The conversation with leadership at Greenjoules Pvt. Ltd. highlights an Indian startup pioneering drop-in green diesel made from waste agro materials, addressing energy security and India’s net-zero goals without impacting food supply. With a 70% carbon reduction and government-approved green diesel specs, the innovation opens the door to replacing imported crude and reshaping the entire petrochemical value chain.
Mubina Kapasi: You know, this is so interesting. I mean, it seems like a real alternative to the fossil fuels we are using, but not just a single-use element, like what you’ve mentioned over here, right? There’s only ethanol that can be extracted. But here you’re talking about potentially a complete replacement of crude in its fossil fuel form.
And many a times you say that, listen, from crude we can get plastic and, you know, all these derivatives. But you’re talking about extracting the same number of derivatives from your biofuel. And, you know, we talk about make in India, you’re actually innovated in India.
I’m just wondering, why has this not been explored? I mean, is it like an innovation feasibility thing that has still not been explored abroad, but you all have cracked the formula for this? Why has it not been explored globally?
Sethunath Ramaswamy: No, everybody’s trying. I mean, throughout the world, there’s a lot of work being done to develop this. Europe chose an easier path by, you know, having two stages of processing and using used cooking oil to create biodiesel and then creating a diesel-equivalent fuel from that.
But it is still expensive. So to make this fuel commercially, right, and make it commercially viable, some innovation was required. And we just happened to have people who were working in this field or who had the awareness of the food waste compositions and how it can be translated to fuel.
Finally, what are we doing? What nature does it over millions of years, we are doing it in hours. Yeah, so nature has its own speed. We are trying to hasten it.
But the end result is the same.
Mubina Kapasi: Is there an IP for your process? Are you looking at perhaps selling this, you know, your entire process, your manufacturing blueprint, if I could call it that, to foreign players? Because I’m sure this is something that’s the need of the hour. We are all talking about, you know, carbon neutrality and then circular economy, etc.
So are you looking at perhaps that angle as well, where you would like to sell this as an IP, as a copyright?
Sethunath Ramaswamy: We have spent too many nights without sleeping to sell it to anybody. We can do it. And over time, we have learned.
It is not that somebody cannot do it by throwing money at it. Finally, at the end of the day, it is basic chemistry. It’s a hydrocarbon chemistry.
So somebody can easily crack it if they spend enough time at it and money. So for us, we are trying to stay one step ahead. We are trying, for example, we have now completed the total understanding of the green fuels space.
So now we are moving into green chemicals. So we have, there is no effluent coming out of this factory. So we produce a gas which can be used, which can replace your LPG.
But today we use it for our own internal firing. We produce the fuel and we produce a solid waste which is biochar. Now that biochar is very rich in silica.
So effectively we can create green silica from it, which today silica manufacturing is a very dirty, environmentally dirty process. So we can provide a solution to that green silica. We can also take it further steps forward and we have done that in the lab to create graphene, which is green graphene, which is the building block of semiconductors.
So there’s an entire green chemical space that we have not even ventured into, but which is open for us. So let us first try to build enough capacity to solve the fuel problem.
Mubina Kapasi: Let’s talk about the capacity then. You mentioned that there is some green fuel expansion that’s currently underway plus expansion of your current facilities as well. So by when would, how long would that take and what would it take your capacity to?
Sethunath Ramaswamy: So our capacity in the next 18 to 20 months will go up to about 330,000 litres per day. Today we are at about 12,000 litres per day.
So that is what we are targeting and we will achieve that. And there is enough demand. So today we are not meeting the demand of one customer’s monthly consumption.
So for example, the fuel was used in the bullet train project. The fuel was used in the Bombay, New Bombay airport project. So multiple projects of Larsen and Toubro as a replacement to diesel.
Mubina Kapasi: So right now, since your capacity is a bit more limited, you said 12,000. What are the nature of your sales contracts? Because you know, when I look at it traditionally crude, there are either long term contracts, there’s spot sales, there are these different versions that sales takes on. How do you enter into contracts currently?
Sethunath Ramaswamy: So currently, for example, one customer tells us that today I consume 450,000 litres of diesel per month.
How much of this can you permit every month to me so that I don’t have to buy facilities? See, most of these companies have sustainability goals. They would like to go out during their quarterly earnings call and say that I’m using fuel that is not environmentally unfriendly. So we commit to that.
