How demand for quality carbon credits is fueling biochar

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Carbon credit fuel biochar pic

Now that the Wall Street Journal is writing about biochar, it’s beginning to feel like it isn’t quite the fringe industry it once was. Long valued by organic farmers and widely used by pre-industrial agrarians for millennia, biochar is finally enjoying the recognition it deserves. But to understand why, we might have to follow the money, which is of course what the Wall Street Journal did. And this leads us straight to the carbon credit market.

 

Understanding biochar 

For the uninitiated, biochar is a gritty, black substance, nearly identical to charcoal. The main differences are that biochar is pyrolyzed at a higher temperature (650°C+), and more importantly, it is used as a soil additive rather than a fuel source. Thanks to its extraordinary surface area, covered with microscopic nooks and crannies, biochar does a miraculous job of retaining moisture in the soil, like a sponge, and attracting beneficial, fertility-enhancing microbes.

At a time when conventional, chemical fertiliser prices are going through the stratosphere, the availability of an organic and relatively simple alternative is a true blessing. Not only does this farming technique have a lower cost and a negative carbon footprint, but it is actually far more effective for improving the long-term health of the soil. Biochar plays host to a diverse microcosm that flourishes in the topsoil, leading to higher crop yields and a more robust ecosystem. 

 

Carbon credits for biochar

What exactly do granulated charcoal and organic farming have to do with the carbon credit market, that complicated financial mechanism designed to incentivise environmentally positive projects and innovations?    

Besides its soil-regenerating properties, biochar is also an amazing tool for carbon removal. When plant biomass is reduced to biochar, the carbon – which the plant or tree originally drew from the atmosphere through photosynthesis – is fixed into a stable state. 

Biochar can contain up to 80 or 90% carbon, and each kg of solid carbon represents an equivalent of about 3.6 tons of carbon dioxide, one of the primary contributors to Climate Change. Applying that biochar to the soil means removing all that CO2 from the atmosphere and sequestering it for a very long time, between 100 to 1000 years. 

Therefore, a biochar producer who follows the guidelines, using sustainable biomass and keeping close track of their associated emissions, can generate precious carbon credits. Not just any carbon credits, but long-term carbon removal credits, which carry a significantly higher price tag.

Biochar closeup
High-quality biochar can work wonders for the soil while sequestering significant volumes of carbon.

Corporate interest in carbon removal and carbon credits

With net zero and carbon neutrality goals lingering in the very near future, the sudden interest in carbon offsets has been enormous. Many public entities, including the EU, set their deadline for 2050. The European Green Deal, in keeping with the Paris Agreement, has pledged to achieve an economy with net-zero greenhouse gas emissions. Meanwhile, Microsoft has promised to be carbon negative by 2030. Of course, they are adapting their systems to reduce emissions, but an major part of their strategy involves investing in carbon removal.

Every corporation now has a sustainability officer, or possibly an entire department. They’re all trying to understand carbon in general and this complex carbon trading system in particular. Ultimately, they’re seeking the most reliable and effective ways to reduce and offset their emissions.  

What many are coming to discover is that there can be a huge range in the quality of carbon credits. A recent article in the Guardian claimed to expose 90% of rainforest-related carbon credits as fraudulent and worthless. With industrialists and bureaucrats alike scrambling to counter-balance their carbon emissions, this news report naturally caused quite a stir.

Many were quick to cry foul and denounce the whole carbon trading system as a house of cards. But to the more discerning eye, this was a necessary house-cleaning for a young and rapidly evolving marketplace. Not all carbon credits are created equally, and it’s important for everyone to understand the distinctions.

Many of the rainforest projects identified by the Guardian are based on the concept of carbon avoidance. By protecting existing forests from logging, a project may contribute to the avoidance of deforestation and the subsequent release of greenhouse gases from what had been a valuable carbon sink. There’s no doubt that forestry protection is a worthwhile, even vital undertaking. Calculating these figures, however, can be very tricky when we have to predict the outcomes in a hypothetically unprotected forest. 

Biochar, by contrast, doesn’t just avoid new carbon emissions, it actually removes excess CO2 from the atmosphere. Furthermore, biochar is very tangible and measurable. You can see it, you can weigh it, and you can measure its carbon content. Finally, when you bury it in the ground, you have displaced an empirical quantity of solid carbon that is mathematically equivalent to a specific amount of CO2. Best of all, that CO2 is going to stay in the ground – where it’s plainly visible and easy to audit – for many, many centuries.

