Robin Saluoks: 0:03

The tricky part in farming is that average farmer has only 40 trials throughout the career. Basically, let's say from the age of 25 to 65, there is 40 years and every year you can try one time. So this makes farmers conservative and it's easier for them to continue as they did in the past. So even though those practices make sense, there should be a big push or pull and also some advice. And this is what we offer

Tom Raftery: 0:32

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast. The number one podcast, showcasing best practices in climate emission, reductions and removals. And I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice, to be sure you don't miss any episodes. Hi, everyone. Welcome to the Climate Confident podcast. My name is Tom Raftery. And today I'm excited to announce a new way for you to support this podcast. If you find value in this podcast and want to help me continue creating informative and engaging episodes, I invite you to visit our support page by going to www.climateconfidentpodcast.com and clicking on the support button in the podcast logo or, by following the link in the show notes. You can make small, regular donation starting at just three euros per month. That's less than the cost of a cup of coffee. And now I would like to extend my sincere gratitude to Lorcan Sheehan from PerformanSC and Anthony Raftis from Nano Watt Solutions for being the first listeners to step up and support this podcast. I hope you'll consider supporting my mission to keep the conversation on climate change going. And joining me today on the podcast. I have my special guest, Robin. Robin, welcome to the podcast. Would you like to introduce yourself?

Robin Saluoks: 2:04

Hi. Glad to be here. Yeah, my name is Robin Robin Saluoks, and I'm the CEO of eAgronom. So I'm coming from Estonia from the farming family but studied computer science and ended up building tools for farmers.

Tom Raftery: 2:19

Okay. And Why, why did you get into this space? Your company's name is eAgronom. You're building tools for farmers. Why?

Robin Saluoks: 2:28

Yeah, well, as I said I'm coming from the farming family, so my father has thousand 400 hectare organic grain farm in South Estonia. And In 2016 summer, he was looking for a tool to manage our farm and something that would include the planning, people management, financials reporting to, to the government and et cetera. And at the time, we didn't find anything good in the market that was suitable for our farm. And, and I ended up building for uh, our own use. And then another farmer saw this and wanted to start using it as well, but well that was in 2016 and a lot has changed. Uh, Now we are using eAgronom as a carbon greenhouse gas tracker because we believe that every decision in the farm in the future has to go through this carbon filter. Basically is it increasing my emissions or is it reducing my emissions? And that farmers will start getting different benefits if they have lower emissions and manage their farm sustainably.

Tom Raftery: 3:32

Okay. And how do you track the emissions on a farm?

Robin Saluoks: 3:36

Yeah, so, it's a combination of modeling and soil sampling. So first of all, we gather data with our tool, secondly, we verify if the data is correct, with satellite image, and machinery integrations. And then thirdly we run this data through different models. Models for emissions that are in most cases I P PCC guidelines and also through the soil model. Then the soil model is calibrated in every five years. So on approximately 10% of the fields, we are doing heavy soil sampling to further calibrate the model and make sure that it is working inside our project as well.

Tom Raftery: 4:17

Okay. And what kind of benefits do farmers get from this? Because farmers have lots of pressures on them today. Why would they care about their carbon emissions?

Robin Saluoks: 4:30

Yeah. Well, first of all, many of those practices are um, anyways reasonable for farmers. And there are farmers who are already applying them, like reducing tilling or cultivation, maybe then in some regions applying no tilling, the cover crops, crop rotation introducing precision fertilization, and so on. So those are practices that make sense anyways. But I guess the tricky part in farming is that average farmer has only 40 trials throughout the career. Basically, let's say from the age of 25 to 65, there is 40 years and every year you can try one time. So this makes farmers conservative and it's easier for them to continue as they did in the past. So even though those practices make sense, there should be a big push or pull and also some advice. And this is what we offer. So you asked what are those incentives? So one is the carbon credit income. I think voluntary carbon credit market is like getting more and more popular and people know about this more and more, and this is the most applicable benefit for farmers today. But also we have launched sustainable loans together with one bank and in discussions with more than 15 other banks right now, meaning that farmers who apply sustainable get better interest rates from the bank. It's very similar as you, if you buy electric car, then you get better interest rates. But for bank, it's easy to detect which car is electric and which car is fuel based. But with sustainable farmers, it's trickier and same things. Maybe even the biggest benefit in the long run is low emission food premium. It's not that applicable right now, but we already see food companies saying that they're ready to pay premium if farmer is growing food with lower emissions. And it's not very common today, but there is a lot of talk and we see already first company starting to do it and then I guess last, one from the private sector that we see right now and we have introduced to some of our, clients is also sustainable land program where some landlords want to make sure that their land is managed sustainably and they're giving smaller interest rate or smaller land, rent prices to farmers with positive humus balance. And then we see governments also giving different subsidies to farmers who apply those practices.