So we say that, OK, I can give you 100,000 litres a month. And that is what they will offtake from us as of today. I mean, because our capacity is limited, we are giving, you know, a drop of water through the camel to multiple camels.
Mubina Kapasi: Oh, I want to know a little bit. I know you mentioned that there’s more than adequate supply of your raw material that you use. But I just want to understand how does it come to you in a systematic way? Because see, at the end of the day, it’s all scattered and unorganised, right? It’s something like your, you know, the plans that we have to create waste to energy kind of a thing.
But still, there is such an unorganised supply market. So it can become difficult, especially as you grow your capacity. So what’s the value chain like there?
Sethunath Ramaswamy: So we use two types of raw materials.
One is the agro-based that is off the farm. And there are today multiple marketplaces where you can easily do price discovery of raw material, say, for example, groundnut skins or rice husk, cashew shells, right? So there are marketplaces, online marketplaces that you can go and request for 100 tonnes, 200 tonnes. And there’ll be some farmer who will easily respond to that.
So getting off the farm waste is, has, technology has made that very simple. And then you have agro-processed waste. So for example, there is, say, companies that may process turmeric.
The waste from that is agro-based, but it’s useless to man or beast. But that is very useful to us. So, but that is more structured because the company knows how much waste they generate and they do it throughout the year.
And so we can, you know, have a long-term agreement with them to offtake that. So they also give us the raw materials.
Mubina Kapasi: I want to understand the nature of your customer acquisition and also retention, because it is a new product.
Firstly, have you seen any barriers to adoption? I know that most large companies do have their goals, etc., that they have to meet SDGs, so on and so forth, but still it’s a new product. And maybe larger companies can still go ahead and say that, okay, yes, I would like to purchase, but eventually you’ll also have to move to the not so large companies. So what sort of barriers to adoption, if any, you see over there?
Sethunath Ramaswamy: What, as I said, when we started, we thought the moment you have a fuel, there’ll be a line of people ready to buy it.
But then the sales cycle is very long, because the CXO may agree to go in this direction, but the moment it comes to the plant head, he is more worried about whether his forklift will work or not, you know, by using this fuel. He has never used it. So there is the trial process is very long.
They want, if something happens, who’s responsible? If my generator set is commenced, will commence, and I have an AMC, will commence, honour it, if I have not used fossil fuel. And commence was not ready to, I mean, at that time, many years ago, not ready to test our fuel, because they said, we are not a fuel testing company. We are a engine manufacturing company.
So, but through trials, they, people have realised that, you know, and we use the fuel in our own generator sets, our own vehicles. So we tell them to visit our plant and see for themselves that everything works the same. And once they try it and it does, then slowly confidence does get good, but it’s a long process.
You absolutely hit the nail on the head, because he has the CXOs, they sign off and they say, yes, you know, this is our intention. And it’s a noble intention at that. But when it actually gets down to the grassroots and out of the factory, when you have to give it to the plant head, that’s when really your barrier comes.
Mubina Kapasi: Now, I think, as you, I think I heard correctly, the government, there is a stake of the government in the company. Okay. So what’s, what’s the stake currently?
Sethunath Ramaswamy: It’s about 5%.
Mubina Kapasi: 5%. So there’s obviously intention on the government’s part as well to constantly adopt greener fuels. They’re doing it slowly.
They did it for, you know, automobiles, they’re doing it for factories, so on and so forth. What sort of government support do you see? I mean, do you see the possibility of blending completely going and just completely being replaced by biofuels and once and for all nip it in the bud?
Sethunath Ramaswamy: Replacement will never happen, because India consumes about 90 million tonnes of diesel every year. We do not have the wherewithal to produce 90 million tonnes of biofuels today.
So it will take a lot of time. But blending, yes, blending can be done. And IOCL is very interested in doing that.
I mean, through a nudge from the government. Because they, they are able to do ethanol blending with petrol, but they are not finding any biofuel, biodiesel blending with diesel. Right, because diesel consumption is much higher.
And biodiesel is not manufactured today because of the commercial viability. And this is a good replacement. So this year, they have notified the fuel.
So now they can start because it’s the attending process, they have to have specifications, they can start off.
Mubina Kapasi: All right, well, I think the journey is just beginning with the CAPEX, with the IPO, with the notification as well. So it’s a long road ahead.
We wish you all the very best. Thank you. Thank you.