has its own interesting in a long abbreviation word, but there is a PFAS chemicals, they call it emerging contaminants, which has been found in many places in the sludge. So, what we say is that first thing first, and first take out the energy.
No brainer guys. Let’s put digesters, efficient digesters, either in existing wastewater plants using our technology or new build digesters. So you’ve taken out the energy value outta the ledge, so you’ve got some income. Second is you’ve got digestate now, so you efficiently dewater it. We can do that.
You, you get a digestate. In some places, if the wastewater is not mixed with industry wastewater, you can land apply that sludge. It’s happening, but more and more it’s becoming a taboo. So what we figured out is that first problems is there, volume reduction. So much sludge cannot be handled. And the second is, PFAS. But PFAS not from the perspective of destroying the emerging contaminants.
But again, same thing. Can we recover something out of it? So we’ve recovered energy out of it. That’s why I use the word energy as all about maximizing resource recovery, recovered the energy value, recovered the nutrients value. We have ammonia stripping technologies and stuff, but last bit is the volume.
Producing a PFAS-free biochar out of sludge
We reduce it, and we have technologies which can make biochar out of sludge, destroying PFAS, and now created a product which is biochar, which again, by the way has carbon sequestration angle. Once you put biochar into the soil, and again, we can have a separate podcast on that, but once you put the biochar into the soil, it retains the moisture.
Number one, it has absorbed the carbon and it is a longevity, which it offers. So it’s in New Zealand, we have seen projects where people are financing just biochar application , on grasses because it sequesters carbon. So energy maximization, volume reduction, PFAS destruction, and biochar production end to end sludge management partner.
Anaergia’s road to impact over the next five years
Antoine Walter: I think that makes for a good roundup for the deep dive. I just have one question left, which is a bit my crystal ball question, which is how would you define success in, let’s say five years?
Kunal Shah: Ah, this We have some thought that as a company we have our, honestly, financial goals. In terms of market cap.
We are ultimately shareholder owned, right? So we have to give back to our shareholders who trusted and invested into this journey. So we have our. Five year goal on where we want to be in terms of shareholder value, market cap, revenue, bottom line. Because as our chairman says, if you do not have your own company sustainable, how will you make a world sustainable?
Becoming the “Tesla of Renewable Natural Gases”
You have to first get your own bread and butter profitably to be able to finance the world profitably. So that’s one part of our success measuring. But I think if I were to tell you that how we would define what we are as Tesla, Is for EV, we want Anaergia for renewable natural gas. So when people talk about EV they talk about Tesla. Generally. When people will talk about RNG, the first name, which will come in their mind would be Anaergia.
And how we will do that is by building a dream, is to build that green molecule from any available organic waste, including wastewater sludge in the world at scale. I literally mean at scale. So imagine we being right now we are already in the top three renewable natural gas producers in the world already.
Of course go to the top. I would even call it, we are the largest actually from waste. But the dream and the wishes that, as I told you that analogy, but if you were to think we would be decarbonizing. Cities, we would be decarbonizing, transportation sector, we would be decarbonizing, maritime sector, we would be decarbonizing aviation sector, and we would be decarbonizing industries.
That’s the wish and the dream personally too.
Antoine Walter: Kunal, there are so many open doors in that discussion, which I’m bit frustrated because I cannot jump into each and every of them because I have to be conscious of your time as well. So I propose you for today to switch to the rapid-fire questions, but I also noted that you yourself, said that it would be matter for a sequel.
So I’m taking a note there, and I will chase you down.
Get Season 1's Summary!
Rapid fire questions:
Antoine Walter: In the rapid fire questions, I try to keep the questions short and your duty is to keep the answer short and you’ll notice that the one side tracking is always me. My first question is, what is the most exciting project you’ve been working on and why?
Kunal Shah: The most exciting project have been several because everything we do is touching the ESG space. ESG space, every project we do. So that’s fortunate and perks of working in a job like this. But I think personally answering the RapidFire question, the most exciting project I’m working on is the integrated Waste Management facility at Tuas in Singapore.
As I mentioned, this is where. The utility. The government technology providers like us contractors and consultants have really pushed the needle on leveraging synergies between the wastewater and the waste space, producing more energy than consumed and utilizing every bit of resource possible. I’m personally very excited, and if as mankind we could build five of these in the next three years, we would’ve done justice to the work, which has been done when will be commissioned.
It’ll be commissioned in 2026. So obviously in the next time, whenever the tap plant is ready, I wish, and everybody can do, but as Singapore is very transparent the, the details of this plant are already on the website of NIA and PUB.