Tom Raftery: 7:00

Okay. So there are significant benefits from farmers from multiple streams, and what you are doing is you are helping those farmers realize those benefits by baselining their current emissions, and then tracking the reduction of their emissions. And are you also suggesting initiatives for them to try out to further reduce their emissions?

Robin Saluoks: 7:26

Yeah, sure. And we see that advising farmers is a big part of it. So incentives alone are not enough, but we have, well, we have 70 people working in the eAgronom seven zero, and around eight or nine agronomists on the payroll. So, their role is in some cases directly and in some cases through our partners, to educate farmers, and based on discussing with farmers and how in this specific farm this farmer can change practices in a way that the emissions goes smaller and humus balance is positive, so humus is the richest part of the soil that is part of it is carbon. So we give this advice in many cases through partners though, so we are partnering up with companies who sell tractors, maybe even inputs and, and other things to farmers. So who already have this farmer network and trust, and we help them to advise farmers to apply those sustainable practices.

Tom Raftery: 8:24

Okay. And let's take a hypothetical example. Let's say I'm a farmer. I have a thousand hectare farm and I'm spreading pesticides every, I don't know, three months. I don't know how often pesticides are spread. And I'm using diesel tractors to do it. Now, let's say I switched from diesel tractors to electric tractors, and suddenly that's far more sustainable, less emissions. Does that benefit that I accrue from those reduced emissions? Does that continue or is that just a one year benefit?

Robin Saluoks: 8:59

Well, benefit is so you set the baseline and then this benefit. You have to reset the baseline in every seven years. But then if this practice is for some reason not yet common practice in the region and/or wouldn't be profitable without this extra subsidy, then you can continue generating credits out of it as well. Now coming back to the beginning of your question then electric tractors, at least with farmers that we work with today are not really there yet. So the main practice changes that that those farmers can apply are a few things. First of all, increasing the biomass. So, um, using every opportunity to grow some extra crop. For example, if in the autumn after harvesting there is some time before seeding the next crop then farmer can put cover crop into this place. The only goal of this cover crop is to sequester additional CO2 with photosynthesis from the air, and then later bacterias will turn it into the soil and the carbon is stored over there. So to add more biomass and secondly to reduce the soil disturbance. Every time you cultivate the soil and you disturb the soil, the emissions are increasing, especially in the warmer and drier climates. So that's the second thing that farmers can do. Reducing tilling, so cultivation during the soil around, and even going to no-tilling, meaning not cultivating at all. So basically those are the two biggest changes that farmers can do and they can generate credits out of it for many, many years.

Tom Raftery: 10:34

Okay. Tilling, as I understand it, is like, is the same as plowing, right? What is the function of plowing? Is it to turn the soil over for seeding for a, a new year? And if so, how do you not do it?

Robin Saluoks: 10:49

Yeah. So, plow and tow is one very specific type of tilling when you really do it very deeply. But the tilling task, main purpose of this is to fight with those other plants that are growing in the, in the ground and competing with your main crop. So, uh, first of all, reducing tilling means that you do this in the right moment always, and that helps you to still fight the weed. But you have to disturb the soil less. Then the second thing that you can do is use crop rotations. So, basically, if you grow only one crop every year, then you have always the same environment and the same weed is coming back and back and back. Now if you change the environment, then the same weed may find it harder to grow over over there and it's easier to fight it. But if you go to no tilling, so no cultivation at all, then the truth is those farmers use more chemicals. Basically they use some other chemicals to kill the weed and that, that's I guess the ne negative side of it. But the positive side is that you use much less fuel and your, your emissions are much smaller.

Tom Raftery: 12:04

Okay. Okay. So what would be the top three, four, or five ways that a farmer can reduce their emissions?