The carbon credit system rewards this activity, and rightfully so. Carbon removal is essential, and the regeneration of poor soil is an excellent co-benefit. This undoubtedly has something to do with the surging interest in biochar-related carbon credits that we’ve seen in recent years. Sustainability officers and their colleagues want to know that their carbon credit purchases are making a meaningful impact. And the general public is increasingly holding corporations accountable.

No longer easily swayed by greenwashing, the latest generation of consumers genuinely cares about the moral integrity and environmental responsibility of the brands they support. Carbon credits need to do more than fill a gap on a crowded ledger, they need to be traceable to real-life projects making a genuine difference in the world. 

Kontiki kiln for biochar production
Carbon financing makes biochar production possible in tropical communities with limited access to financial resources.

The diversity of biochar projects

Just as not every carbon credit is created equally, there’s also some variety within the realm of biochar itself. When Microsoft and Shopify made headlines in 2021 for purchasing millions of biochar-related offsets, the only credits available were coming from a handful of industrial-sized enterprises like Pacific Biochar in California.  

Carbon finance has been instrumental in subsidizing these projects operating in the wealthier regions of the Global North. More recently, though, Planboo developed a methodology for generating biochar-based carbon credits in the tropics. These projects, albeit of a much smaller scale – at least for the time being – perform the important work of managing agricultural waste and removing atmospheric carbon. 

But what really sets them apart is the impact they make in these parts of the world with less access to economic resources. Soil quality in the tropics is notoriously poor, largely due to several decades of chemical-intensive farming methods that have ignored the health of the topsoil, but also because of droughts and flooding that have been exacerbated by Climate Change. 

Better still is that the carbon credit revenue delivers US dollars from the Global North into the hands of farmers in Africa, Latin America and South Asia. And there’s some poetic justice to that, considering that the policies and practices of the Global North are largely to blame for those destructive farming methods and for Climate Change itself. 

 

Financing the future, and the future of carbon credits

As the Wall Street Journal correctly pointed out, carbon credit financing has played a major role in boosting the biochar industry. With limited awareness of the fabulous fertiliser substitute, the market for biochar still isn’t strong enough to justify the investment of energy and equipment to get a processing facility up and running. But adding some supplemental revenue through carbon credits was enough to tilt the scales and make such operations profitable.  

The idea isn’t to get rich off of carbon credits, and anyone trying to do that could probably be accused of cheating the system. The goal is to shift the dynamic just enough to make an otherwise financially unprofitable business worthwhile. The producer still needs to find value in the biochar itself, but they won’t have to sell it for top dollar in order to make ends meet. 

Moreover, carbon credits aren’t meant to be a permanent fixture, but more like a means to an end. As with solar energy, heavy subsidies may be necessary to jump-start the industry, but as biochar production expands, the benefits of scale will bring lower production costs. At the same time, increased awareness about the benefits of biochar for soil health, and as an alternative to conventional fertilisers, should lead to more value and recognition in the marketplace. 

In other words, we aren’t counting on carbon credits as a long term industry in and of themselves. Carbon credits are merely a tool, or a bridge, to help us break our most environmentally detrimental habits and practices, and pave the way for a complete array of sustainable systems and technologies. 

Gross polluters cannot expect to rely on carbon credits for the long-term either. Again, they are only intended as a stop-gap measure until these corporations and industries can reform themselves and make the necessary corrections and innovations to eliminate their excessive emissions. The more people understand this as the real purpose behind carbon finance, the more genuine progress we’ll make, and the less we’ll have to worry about people exploiting the offset system for financial gain.



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Fred

Fred Hornaday, founder of Bambu Batu, is a leading voice in the bamboo industry. He's been working in the industry since 2006 with a network that spans all six continents.

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To keep the world within 1.5 degrees of global warming and to avoid global catastrophe – we now need to not only drastically reduce our emissions but also rapidly remove them too.

However, there is very little carbon removal today with less than 50,000 tonnes of CO2 removed in 2021. It’s estimated we need to remove 10% of Global GHG emissions by 2030, which is equal to 5 billion tonnes per year. Carbon removal needs to grow 100,000 times bigger. 

Planboo is a nature-based carbon removal company, using bamboo-the fastest growing plant in the world. Like all plants, through photosynthesis bamboo absorbs CO2 and releases oxygen into the atmosphere. Because it grows so fast, it’s carbon removal potential is huge. We develop projects in Sri Lanka with local partners and supply high quality and high integrity carbon removal credits for the carbon market.