Antoine Walter: So if someone wants to copy and paste what they’ve done and the approach, which is really the idea to steal the good ideas, everything is like built in public.
Kunal Shah: available.
Everything actually. And again reach out to me and we will be happy to connect with the right agencies here if anybody would like to learn about this. And how could it be implemented, basically.
Antoine Walter: Can you name me one thing that you’ve learned the
Kunal Shah: hard way? ,
again, a tough one, but traffic, fire.
So I’ll keep it short. As I was mentioning in the beginning to gain trust and building relationship as I said, started very young, fortunately, started very young in this industry, and getting trust and getting that seriousness was a tough one. And I think the hard way I’ve done is to be persistent.
That’s what my former gurus told me. And the current guru be persistent. Things don’t happen in our business overnight, so no deal is signed overnight, but every day I wake up thinking that I’m gonna sign a contract. As a business development person, you will also realize that. And I think perseverance.
Patience. And it takes a village to gain trust and there’s no right formula and every formula is tailormade for the person you’re building a trust with.
Antoine Walter: It’s fascinating because I could have somehow made the same answer. It’s similar experiences, so I can I really, There you go. Yeah. Recognize what you’re saying.
Is there something you’re doing today in your job that you will not be doing in 10 years?
Kunal Shah: I mean, I would say that the, I would not get into details of how we work as day to day employees and stuff, but I just take it a different twist to this today. Although we said that money is chasing us, but still there is a ESG money if you want, in our industry, if you talk about any good startup in our space if you talk about people who want to build this plant, they would still tell you that how tough it is to get VC, PE and project financing if you don’t have the right pieces of the puzzle Sold.
There is a different way of how this could be managed in 10 years time. I think the tables would’ve turned in 10 years time.
Antoine Walter: I wish you’re right, . And if we get to watch those 10 years, what is the trend to watch out for in the water
Kunal Shah: sector?
A few. I would say that. Consolidation of water technology companies or consolidation of water system integrators is a big thing.
Some of our friends already doing it. One was on your podcast. There are some other companies who are doing it. But just imagine Latin America has ex countries. Each country has a system integrator focusing on a particular sector. Imagine if somebody thinks of a Latin America waste water or a waste consolidator immediately could become a billion dollar company.
And then once you have the scale, you can bring in efficiency, you can bring in financial strain. So I think consolidation, which I am seeing in the waste sector, is not so much happening in the water sector, obviously, also because the way we are regulated and stuff. But in terms of technology companies, in terms of system integrators, there is a consolidation which I see as a trend happening.
The second trend I personally believe is the VC and the PE, rather than just taking it a commercial approach. There will be a sense of blended VC and blended private equity coming in. Blended finance is the word which you see in project financing, but I think VCs with family offices would look at blended approach, where the valuation expectations as well as the premium expectations would’ve to down.
And there are many other things, but I will limit these two
Antoine Walter: actually, the consolidation, you touched on the regulation. I guess it’s the biggest hurdle. If you look at what’s happening right now with Veolia and SUEZ, which are still not merged because of regulation, I would’ve a hard time thinking that all this South America country to keep your example, would allow all of these companies to come together because that would create an antitrust issue.
Kunal Shah: You you get that very question. But you know, there was a certain level of complexity thanks to always the French culture also. But maybe there is a complexity in the French deal because they were also dealing with a lot of utilities which are owned by a particular cities, and that would’ve created competition.
When I meant about consolidation of technologies is imagine what Dupont did. They bought a UF company. They bought a RO company, they bought Desalitech and they created a consolidation membrane platform. Imagine in Latin America, not the public sector utilities, but imagine there are $20 million company in Peru, $30 million Columbian company doing industrial water EPCs system integration.
If they combine hands, the government has no problem. Actually, there was anti, as I understand from the deal, and I’m not an expert on this, is that what I understood from the SUEZ and Veolia deal was that there were a lot of these concessions which have created monopoly. So of course those are the devils are always in the detail, but I think consolidation of assets, consolidation of tech companies and consolidation of system integrators could be a trend going forward to leverage economy of scale, leverage more financing and bring in more efficiencies.
Antoine Walter: If you were a word political leader, what would be your first action to influence the fate of the World’s water challenges?
Kunal Shah: That’s a tough one because, you know, water is such a local subject. That of course if the question was that if I was a water minister of a particular country, what would I do?