Robin Saluoks: 12:14

Yeah, well, for crop farmers, those who are working with crops, this is adding cover crops and adding cover crops it helps in many ways. So it captures some of the emissions and turns it into soil. But if you add legumes to some really specific type of crops, like peas and beans and, their relatives, then they are with bacterias also capturing nitrogen from there. So that means that you have to put less fertilizers in the next year, and this again, reduces your emissions. So reduces fertilizers is the, is the second thing and third thing, reducing cultivations. So, it reduces emissions in a few ways. First of all, you don't burn that much fuel. And secondly, your soil emissions are smaller. You actually sequester more carbon in the soil. And then the fourth one it's also connected with fertilization, is going to precision fertilizing. So meaning that if you put fertilizers to all fields in exactly the same way, that would mean that it, it's a bit similar if you have like three children and one of them is sick, you give the same treatment to all of them. So it doesn't make sense, right? So, that's why precision fertilization means that you take the exact data that's coming out from this field and you treat this field separately from everyone else. So, th those are the main things for crop farmers, for animal farmers. I guess the two biggest ones is one changing the feed. We are not working that much with animal farmers ourselves, so I don't know details, but I know that depending on the feed, the emissions are different. And secondly there are ways to capture the methane and turn this into energy. So it first of all creates then energy and there is no additional power plant needed. But secondly CO2 is much lighter greenhouse gas than methane. So, the total emissions are also smaller.

Tom Raftery: 14:41

Okay, great. And now you mentioned one way that farmers can benefit from, from this is the carbon credits. Also, you said that banks are increasingly interested in providing lower interest loans to farmers so they can get cheaper finance. Can you talk a little bit about that?

Robin Saluoks: 15:01

Yeah, that's super in interesting. It's probably going to happen in many places in the world, but European Union is taking the lead and European Union over here we have this big target of green deal becoming carbon neutral by 2050 and reducing emissions. I think it was cutting them by half by 2030 already. So very ambitious targets. It means very big investments are needed. Now, how European Union wants to uh, reach this goal is by helping banks to detect which investments are worth more regarding the climate change mitigation. And then basically there is thing that's called taxonomy. And this is description of what practices in different industries are considered sustainable. And what practices are considered not sustainable. And same in agriculture. Now banks, it's right now just a guideline and banks just need to report this information, but they already see that in the future there might be new regulations coming in. So they want to be ahead of the curve and that's why they give already today, better terms for sustainable farmers to electric car buyer, to energy a, class apartments and et cetera. And today it's just better terms, a bit better terms, and it's a bit like salad in McDonald's. So basically McDonald's can say that well, we have all kinds of options. We have healthy options. We have not so healthy, and people choose what they want. So today it's not the game changer, but the assumption is that at least it's been sustainable finance. In the future, banks will not give any loans at all to very prone companies and, and, and very brown farmers as well.

Tom Raftery: 16:49

Okay. And what countries is that happening in today? And I mean, you said European Union, is it all European Union countries or is it just a subset of them? And I know you're based in Estonia and you're working in several countries in Europe, but not all countries. So maybe you can't speak to all countries. I don't know.

Robin Saluoks: 17:11

Well, all banks are in European Union, are required to report on how big part of the numbers is today green and how big part is not. And I think in all, all countries, banks have already done the easiest steps, like giving some slightly better terms to electric car buyers and etc. But the problem with farming is that it's more trickier one, and therefore not all banks are are, uh ready, but in Europe in, in the long run all banks have starts supplying it. European Union is so connected. But some countries are more ahead, like Scandinavia. So the bank, what we are working with is Swedbank, the biggest bank in Sweden and Baltics. So, they were the first one to launch it together with us. But we already right now see banks from Spain, Germany, Austria Poland, other Baltic countries even Ukraine and et cetera. Uh, Speaking with us. Ukrainian banks are, are also thinking that. They want to be prepared for Ukraine coming part of European Union. Hopefully it happens and and then by that time they want to be ready and already applying the same principles.

Tom Raftery: 18:22

Fascinating. And I alluded to it there, but what countries are you operating in at the moment and, and where do you hope to operate in soon, Well, in the near future that you're not currently operating in?

Robin Saluoks: 18:35

So we are in Poland, Baltics, Romania, Czech Republic. First discussions going on in Ukraine. We have people on the ground and farmers now in Spain. Yeah, that's about it. In Europe we have discussions in, I think four other European countries as well, but no clients yet. And then in Africa we have first clients in Tanzania, Kenya, Uganda, so those East African countries, and then in South Africa as well, and discussions in some other countries as well.

