Biochar is produced by burning biomass in the absence of oxygen at high temperatures ranging from 500°C to 800°C (pyrolysis). The biomass at such high temperatures gets converted into black carbon.
June 26, 2025. By News Bureau
Biochar is produced by burning biomass in the absence of oxygen at high temperatures ranging from 500°C to 800°C (pyrolysis). The biomass at such high temperatures gets converted into black carbon. Moreover, a ton of biochar can capture approximately 2.57 to 3.26 tons of CO2. As biochar can reduce CO2 from the atmosphere and put it into the soil, it is a carbon removal process, and it is possible to obtain removal credit. The removal credit has the highest value in the Carbon markets, ranging between USD 100 and USD 200 per tonne of CO2 equivalent (tCO2e). The other carbon removal methods, like Direct Air Capture (DAC), Enhanced Rock Weathering (ERW), etc., are still in their nascent stage. Therefore, currently, only biochar production is a commercially viable CO2 sequestration solution.
Biochar can also be used as a fertiliser. Syngas are produced during the process and can be utilised for energy generation or heating purposes. As the production of biochar is mainly from biomass, agricultural residue, or invasive species can be used for production. In states like Haryana and Punjab, where the burning of agri-waste is one of the contributors to air pollution, biochar is one approach to avoid it. With all these combined benefits, it is perceived as the new black gold to tackle climate change. In this light, there are five areas in which startups are building in the biochar space:
- Machinery Manufacturing: These startups are currently focusing on building machines that can do pyrolysis and produce biochar. Their primary business model is around selling the machines to farmer-producer organisations (FPOs) or small and medium-sized enterprises (SMEs) who want to produce biochar to avail of carbon credits and sell the biochar as fertilisers to farmers.
- Artisanal Biochar Production: The production of biochar in a localised, decentralised manner by the end stakeholders, usually farmers, is termed Artisanal biochar. As this biochar has a high social impact, it is valued more than other biochars. Usually, the Kon-Tiki (a device designed, developed, and open-sourced by the Ithaka-institute) method is used to produce artificial biochar. As the device is simple, requires no external energy and is open source, it is affordable for rural communities to produce biochar through this method. As decentralisation is the focus, there are very few startups working in the artisanal biochar space, as there are limitations to achieving commercial viability.
- Industrial Biochar Production: The production of biochar at scale through advanced technology and in a controlled environment is termed Industrial biochar production. There are startups and SMEs who intend to produce tons of Biochar per day. They plan to lower the cost of production by achieving economies of scale. These players intend to sell the carbon credits produced and the biochar as fertilisers to farmers. However, currently, they are dependent on corporations to procure biochar carbon credits. Managing operations and production at scale is crucial for these startups to survive.
- End-to-End Solution Providers: There are startups that manufacture machines and produce industrial biochar. Their revenue model consists of two components: revenue through the sale of machinery and revenue through the sale of carbon credits.
The absence of biochar in the fertiliser market has led to overreliance on carbon credits to ensure the commercial viability of biochar production. A closer look at the Carbon Credit removal data showcases one crucial aspect. Most of the credits (50 percent) in the record are procured by one corporation, i.e., Microsoft. It has two implications for startup success:
- The number of corporates who are going to buy credit needs to be increased over a period of time to ensure the demand and supply ratio, as the value of credit is dependent on it. Oversupply and lower demand will lead to crashing prices.
- There is a need for smaller corporations to join the purchase, or it will be in the hands of large corporations. If this happens, it will hamper the development of the ecosystem as most of the startups working with these large corporations will be able to survive, tapering the development of the entire ecosystem.
Offsets are one of the core components of the scheme, which entails that these industries can fund projects which will help in Carbon removal. The corporates can claim credits from such projects and avoid fines. As biochar acts as removals, it can see an influx of corporate capital from 2026 onwards. However, nothing is certain as of today, and we need to check how the policy will be implemented.
The biochar market is an emerging space. However, permutations and combinations are present in the biochar market. The reliance on the carbon market and policy is significant and is a major impediment to the sector. One should be aware of the emerging scenario and cautiously navigate the waters.
– Akshay Joshi, Program Manager, NSRCEL