But let’s take it a step back. I would say that if I was a World Water ambassador. Mm, Which there is a small corner in my heart, says that I would want to go for it one day. I think what I would do is all the multilateral money, which is being spent ADB, Chica World Bank, IADB, I don’t know how much is being spent on awareness.
Awareness, right from the child is one year old awareness about the real hard shifts which people are facing in countries. And thanks to my background, you know, I grew up in a state called Rajastan, in India where even though you are rich or poor, you don’t get 24/7 pipe water. Take it.
You get tanked water! You get two days in a week water. You grow up there. Even if you’re rich, you cannot get it because there’s no water. So now imagine, I’m sure you’ve done your field trips in Indonesia. Look at the PT Brown color water. I am not even talking about Africa. Antoine how many people who are even listening to a podcast are aware of that harsh reality, not just a documentary.
So I think I also take an inspiration from Singapore. The problem of Prime Minister Lee Kwan Yuh said that first people have to be aware in order to put the value to the water. Why people think water falls from the sky is because they just think it that way. So that is one thing I would do. I would create a massive awareness campaign just like what COP 26 has done.
Imagine the awareness campaign. Do we have like that in our water industry? We don’t, unfortunately, thanks to GWI, which brings in people. Now we will have the UN Water Conference. Is there something like that, which is saying that, hey, climate is an emergency, so water is an emergency because it’s a part of a climate.
And then how do we create that awareness, right, from not just children in the school know, at homes, at colleges, industries, and then have mechanisms carbon credit. People talk about, Why don’t people talk about water credits? When will they be water reuse certificates, which are traded from Latin America to Asia or Asia to America?
They should be, If Fortune Finded companies are thinking about plastic from going to the ocean, they’re thinking about greening their operations. There are many companies which are being water positive, as they say, like PepsiCo. There are many of these industries which might be water scarce area, which may not be able to get the water, but if they make a desalination plant, the cost of product may go up.
But imagine if that industry is formed in that area. So much livelihood. Employment will be given, but they need to then subsidize the water. Somebody in Asia who has more water on the Mekong river should be able to subsidize that. So I think that’s an idea. If somebody from the podcast listens to me Antoine, maybe we can work on this together.
Antoine Walter: You open so many new doors here, but I really have to be cautious here over time. Yeah. So I cannot follow all the, all of those to the people. Listening to that, I had a very in depth conversation with Mina Guli on that microphone where we discussed how there’s no zero carbon equivalent in water and how she is working to raise that awareness towards that conference you were mentioning in New York in 2023.
But for now, my last question, would you have someone to recommend me that I should definitely invite as soon as possible on that microphone?
Kunal Shah: A few. Actually, if you don’t mind. I would say that you may want to look at. Mr. Rajiv Mittal, the CEO and owner of VA Tech Wabag, to explain the story that how, from a developing world, of course and Asia created a powerhouse in the world scene.
Second is, I think a dear friend also is Anurag Bajpayee. He’s a CEO of Gradiant Corporation. The reason is how. Our youth has created almost a unicorn. And the third one will be Vetri Dhagumudi he’s the global director for water for Nike. Why him? Because he was previously at Kimberly Clark and he has looked at water positivity in fortune, Finded companies for water sector.
So he would be able to tell to your or our podcast listeners how some of these trends are folding up and how at Nike, they’re considering water as a very scarce commodity.
Antoine Walter: Kunal, it was awesome talking to you today. If people want to follow up with you, where can they contact you the best?
Kunal Shah: So I think I’m on LinkedIn but I have my email id, which I can share with you, and our website is very much agile, so they can reach out to that.
And it’s a small. They can reach out to you if they want, and then you can connect us.
Antoine Walter: Awesome. So as always, the links will be in the description and thanks a lot for having me at your office, and I hope there will be a sequel. So many open doors, we cannot just afford to not explore
Kunal Shah: them.
Absolutely. Thank you for coming. Thank you for your time. And if you’re okay, if I were to summarize this podcast because it’s been a nice reflection on a lot of points, which you raise, is that I would say to the young professionals that this is an amazing industry to do a live MBA to people around the world which want to deploy money, have technologies, have EPC skills, and our consultants.
It’s time now to come together and partner to create decarbonization projects. I repeat at mega scale today and not just talk about it in conferences. Number three, we at Anaergia are maximizing resource recovery, accelerating decarbonization. At scale today, I repeat some of these words because this is something which, if somebody’s listening to us and somebody has an idea, please come.
We would like to do more of this in many countries, so let’s work together. Thank you.
Antoine Walter: Awesome. Thanks!