Tom Raftery: 19:06

Okay. If I'm a farmer who's already doing a lot of sustainable agriculture, is there a big advantage for me to joining or to becoming a, a, a customer of yourself? Because the first thing you need to do is set your baseline, and if your baseline is already pretty low, are you gonna get much of a benefit from it?

Robin Saluoks: 19:31

Good question. So, let's park the Carbon credit program and come back to this for everything else. Yes, farmers get those benefits in sustainable loans, it doesn't depend on whether farmer did those previously or, or just started. So farmer can get for selling grain with low emission premium. Again, same thing. If farmer already did, did it even better. It's a sustainable land program. Same thing. Now the carbon credit is trickier. The principle of carbon credits in general, not even in agriculture, is that it is additional CO2 removed from atmosphere. And companies want to support the positive chains. So for that reason right now we cannot create credit out of it. and we are working under Vera Method dollars where it's quite clear I guess, there are few things to be hopeful for still. First of all in, in the future, farmers will have a choice. Either they sell their food with low emission premium or they sell their credits. They cannot do both at the same time. So if they sell their credits then someone else can claim their carbon neutral and they cannot sell their food as let's say carbon neutral at the same time. Unless they like, produce more credits that they, than they would need for themselves, it would be double counting. That's, that's, that's one thing. So, there will be option for those farmers who are already applying those practices. And the second hope is European Commission carbon removal framework that came out I think a week or two ago. And it's it's framework that has goal of ensuring the high quality of credits in the European Union. So only if, if companies want to claim that they're carbon neutral in the future, they can only claim if they buy credits that are created with those principles. It's proposal today. It's not, not uh, legislation yet. Now over there it's written that the baseline might become regional. So basically the regional average will be the baseline and the farmers and exactly that was pointed out to not discriminate those farmers who are early adopters of those sustainable practices. So from one way it really makes sense, but on the other hand, we don't know how buyers of carbon credits will react to this and maybe they still prefer additional credits. So, yeah, this is, well maybe just to give the context this topic, but it is one of the hottest topics in carbon farming right now.

Tom Raftery: 22:07

I can imagine. I can imagine. And so you're saying as well, food companies are starting to offer a premium to farmers who are sustainably farming?

Robin Saluoks: 22:19

Yeah. Exactly. So over there is slightly similar thing that's happening with banks. So, European Union is also considering more legislations and different rules to bigger companies. And food companies are usually big companies, so, they want to be ahead of the curve and prepare for this. So basically, and the best way to prepare is to change their value chain, and offer premium for food that is grown with with lower emissions. And this is, well, one thing is legislations, but the other thing is brands. So we see more and more brands wanting to connect themselves with sustainability and global marketing budget is in trillions. So, this gives some hope that if, if that money will go more toward sustainability rather than, well it's competing basically with with online marketing, with sponsoring some like football clubs and et cetera. And I love football. I, I used to play it myself as well, but if you see more money going to sustainability projects. And that's also very helpful for the climate change goals. And in food companies today that's happening. But in the long run to accelerate the process, some more regulations are needed. And this is what the European Union knows. They have said publicly that current regulations are not enough to reach the targets, so there will be additional ones.

Tom Raftery: 23:48

Okay. The, the other mechanism you mentioned is that farmers who are renting their land as opposed to owners of the land, they're farming. Some of the land owners are now giving reduced rental rates to farmers who are using more sustainable practices, where is that happening and how widespread is it?

Robin Saluoks: 24:12

Well, it's not widespread, and this is happening right now with very one, very big landowner in Estonia. And they're doing it for, I think for two reasons, maybe even three reasons. Number one I think in any case, to be a front runner, they themselves believe that the sustainability is very important. So, even though others are not yet doing it, then it's important for them. Second, but they also believe that there are some financial benefits in the long run because secondly they, they have seen that they, themselves are ready to pay more for land that has more humus over there because this land can give more yield with less inputs. And therefore farmers are ready to pay more rent for this land. So they believe that in the long run it actually increases their land value as well. And thirdly they have also seen that farmers who apply those sustainable practices a are better rent payers. So, always in every year there are some farmers who are getting into struggle with pay the rent. But those are usually not the farmers who apply sustainable practices because those practices in most cases make farmers more efficient, even though they might not be their current habits. And it might be farmer maybe has to think. But in the long run it's more profitable as well. So, they're doing it because they believe it's important, but they also see some financial benefits and want to prove the other landowners that there is some financial model behind this as well and financial reason.

