Biochar has emerged to become a key player in the Voluntary Carbon Market. Biochar credits are removals by nature, and they offer highly effective and scalable solutions for carbon sequestration. For small and medium-sized enterprises (SMEs) looking to invest in sustainable practices, it is important to understand the impact of biochar CO2 offsets.
In this article, we will explore what biochar carbon credits are, why they are important, and the advantages of acquiring them. Additionally, we will highlight five biochar carbon credits projects that are ideal for SMEs, and offer guidance on how to choose the right project for your needs.
What are Biochar Carbon Credits?
Biochar carbon credits are created through carbon offset projects that involve the production and use of biochar to sequester carbon. Biochar is a form of charcoal produced by heating organic material, such as wood, manure, or leaves, in a process known as pyrolysis. This process occurs in the absence or near-absence of oxygen, resulting in a stable, carbon-rich product. Used as soil amendment, biochar can sequester carbon for hundreds to thousands of years, thus reducing the amount of CO2 in the atmosphere almost permanently.
Biochar also offers several additional benefits:
- Soil Health: Biochar enhances water retention, nutrient availability, and microbial activity in soils, leading to healthier agricultural systems.
- Economic Benefits: By improving soil structure and fertility, biochar can increase crop yields, providing economic benefits for farmers.
- Versatility: Beyond agriculture, biochar can be used in wastewater treatment, as a construction material, and as a replacement for fossil fuels in certain industrial processes, making it a versatile tool for environmental sustainability.
Why are Biochar Carbon Credits Important?
Biochar carbon credits play a vital role in addressing climate change by offering a sustainable solution for carbon sequestration. Consider these compelling statistics:
- Significant Carbon Removal: Biochar has the potential to remove between 0.5 to 2 gigatons of CO2 per year globally.
- Durability: In mid-2023, biochar carbon removal accounted for over 90% of all durable carbon dioxide removal (CDR) deliveries.
- Highest Net CO2 Impact: The EU energy system's current carbon footprint shows that biochar carbon removal offers the highest net CO2 effect per metric ton of biomass, making it essential for achieving net-zero pathways.
- Market Growth: With a current production rate of 350,000 metric tons annually and revenues expected to grow to $3.3 billion by 2025, the biochar market is expanding rapidly.
The Top 5 Biochar Carbon Credits Projects for SMEs
In this section, we will highlight the top five biochar carbon credits projects that demonstrate significant impact in reducing carbon emissions. These projects stand out for their effectiveness and innovation in utilizing biochar to remove carbon from the atmosphere, improve soil health, and support sustainable agriculture.
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Danish Biochar Carbon Capture
Project Description
SkyClean produces high-quality biochar, which is both created and sequestered on Danish farmland. Their technology emphasizes affordability and scalability. With the launch of a new commercial-scale facility in 2024, the project aims to capture substantial amounts of CO2.
Price per tCO2
€150.00
Verification
EBC-Sink
Vintage
2022
Pros
- Long-Lasting Sequestration: The carbon sequestration lasts for more than 100 years, providing a long-term solution for carbon removal.
- Scalability and Technological Advancement: SkyClean's focus on low-cost, large-scale production is a significant advantage. With the operation of their second prototype plant and the upcoming commercial-scale plant, the project demonstrates a clear pathway to expanding its capacity and impact, which is crucial for making a substantial difference in carbon sequestration efforts.
- Regional Impact and Innovation in Northern Europe: By being located in Denmark and targeting the Northern European region, the project can inspire and drive similar projects, enhancing overall climate action in Europe.
Cons
- New Project Uncertainties: As a relatively new project with a commercial-scale plant expected to start operating in 2024, there are inherent uncertainties associated with its long-term performance and scalability. Factors such as operational efficiency, market acceptance, and unforeseen technical challenges could impact the project's success and its ability to meet the intended goals.
Why we like it
SkyClean’s innovative technology, certified high-quality biochar, and planned commercial-scale expansion make it a promising project for durable and effective carbon sequestration.
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Biochar California
Project Description
Corigin's project in Merced, California, utilizes almond shells as a feedstock to produce high-quality biochar. This biochar is directly incorporated into the soil, effectively preventing the agricultural residue from decomposing or being incinerated. The initiative emphasizes scalable biochar production and has a verified capacity for substantial carbon sequestration.
Price per tCO2
$200
Verification
Carbon Sink
Vintage
2023
Pros
- Utilization of Agricultural Waste: The project effectively uses almond shells, a by-product of almond farming, as feedstock for biochar production. This adds value to agricultural residues and supports sustainable farming practices.
- Proven Market Acceptance: With 57% of its capacity already utilized, the project demonstrates proven market acceptance and operational effectiveness. This indicates a level of reliability and market trust in the project's ability to deliver on its promises.
- Durable Carbon Sequestration: The project ensures that biochar is applied directly to the soil, guaranteeing that the carbon remains sequestered for over 100 years. This long-term sequestration is crucial for meaningful climate impact and aligns with stringent EBC-Sink guidelines.
