Report: Biochar Sequesters Carbon, Revives Ecosystems, and has Potential Benefits in Dozens of Industries
Biochar is a charcoal-like material created by heating plant matter without oxygen. It is a powerful, net-negative cleantech solution that sequesters carbon, improves ecosystem health, and has dozens of uses, from fertilizer to insulation to water decontamination. A new report from Boulder-based cleantech venture capital and research firm Saoradh Enterprise Partners (SEP) analyzes opportunities in the biochar market and identifies the most investable companies.
Technology
Biochar is a net-negative product – one ton of biochar can sequester up to three tons of CO2. Pyrolysis heats biomass in the absence of oxygen – rather than combusting the material, pyrolysis thermally decomposes it. There are three pyrolysis processes to create biochar: fast, slow, and gasification. SEP analyzes all three – slow pyrolysis is the most efficient. Pyrolysis produces gasses as a byproduct, which can be condensed to oil and combined with green hydrogen to make renewable biofuel. Fast pyrolysis and gasification are more commonly used to produce fuel.
Biochar producers can source feedstock from agriculture, forestry, and urban waste – a 2016 report from the DOE estimates that one billion tons of biomass can be sustainably sourced in the US each year. Forest “fuel load” – dead or dying trees and other plant waste that make forests more susceptible to fire– is growing due to disease, climate shifts, and invasive insects. Biochar can be part of a circular forestry economy by using this forest waste as feedstock and then improving ecosystem health and aiding reforestation as a soil additive.
Applications
In addition to sequestering carbon, using biochar has myriad benefits. SEP found over 50 applications in agriculture, construction, manufacturing, health, consumer products, and other industries. According to numerous studies reviewed by SEP:
As a soil additive (the most common application), biochar improves water retention, stimulates microorganism growth, and can improve agricultural yields by 25% to 250%.
Adding a small percentage of biochar to cattle feed can reduce methane emissions by just over 10% (this application is awaiting FDA approval).
Biochar is six times more effective at removing lead from contaminated water than activated carbon.
Replacing a small percentage of the cement in concrete with biochar can reduce net GHG emissions.
Biochar can be used in insulation, plastics, textiles, cosmetics, and many other products, and it can even serve as a filler for mattresses and pillows.
Market & Companies
The global biochar market was valued at $164.5 million in 2021 and is projected to grow to $365 million by 2028. The US produces roughly 70 to 100 thousand tons of biochar annually. Although biochar has over 50 applications, it is mainly used as a soil additive, and production needs to scale significantly for biochar to be widely utilized in other applications. Transportation costs are an obstacle to market growth. Biochar producers need to be 30 miles or less from end users to be profitable, and most producers currently supply 100-500 miles away.
US biochar projects are eligible for section 45Q carbon tax credits. The recently passed Inflation Reduction Act (IRA) dramatically increases these credits and lowers the threshold for projects to qualify, which will have substantial benefits for small biochar producers.
SEP identified 141 notable biochar companies. Of these, SEP found 21 to be most interesting to investors. Most are producing biochar; some are making kilns or pyrolysis systems. The complete database of companies is available upon purchase of the report.
PURCHASE THE REPORT
The Biochar report is 128 pages and includes:
A global database of notable companies (with a US focus).
One hour of individualized support from the SEP team.
Find more details, including a full table of contents, and purchase the report on the SEP Marketplace.
ABOUT TOPIC REPORTS
Topic reports explore cleantech investment spaces with the aim to calibrate investors, uncover opportunities, and identify possible solutions to Solving Climate+ by 2050. SEP produces topic reports twice per quarter to gather data and insights important to evaluating key cleantech investment spaces as part of our Innovation Flow Reporting (IFR) service. Recent and upcoming reports include BattRe (lithium-ion battery recycling), Biochar, Bioplastics, Clean Food, Concrete and Cement, Desalination, and Refrigerants.
ABOUT INNOVATION FLOW REPORTING
SEP’s Innovation Flow Reporting (IFR) service is designed to illuminate innovation hubs and identify and capture the best cleantech commercialization opportunities for SEP and our corporate clients. More than just market research, Innovation Flow Reporting delivers actionable information. IFR uncovers new cleantech opportunities for corporate venture capital offices, innovation programs, product development teams, and R&D departments. We know it works because we use it to drive our investing.
ABOUT SAORADH ENTERPRISE PARTNERS
Saoradh Enterprise Partners (SEP) is a cleantech venture capital and research firm based in Boulder, Colorado. SEP partners with innovators, entrepreneurs, and corporations to find solutions at the magical intersection of science (what’s possible), finance (what’s bankable), industry (what’s needed), and planet (what matters). Learn more at www.saoradh.com.