Tom Raftery: 25:45

Okay. Okay. This is all fascinating because agriculture is one of the highest emitting industries out there, and it's, I have to think one of the hardest to reduce because there's so many stakeholders involved and a a lot of them are, are quite small. So this is a, a really important industry to get right. And, and, and we need lots of incentives, I think. How are you guys being funded today? Is it all bootstrapped? Is it all coming from clients or how, how is that working for you??

Robin Saluoks: 26:22

Yeah. Few sources. So first of all, we have raised venture capital funds as well. We have raised 10 million euros so far. So we use this to fund our operations, but we don't use this money to pay to farmers and we don't like we have a clear business model behind the carbon program. So secondly, the carbon program. We have secured credit sales. So we have already sold credits at big volumes and since we are following some really tough tools and have certified carbon credit program, then there is very clear market for our credits. And and thanks to this we can also do some prepayment with farmers who are just getting started and there is no credit sold yet. But they need some funding to get started. And we have collaboration with some banks and financial institutions who are then financing us so that we could do those prepayments. And then once the credits are out, the come financiation want to offset our, our budgeting them. So those are the main main sources of funding for us.

Tom Raftery: 27:28

Okay, fantastic. And where to from here? What are your, what are your plans for the next five, 10 years?

Robin Saluoks: 27:36

Well, I guess one very important thing is that in the next years we want to have a clear plan for agriculture to become carbon neutral. And we, we feel that it's possible. And we have the vision of how it will be what farmers will they have to change how it take a lower emissions, how it, they can increase sequestration, but we want to have very clear roadmap for the global agriculture. That's, that's one very important thing. Secondly moving to more markets, but mainly in Europe and Africa, unless we find some really strong partner in other regions. So we see that Europe and Africa are big enough but but if we, if we find some really strong partner in other regions, then, then we can consider that as well. And then on the, carbon program side, we want to find more ways for farmers to uh, sequester the carbon or, or rather package more ways because some of the things we know that help, like agroforestry or biochar are not yet applicable for farmers in the in scalable way. So it's something that's, Some farmers are doing it, but we haven't packaged them yet. So this is something we want to do as well. Happy to do it together with some other companies and then bring it to farmers.

Tom Raftery: 28:55

Okay. Bit of a left field question now, but last year, I had a guy on the podcast from a German company called Bewa. They're a, a big agricultural company, agritech company. And one of the things that they were doing with their farmers was they were paying them a premium if the farmers planted wild flowers around the borders of their fields. Because that increased biodiversity and increased insect life. Is, is that something that you guys can think about doing as well?

Robin Saluoks: 29:28

Absolutely. We are currently testing out different ways to measure biodiversity. And we see that biodiversity is clearly, it's very important and it's clearly side benefit of, carbon farming. But the main challenge, I guess, globally is that the metrics are not that clear. Carbon is so simple. Everything is CO2 equivalent, but it biodiversity. So this, this measuring is the trickiest part, but we are working on that front as well.

Tom Raftery: 29:57

Okay, fantastic. Fantastic. Robin, this has been really interesting. We're coming towards the end of the podcast now though. Is there any question that I haven't asked you that you wish I had or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Robin Saluoks: 30:14

No, I think we covered it all. If there are people listening who see that somehow we can work together, then we are always happy to discuss. We're already right now doing many partnerships and we see that we cannot do it all alone. But everybody has to play their part and hopes are their strength. So happy to, happy to be connected and discuss potential collaboration.

Tom Raftery: 30:36

Okay. Well that brings me nicely onto my last question, which is if people would like to get in touch with you or know more about any of the things we discussed in the podcast today, where would you have me direct them?

Robin Saluoks: 30:48

Yeah, I think LinkedIn is the best place. Well, my name is so difficult to spell the last LA name Robin Salk. So I will send you the link and people can get from there.

Tom Raftery: 30:57

Yeah, yeah, yeah. I'll, I'll put it, I'll put a link to your LinkedIn profile on the show notes and people can find it there. Fantastic. Okay, Robin, that's been great. Thanks a million for coming on the podcast today.

Robin Saluoks: 31:07

Thank you.

Tom Raftery: 31:09

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to Tom raftery@outlook.com. Or message me on LinkedIn or Twitter. If you like the show, please, don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks, catch you all next time.