SUSTAINABLE GREEN FUEL ENTERPRISE
Phnom Penh| Cambodia
SGFE (Sustainable Green Fuel Enterprise) was born as a project of two organizations: Geres and PSE – says Carlo Figa Talamanca, current manager. Geres works for the environment, particularly with cooking stoves. Practically 3,5 billion people in the world still cook with wood or charcoal, not with gas or other modern things. It is a very big environmental problem because of cutting forests, but what people don’t realize is that 4 million people in the world die every year from indoor pollution caused by cooking with wood and charcoal. That’s more than all the deaths for malaria and HIV together. And it’s very selective, it kills mainly women and children that are with their mothers while they prepare the meal. One of the ideas to change it is clean fuel. We make charcoal from coconut shells, so from waste as well as from recycling charcoal dust. Our charcoal produces much less smog and prevents cutting trees.
Environmental impact, although crucial, is not the only one SFGE offers. Collaborating with PSE, a huge organization providing education to the poorest kids in Cambodia, they hire the parents of those kids, making it more probable for them to finish school. Kids are the hope of Cambodia, those who can change its future. And there is a lot to be done, also about awareness.
We decided to do customer research to discover if Cambodians understand our idea. We asked them why they think our charcoal is good for the environment and their answer is because it doesn’t make smog. They consider it as the only thing, they have no idea about traditional charcoal being the cause of deforestation. They buy our charcoal because of long-time burning and lack of smog and sparks. They buy not because of health or environment, but because it’s good value for the money. If we increased our price most of them probably would change sellers. So we are trying to build awareness, working directly with customers. For example, we organized open days at the factory; we invited all our 100 customers, about 60 showed up. We explained to them about deforestation and working conditions. But everything has a cost, if we want to raise awareness we need a bigger budget. It’s not easy.
Charcoal is the business of the poor. Customers are poor. SGFE may survive just selling charcoal but they wouldn’t manage to grow. That’s why they have started to develop the idea of using carbon credits.
Let me tell you more about that. Surely you heard about the Kyoto protocol for CO2 emission reduction. It’s a sort of mechanism to reduce greenhouse gas emissions. One of the ways to do that is to support a project which reduces CO2 emission, like ours. We had our CO2 emission reduction certified: one ton of our charcoal, by avoiding deforestation, can save 16 tons of CO2. In the last 5 years we reduced CO2 emissions by 25.000 tons. It’s not only saving wildlife and natural forests in Cambodia, but it’s saving people in Poland or wherever by reducing CO2 emission. Global warming is global.
How buying carbon credits looks in practice? If you for example travel somewhere you are taking airplanes which produce CO2 emission. You can’t avoid this. What you can do is to buy carbon credits from a project like ours which reduces gas emissions. By buying these carbon credits you are supporting us in doing our business and you can compensate for your CO2 footprint. So if you have one ton or two tons after one year travelling around, you can buy with 15 euro your carbon credits. This is what we are trying to do, we have a trader, our carbon credits are certified, you can measure how many you need, then you do a transaction, you receive a code, everything is certificated. And by buying our carbon credits you not only save the forest and reduce CO2 emission, you also provide jobs to the poorest Cambodian people and allow their children to go to school.
Few years ago Carlo wouldn’t believe he would be involved in such a sort of business. He was travelling around the world, after quitting his job. One day he found himself in Cambodia, liked the country, and decided to stay for longer. Firstly he was teaching English, then doing consultant jobs for NGOs, evaluating their projects. One of them was SGFE, which at that time was not sustainable, just about to be closed. Carlo decided to take it over.
I don’t really feel like a social entrepreneur, I’m a normal entrepreneur: I try to minimize costs, increase income and maximize profit, which at the beginning means minimize loss. But I do it with the conditions I would apply to any kind of business: with care for the environment and people. And this gives me the motivation, it gives meaning to what I do. I’m a person who gets bored easily if I don’t do something which I find exciting, or meaningful. I have to do what I like and I like to do something for the environment. I like to see children of my workers, who come from the poorest Cambodian families, going to school because I know it really changes something. I like showing people that business doesn’t have to be all about money. Of course it’s important to have money and be able to support yourself and your family, but it’s not the only thing. I‘m happy to share my values with customers, workers, people around me. And if I have to say something to them, it would be: be brave. Be brave to start to do things which other people may not do. Making steps to change your life is much easier than people think. Braveness is needed in the first step, in making decisions, but then it’s not so difficult. Do it and don’t be scared because it’s much easier than you think.
In 2018, Sustainable Green Fuel Enterprise(SGFE) changed its name to Khmer Green Charcoal (KGC). In addition, the KGC organizational structure has now a mother company in Singapore called OTAGO (www.otago-global.com), which aims to replicate KGC’s business model and success in other developing countries outside Cambodia.
KGC plans to continue expanding in Cambodia raising investment for a new and bigger char-briquettes factory in Phnom Penh, nevertheless, since in the last 10 years of operations KGC’s management has developed relevant know-how and technical skills, they also look forward to providing technical assistance to other char-briquettes factories around their world to set-up and scale their business. In terms of business development, KGC has worked on entering new markets and developing new products. For example, KGC now sells its eco-friendly char-briquettes also in rural Cambodia, addressing poultry farmers. The farmers use KGC's char-briquettes for chick brooding (keeping the chicks warm during their first 3 weeks of life), being able to reduce the chicks mortality by about 96% and thus increasing the farmer's income and livelihood.
Furthermore, KGC is developing a completely new business line consisting in the production of sustainable eco-friendly charcoal from wood residues deriving from tree plantation and sustainably managed community forests. This new project also provides sustainable livelihood to the indigenous communities living in and managing the forests, while at the same time preventing illegal logging and deforestation.
Traditional charcoal remains one of the main cooking fuels in many developing markets and has a severe impact on the environment, in terms of forest degradation and deforestation (affecting climate change and biodiversity), as well as a dramatic social impact, causing respiratory diseases and deaths, primarily women and children, due to indoor air pollution. In Cambodia KGC has saved so far a forest area equivalent to about 500 football fields, leading to a reduction of over 30,000 tons of CO2 emissions, and is serving thousands of Cambodians households and small food businesses with a cleaner and healthier cooking fuel.
More about Sustainable Green Fuel Enterprise: www.sgfe-cambodia.com