Cons
- Feedstock Dependency: The project's reliance on almond shells as a primary feedstock may pose challenges if there are fluctuations in almond production / availability. This dependency on a specific agricultural residue could limit the project's scalability and resilience to changes in the supply chain.
Why we like it
Corigin’s project stands out for its effective use of agricultural waste, proven market acceptance, and commitment to durable carbon sequestration. By addressing both waste management and carbon removal, it offers a holistic and sustainable solution for climate mitigation.
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Austro-German Biochar Collaboration
Project Description
This portfolio is based on the agricultural application of biochar in Vorarlberg, Austria and surrounding areas. The focus of this project is on regional application and minimizing transport distances. The biochar was applied in Southern Germany and neighboring regions, sequestering CO2 for over 100 years.
Price per tCO2
€180.00
Verification
EBC-Sink
Vintage
2021
Pros
- Regional Focus and Low Transport Emissions: By concentrating on local application within Austria and Germany, the project minimizes transportation emissions, enhancing its overall environmental benefit. This regional approach supports local agriculture and ensures the sustainability of the biochar application process.
- Capacity: With a total capacity of 52.5107 tCO₂e, this project has the potential for substantial carbon sequestration. Although only 2% of the capacity has been utilized, the large remaining capacity presents a significant opportunity for future carbon removal.
- Longevity: The biochar used in this project sequesters carbon for over 100 years, providing a long-term solution for carbon storage and contributing to the fight against climate change.
Cons
- Older Vintages: The majority of the vintages in this portfolio are from 2021 (61%), which might be considered less current compared to newer projects. This could impact the perception and relevance of the credits.
Why we like it
This project’s emphasis on regional application and minimal transport distances makes it an environmentally efficient choice. Its large capacity and proven longevity in carbon sequestration add to its appeal as a sustainable solution for carbon removal in Western Europe.
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Empowering Farmers with Biochar in India
Project Description
Dutch Carboneers support smallholder farmers in Odisha, India, to produce, own, and benefit from biochar application and carbon credit sales. This project empowers local farmers with the rights, technology, and training to produce biochar, and it helps to fight droughts as well as improves soil health. Biochar's porosity increases soil water holding capacity, enhances productivity, and provides additional environmental benefits, while carbon credit revenue supports local communities and poverty reduction.
Price per tCO2
€155.00
Verification
Artisan
Vintage
2023
Pros
- Empowerment of Local Farmers: This project empowers smallholder farmers by providing them with the necessary tools, training, and technology to produce and benefit from biochar. This approach enhances local capacities and promotes sustainable agricultural practices.
- Environmental and Economic Benefits: Biochar application helps combat drought, increases soil water holding capacity, reduces nitrogen leaching, and minimizes erosion. Additionally, the revenue from carbon credit sales boosts local communities' resilience and protects against poverty.
- Decentralized Production Model: The decentralized approach of this project ensures that biochar production and application are sustainable and locally managed. This model supports rural agricultural areas in the global south, making the technology accessible and beneficial for farmers.
Cons
- Scalability: The project has a capacity of 15.2409 tCO₂e at the moment. This is relatively small compared to larger industrial projects. While it has significant local benefits, the overall impact on global carbon sequestration may be limited unless the model is widely replicated.
Why we like it
The Dutch Carboneers' project in Odisha excels in empowering smallholder farmers, offering both environmental and economic advantages. Its decentralized production model ensures sustainability and local control, presenting a strong solution for carbon sequestration and community development.
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Biochar Urban Stockholm
Project Description
This project utilizes biochar for urban applications in Stockholm, Sweden. It aims to enhance the green urban environment, boost biodiversity, and improve stormwater management. The biochar used in this project sequesters carbon for over 100 years, contributing to long-term carbon removal.
Price per tCO2
€140.00
Verification
Carbon Sink
Vintage
2022
Pros
- Urban Environmental Benefits: The application of biochar in urban areas improves green spaces, increases biodiversity, and enhances stormwater management. These benefits contribute to a healthier urban environment and improved quality of life for residents.
- High Utilization Rate: With 63% of its capacity already utilized, this project demonstrates strong market acceptance and effectiveness in its implementation. This high utilization rate indicates reliability and confidence in the project's ability to deliver results.
- Long-Term Carbon Sequestration: The biochar used in this project sequesters carbon for over 100 years, providing a durable and long-term solution for carbon removal. This aligns with stringent EBC-Sink guidelines and ensures a lasting positive impact on the environment.
Cons
- Geography: While the project has significant benefits for the urban environment in Stockholm, its reach is for this one city only.
Why we like it
The Urban Application Stockholm+ project stands out for its innovative use of biochar to enhance urban environments, demonstrating significant environmental benefits such as increased biodiversity and improved stormwater management. Its high utilization rate and commitment to long-term carbon sequestration make it a promising model for urban sustainability initiatives.
