BluSky Carbon, an innovative entry into the carbon removal clean technology sector is very pleased to announce that it has entered into a sales agreement with a US-based purchaser pursuant to which the Company has agreed to supply, and the Purchaser has agreed to purchase, up to 382,213 tonnes of biochar over a period of 10 years.
The Agreement sets forth a delivery schedule designed to achieve an initial volume of approximately 22,200 short tons within the first year of operation, scaling up to approximately 40,000 tons per year for the remainder of the of the Agreement. Biochar will be supplied on as-is basis.
The moisture content will be verified with a Certificate of Analysis (CoA) at delivery. Based upon a negotiated rate of two hundred and seventy-five dollars (US$275) per ton, the sales value under the Agreement is approximately US$105 million.
Biochar is black carbon produced from biomass sources (i.e., wood chips, plant residues, manure or other agricultural waste products) for the purpose of transforming the biomass carbon into a more stable form (carbon sequestration).
It can persist for long periods of time in the soil at various depths, typically thousands of years. Biochar is produced by heating biomass or waste materials containing carbon through pyrolysis. Pyrolysis involves thermal and chemical decomposition of biomass in limited or zero supply of oxygen, typically at temperatures ranging from 300°C to 1000°C.
Biochar can be used as a soil amendment to improve soil physical and chemical properties, enhance water retention, and sequester carbon. It also contributes to climate change mitigation by stabilizing carbon in soils for thousands of years, preventing it from being released as carbon dioxide into the atmosphere. Biochar has shown promise in increasing crop yields, improving soil fertility, and reducing environmental pollution through its ability to retain nutrients and minimize greenhouse gas emissions.
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The Company notes that its ability to meet scheduled delivery of biochar beyond year 1 is conditional upon its commissioning and receiving an additional two (2) Vulcan Heavy biomass pyrolysis systems (Vulcan Heavy). The Company anticipates that each Vulcan Heavy will cost approximately US$3 million and take up to nine months to be manufactured and delivered to the job site.
BluSky’s ability to commission any Vulcan Heavy will be contingent on its ability to secure financing on acceptable terms, and no assurance can be given this will occur. At present, the Company believes that it will have the ability to produce 15,000 tons annually (with a sales value of approximately US$4 million under the Agreement) once it completes the build out of its “Kiloplex” facility, including testing and optimization of its Vulcan Heavy system.
The Company notes further that if either party fails to fulfill the terms of this Agreement, the other party may give written notice detailing the breach; thereafter, if the defaulting party does not remedy the breach within ninety (90) days, the Agreement may be terminated for cause.
Moreover, the Agreement provides that if congressional funding to the United States Department of Agriculture (USDA) is reduced relative to the funding provided to USDA in 2024, then either party shall have the right to require the other to engage in good faith negotiations to amend the price and material terms of this Agreement; in the event such terms cannot be renegotiated, the Agreement will terminate with no further obligation or liability owed by either party.
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The Agreement was concluded with the assistance of Emlia Partners (Emlia), an entity which provides specialized consulting services and an extensive network of brokers and developers with the aim of facilitating access for project financing opportunities focused on biochar solutions for agricultural enterprises.
Notes Emlia Partners’ Managing Director, Mr. John Harty, “Biochar’s inherent properties are vital to building a sustainable circular economy, offering long-term environmental benefits, while sequestering carbon. The Agreement is a testament to BluSky’s innovation and leadership, positioning them at the forefront of the biochar and carbon removal industry. We are proud to be working with their team.”
BluSky CEO Will Hessert comments, “This sale positions BluSky as a growing force in the increasingly important carbon removal economy. As with any emerging sector, there is a lot of work yet to be done. Operationally, many of the key elements are already in place, including our first large-scale Vulcan Heavy biomass pyrolysis unit. The system is currently undergoing setup and testing. The Vulcan Heavy is designed to be a capital-efficient module that can produce industrial quantities of biochar. We founded BluSky Carbon to remove gigatonnes of carbon dioxide from the atmosphere. This Agreement is a great step forward in that direction, and we aim to take many more.”
