A small business owner wanted to make his business net zero in terms of carbon emissions — both to be responsible and to save money.
Megan McCarthy, (pictured right) co-founder and CEO of Halifax-based ROCarbon Labs, sat with the owner, walking him through the analysis she had done of his company’s carbon footprint. At the end of the meeting, the business owner pounded his fist on the boardroom table, demanding, “Just tell me how to make a net-zero build!”
McCarthy had heard similar stories before. “I told a CEO who had 500 buildings that it’s not your windows, it’s your laundry machines — like the engineers thought,” she said. “That’s 65 per cent of your peak usage right there.”
“The engineers have been telling me about windows for months,” he said. “What was I supposed to do about this? These people didn’t have the time. We needed to come up with a turnkey solution.”
Such ideas led to the formation of a new company that would have a three-pronged approach aimed at giving smaller businesses a practical, turnkey solution and access to a growing market for carbon offsets. The net result — an affordable solution with a rapid payback. McCarthy’s goal is to get that time, from first effort to payback, down to no longer than one year.
It was an ambitious goal for a bootstrapped startup, but ROCarbon is well on its way to achieving it, thanks in no small part to AI and the cloud.
The Opportunity is Real
There is rapidly growing demand for low-carbon solutions. Canada and other countries have set a price on carbon at $40 per ton, which is expected to go to $170 per ton by 2030. Businesses know this, and are working to get to net zero.
But in addition to reducing carbon expenditures, there is another opportunity for small businesses to participate in a voluntary carbon market, which will pay businesses for carbon offsets. The prices range wildly from philanthropists like billionaire Bill Gates that have paid as much as $500 per ton to others, who might pay as little as $4 per ton.
These credits often serve a dual purpose. They reduce carbon emissions but also provide sustainable and healthier solutions. McCarthy noted how good it is to help certain developing communities get off diesel and really help people make a living.
While there is a real benefit to small businesses participating in these programs, it can be difficult. McCarthy remembers a conversation with the owner of a small hotel who was trying to get verification that their small hotel was net zero. The best they could find was a company that would charge them a minimum of $8,000 to, as McCarthy put it, “come through with a clipboard.” In addition, the owner would be required to put up an investment of about $100,000.
“This was for a small, ten-unit hotel,” said McCarthy. “We really wanted to bring technology into this space to make this a reality for small building owners,” making an incentive for companies to take action, “to have an incentive to put solar on their roof right now, for businesses to go green right now.
“We wanted to bring the payback period down from 10 to 15 years to a one-year payback so they could find financing. Everything after that first year is profit.”
ROCx and Blockchain
ROCarbon Labs is launching ROCx — an exchange that is going to be a marketplace with premium credit offset. The company has third-party auditors in place to certify the results of components used by small businesses. They will automate the process of reporting on the Environmental, Social and Government reporting so the businesses can claim and sell their credits.
ROCarbon’s solution uses AI to analyze data from hundreds of hardware components, and devices used in various implementations. The AI monitoring provides reporting and alerts that will check for anomalies, and warn owners so they can take action. According to McCarthy, “the machine learning will know what the equipment should be doing over time, and let us know if something is different.”
ROCarbon focuses on making solutions repeatable. Instead of treating each as a “one-off,” it is developing “playbooks” — solutions developed for a small, 10-room hotel that can be replicated many times for similar businesses.
The company is also working to bring out an environmentally responsible blockchain solution. Blockchain is wonderfully suited to providing certification because it provides an “immutable and unchangeable” history. But blockchain is often regarded as an environmental nightmare because of its intensive use of energy.
McCarthy thinks they may have this beaten.
“We have blockchain partners who we have initially verified — and we’re going to be measuring with our technology — that are 99 per cent more efficient than typical blockchains because they don’t use the ‘heavy miners.’”
It is an incredible-sounding solution, and McCarthy has a great deal of credibility in this area. Her first entrepreneurial business was a blockchain startup that, among other things, installed one of the first bitcoin ATMs on the campus of Dalhousie University in Halifax, where she was studying. McCarthy remains head of the eastern portion of the Blockchain Education Network.
McCarthy moved away from blockchain initially because she couldn’t reconcile the major energy usage of the blockchain and her own environmental concerns. However, her new business appears to have found a way to bridge this.
Cloud and AI
McCarthy said they could not have built the business without the cloud and AI components that are available for small businesses. But the cloud has also given them other benefits. The company is totally decentralized, with McCarthy in Halifax and others located around the country. They have the ability to reach even the remotest Canadian communities. McCarthy wants to start hiring locals in these communities, training them to be “our virtual energy analysts who compile all this data.”
ROCarbon has certainly made great strides in a short time, and appears to have found a strong market that can serve businesses of all sizes. Although they are focused on small businesses, often located far away from major Canadian cities, they have also attracted the attention of larger companies like IKEA, who admire their “playbook” approach, and have many similar buildings in their portfolio.
“We have opportunities across North America,” says McCarthy, “including some huge projects that we’re about to announce — potentially some in Taiwan and Japan — as well as opportunities with another major retailer.”