Forget superfast technologies that are supposed to solve climate change. An old farming practice that removes carbon from the atmosphere is getting new attention and breakthrough money from big business.
Biochar is a black substance similar to charcoal that, when buried underground, sequesters carbon dioxide, the primary greenhouse gas that causes climate change. It has long been used to improve soil. Now it is suddenly a lucrative business thanks to carbon credits that companies use to offset their own emissions.
Among the buyers are JPMorgan Chase JPM 0.90%
& Co and Microsoft Corp.
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They’re drawn to a process that actually removes carbon from the atmosphere and bury it underground, rather than many credits whose impact on emissions isn’t clear.
Nearly all of the approximately 65,000 tons of carbon dioxide removed from the atmosphere to date have been captured using biochar, according to estimates from data provider CDR.fyi.
There isn’t much money to be made selling biochar to improve the soil. Carbon credits changed that. “When the only potential income was through biochar sales, there just wasn’t much,” said Josiah Hunt, CEO of Pacific Biochar Benefit Corp., a California startup that works with biomass power plants to produce biochar and then sell it. to farmers.
The sale of carbon credits now generates millions of dollars for some biochar companies. “The carbon credits and society’s decision to act on climate change make this a real business,” said Mr. Hunt.
He was working as a landscape architect in 2008 when he read an article in National Geographic about biochar’s potential to improve soil health and address climate change. After making his own biochar and testing it in soil, he launched the company that became Pacific Biochar a few years later.
The company struggled because the price was too high, about $600 a ton. That changed in late 2020 when the company began selling carbon credits for about $150 per ton of carbon removed to Microsoft and others through a platform called Carbonfuture.
Due to the additional income, Mr. Hunt the prices and sales grew. He now supplies biochar to vineyards and other companies. Pacific Biochar’s sales this year are expected to reach several million dollars, the majority of which will come from carbon credits.
Josiah Hunt, CEO of Pacific Biochar Benefit Corp., struggled to grow sales before carbon credits allowed him to generate additional revenue and lower prices.
Companies are willing to pay many times more for removal credits like this than traditional offsets because there is more certainty that they are removing carbon. Many offsets associated with projects such as tree preservation have been shown to have limited environmental benefits. The potential to remove large amounts of carbon and additional soil benefits make biochar credits attractive, said Brian DiMarino, JPMorgan’s chief of operational sustainability.
Biochar was used thousands of years ago by farmers in South America. They found that it helped the soil retain water and nutrients. It can be particularly effective when mixed with compost, helping with poor-quality soil that has been damaged by erosion, pollution or farming activities, farmers say.
Most biochar is made using a process called pyrolysis, which heats up organic material while limiting oxygen levels so that the material smolders instead of burning, producing the charcoal-like material. Unlike combustion, where a fuel source reacts with oxygen and releases greenhouse gases into the atmosphere, pyrolysis traps most of the carbon.
The plants used to make biochar – often agricultural waste such as corn stalks – absorb carbon as they grow. The amount of carbon emitted from biochar production may be a small fraction of what is absorbed. Burying the biochar effectively sequesters the difference.
Unlike other techniques, such as direct air capture and storage, which require building high-tech machines to suck up carbon and finding ways to bury it underground, biochar sequestration usually involves mixing the carbon-rich material with the soil . It has received a fraction of the funding and attention of other carbon removal techniques.
Pyrolysis, the process used to make biochar, traps most of the carbon by limiting the oxygen level so the material smolders rather than burns.
Because biochar essentially captures the carbon that plants take up as they grow, it is considered an effective form of carbon removal.
According to farmers, biochar is especially effective when combined with compost and then mixed with soil.
Biochar producers like California-based Pacific Biochar sell it to vineyards and other farmers who say it helps their soil and enables crop growth.
Analysts estimate that the US currently produces about 100,000 tons of biochar per year, a fraction of what would be needed to combat climate change. The US emits about 6 billion tons of greenhouse gases annually.
One of the industry’s biggest hurdles is ensuring that the carbon is retained for hundreds or thousands of years. The length of time carbon is sequestered by biochar can vary based on soil and microbial conditions.
That uncertainty, and some studies showing that the time could be shorter than expected, has led to calls for the creation of an independent standards body to oversee the new market. This also applies to other methods of carbon removal, such as direct air capture.
“We need some guardrails and good quality standards,” said Steve McIntyre, president of the vineyard management company Monterey Pacific Inc., which grows wine grapes on about 16,000 acres in central California and has been testing biochar for several years. Among those trying to create standards and drive the market are Carbonfuture and carbon removal marketplace Puro.earth, majority-owned by exchange operator Nasdaq Inc.
They monitor deletion processes before letting companies sell credits through their platforms.
The blend of biochar and compost has increased grape yields and allowed Monterey to use less potassium and phosphorus fertilizers. It’s gone so well that Monterey recently helped launch a new company that aims to begin biochar production and carbon credit generation this year.
Some wineries say that applying biochar has increased grape yields and that the compound is particularly useful in improving low-quality soil.
Governments and non-profit organizations are trying to grow the nascent industry. The U.S. Department of Agriculture recently said funding is available for farmers who apply biochar and meet certain conditions. The International Biochar Initiative is spreading the word among farmers and developers in poor countries.
Tom and Tony Marrero, 50-year-old twin brothers, started Wakefield Biochar in 2014 with their father, a professor of chemical engineering at the University of Missouri. The sale recently kicked off as the company signed contracts with major companies such as Koch Industries Inc.’s Georgia-Pacific LLC. to dispose of their wood waste by turning it into biochar.
Wakefield Biochar removed about 15,000 tons of carbon, the most in the industry, according to CDR.fyi, and generated sales of several million dollars last year. Selling carbon credits to companies including JPMorgan and reinsurance company Swiss Re AG
has enabled the company to further expand its activities.
“All of these things happen in part because of our ability to be in the carbon market,” said Tom Marrero, the company’s president and a former agent with the Federal Bureau of Investigation.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
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