What are the Benefits of Acquiring Biochar Carbon Credits for SMEs?
For SMEs, investing in biochar carbon credits can offer several impactful benefits.
Long-Term Carbon Sequestration
Biochar carbon credits provide a reliable and durable form of carbon sequestration. Unlike other offsets that might only offer temporary benefits, biochar sequesters carbon for centuries, or even millenia. This ensures SMEs make a substantial and lasting contribution to reducing atmospheric CO2 levels, which can be particularly appealing to investors and customers focused on long-term sustainability.
Supports Innovation and Scalability in Climate Solutions
Biochar projects often involve innovative technologies and practices that can be scaled up over time. By investing in these projects, SMEs support the development and deployment of cutting-edge climate solutions, contributing to broader technological advancements in carbon sequestration. This positioning as a forward-thinking and innovative company can enhance the corporate image and attract investment.
Brings Positive Environmental Impact Beyond Carbon Sequestration
By mitigating issues such as soil erosion, nutrient leaching, and water pollution and reducing the need for chemical fertilizers, biochar carbon credits projects offer additional environmental benefits that go beyond carbon offsetting. This comprehensive approach to sustainability can resonate well with environmentally conscious consumers and stakeholders.
Leads to Socio-Economic Benefits
Many biochar projects are implemented in rural or underdeveloped areas, providing economic opportunities and improving livelihoods. By supporting these projects, SMEs can contribute to socio-economic development, creating jobs and fostering sustainable community growth. This can improve the socio-economic resilience of the regions where these projects are implemented, demonstrating a commitment to social responsibility that can boost the company’s image.
Improves Company Reputation
Investing in biochar carbon credits demonstrates a strong commitment to environmental sustainability. This proactive approach can improve a company's reputation, making it more attractive to eco-conscious consumers, partners, and investors. Businesses that visibly contribute to sustainability are often viewed more favorably in the market, leading to increased customer loyalty and brand differentiation.
By understanding and leveraging these benefits, SMEs can make informed decisions about investing in biochar carbon credits, ensuring both environmental impact and business growth.
Case Study: Swiss Re
This year, reinsurance company Swiss Re entered into a landmark agreement with Carbonfuture and Exomad Green to purchase biochar carbon removal credits. This deal is part of Swiss Re's broader strategy to offset their carbon footprint and support innovative carbon removal technologies.
The Exomad Green project, located in Bolivia, aims to deliver over 32,000 tons of carbon dioxide removal credits by the summer of 2024. This project not only sequesters carbon but also provides significant co-benefits, such as reducing deforestation and improving soil fertility in local farming communities.
Swiss Re's investment in biochar carbon credits underscores the growing recognition of biochar as a viable and effective method for long-term carbon sequestration and environmental sustainability. This partnership highlights the role of large corporations in driving demand for high-quality carbon removal solutions while contributing to broader ecological and community benefits.
Practical Tips for Selecting the Right Biochar Carbon Credits Project
Selecting the right biochar carbon credits project involves careful consideration of several factors. Here we have outlined seven key considerations.
1. Establish a Budget: Determine how much you are willing to invest. Biochar carbon credits can be more expensive than other types of carbon credits, so setting a clear budget is essential.
2. Ensure Quality Verification: Look for projects that have been verified by reputable third-party organizations such as the European Biochar Certificate (EBC) or Puro.earth. This ensures the credits are legitimate and meet high standards of carbon sequestration.
3. Start with Smaller Investments: If you are new to investing in carbon credits, consider starting with a smaller investment to gain experience and understand the process before committing larger sums.
4. Align with Your Values: Choose projects that align with your company’s values and sustainability goals. For example, if your business is involved in agriculture, you might prefer projects that enhance soil health and agricultural productivity.
5. Consider Co-Benefits: Evaluate projects based on additional benefits they offer, such as improving soil health, supporting local communities, or enhancing biodiversity. These co-benefits can provide added value beyond just carbon sequestration.
6. Evaluate Project Longevity and Stability: Look for projects that have a proven track record or long-term plans to ensure the stability and longevity of the carbon sequestration. New projects may have higher risks associated with their long-term performance.
7. Support Innovative and Scalable Solutions: Invest in projects that employ innovative technologies and have the potential for scalability. This supports the development of cutting-edge climate solutions and contributes to broader technological advancements in carbon sequestration.
Final Thoughts
Investing in biochar carbon credits represents a unique opportunity for SMEs to contribute significantly to climate mitigation. Biochar's ability to sequester carbon for centuries, improve soil health, and support sustainable agricultural practices proves highly valuable for those looking to make a lasting environmental impact.
As the market continues to expand, the potential for impactful investments in biochar will likely increase, making it a smart choice for forward-thinking investors.
To learn more about how you can invest in biochar carbon credits and support technology-based carbon offset projects, browse projects here.