Beyond Barrels: Investing In Scale

Since our founding, back in 2010, we have produced charcoal from a variety of agricultural wastes—sugarcane bagasse, corn stover and husk, bean stalks, rice hulls.  And from the beginning, we've focused on locally-sourced, simple technologies for converting the waste into charcoal dust.  Eventually, after much trial, error, and iteration, our team arrived at the simplest, cheapest tool for subjecting biomass to pyrolysis—that is, carbonizing waste—which is little more than a repurposed 55 gallon steel barrel with some strategically cut holes, placed over a hole in the ground. It's cheap, easy to use, and readily replaceable in any country on Earth. But, as we've grown from making a few kilograms of charcoal to producing several tons per day, it's become clear that for all its features, a barrel kiln is not scalable. 

Barrel kilns at our production site in northern Haiti.

Barrel kilns at our production site in northern Haiti.

Charcoal is a consumable good, as opposed to a durable good like a cookstove. To be successful in the consumables business, a company has to produce at high volume.  After running the numbers, we determined that we likely need to produce and sell at least 75 tons of green charcoal per week, which is more than a 10-fold increase over our current production. This is why, last year, we set out to find a cleaner, safer, more efficient way to make charcoal from agricultural waste.

It turns out that the list of commercially viable equipment that reliably and efficiently converts agricultural waste to charcoal is very short (if we were using wood, the list is significantly longer).  Eventually, we zeroed in on a pyrolysis technology produced in Australia that showed promise.  We went to Vietnam to see it in action, test it with a variety of feedstocks, and judge the feasibility of using it in Haiti.  Ultimately, we concluded that this continuous-feed pyrolysis technology was the best option available.  To reach our target production volume, we'd need six pyrolysis units at our current factory, at a total cost of about $750,000. Now the question: how were we going to pay for it?

It was immediately clear that it was unlikely we'd be able to raise traditional grant funds for this type of expense.  Spending that amount of money on equipment—especially in Haiti—is something that very few charitable foundations are comfortable or able to do. And because the technology is specialized and untested in Haiti, we determined that impact investors would need to see it in operation before investing in our scale up plans. So we approached USAID's DIV program, who was one of our largest funders, and proposed that they help us purchase and install one pyrolysis unit, which would de-risk the investment in Carbon Roots for impact investors who were interested in our work but wary of the operational risks involved. Essentially, they put up the riskiest capital, and we'll go raise the rest.

Our new continuous-feed pyrolysis system being tested before shipment from the factory.

Our new continuous-feed pyrolysis system being tested before shipment from the factory.

After two years of research and planning, and a year of contract negotiations, we are happy to announce that in January 2017 we'll be taking the next step towards charcoal world domination and installing (as far as we can tell) the first continuous-feed pyrolysis equipment for charcoal production in Central America. At full capacity, it will produce about 10 tons of charcoal per week, while also providing heat to dry incoming agricultural waste, outgoing green charcoal briquettes, and boiling water. It also represents the final link in the scalable value chain we've spent the last few years building in Haiti, from the small holder farmers who sell us their agricultural waste, all the way down to our women retailers and household customers. 

We anticipate having our new equipment up and running in February, at which point we'll spend the following months raising funds to dramatically increase our green charcoal production and sales, with a goal of launching a second production factory in Haiti in 2018. 

This next year is gearing up to be the biggest, busiest, and most important year in the short life of our organization, during which we'll likely grow to be the largest green charcoal organization in the world. Ultimately, the upshot is that with our increased capacity to make green charcoal, we'll be able to create much more positive social and environmental impact in Haiti, and hopefully demonstrate how green charcoal can be successful in other countries across the developing world!