Supercritical’s New Report Shows Massive 30x Growth For The Biochar Industry, Warns About Low Quality Projects

Supercritical's New Report Shows Massive 30x Growth For The Biochar Industry, Warns About Low Quality Projects - Carbon Herald
Image: Supercritical

Supercritical – a leading carbon marketplace, just issued a new report revealing critical and striking findings about the biochar industry. Called “Boom or Bust? 2024 Biochar Market Outlook”, the report finds that biochar is poised for a massive 30x growth over the next few years, however, low-quality projects are also booming and raise concerns of inconsistency and reputational risks for the industry. 

According to the findings, the biochar market is expected to reach a capacity of 2.86Mt by 2026 compared to expected 0.43Mt in 2024, and 13Mt by 2028 which points at the staggering 30x capacity growth over the next four years. 

However, most of the projects constituting this growth have failed to pass Supercritical’s stringent vetting protocol that filters only high quality projects. Just 42% of the projects expected by 2026 have passed Supercritical’s criteria or 1.2Mt. The percentage is falling even further as only 12% of new biochar capacity expected by 2028 will meet the vetting criteria, with the remaining 88% considered low-quality.

“The influx of low-quality biochar is alarming… We can’t allow biochar to have the same reputational damage that has ravaged the avoidance market and REDD+ credits: initial signs of demand that led to rapid development of low-quality projects, creating a flood of subpar credits with little climate impact,” said Michelle You, CEO of Supercritical. 

Relevant: “We Need The Carbon Removal Market To Scale To Withstand Demand Expected By 2050” – Bojana Bajzelj, Head of Climate, Supercritical

However, high-quality projects still continue to grow, even though at a slower rate of only 9x rise in capacity. The report shows that demand for high quality biochar projects is robust with buyers having bought 41% of carbon credits from high quality projects for 2024 and 2025 in advance compared to only 13% of credits in low-quality biochar projects for 2024 and 2025.

Source: Boom or Bust? 2024 Biochar Market Outlook

Other interesting statistics include: 

  • 80% of the global volume of biochar credits is listed in the Supercritical marketplace, hinting at high accuracy of the data. 
  • ⅓ of corporate buyers use Supercritical’s marketplace to navigate the market and build portfolios of high-quality vetted projects. 
  • The average price for high-quality credits is $220 per tonne – only 30% higher than the $153/t for credits that have failed Supercritical’s vetting protocol.
  • The average spot price for biochar carbon removal credits available in 2024 and 2025 is $176.
  • Most of the buyers are opting for long-term offtake agreements to secure future supply as they worry about the quality and availability of credits. These arrangements (paying in bulk and upfront) often offer discounts of up to 37% compared to spot prices. 
  • Almost half of the upcoming biochar capacity by 2026 comes from the so-called artisanal biochar projects – projects led by thousands of distributed smallholder farmers using low-tech kilns to pyrolyze the waste biomass into biochar. While they satisfy the community benefits aspect of these projects, they are associated with risks of methane emissions from wet feedstock that is negating the carbon removal activity.
Credit: subperjab | Shutterstock

To avoid the ill fate of avoidance credits and greenwashing in the voluntary carbon market, the biochar carbon removal sector needs to focus on limiting the low quality projects growth and ensure its sustainable future. As the report highlights, the concentration of low-quality growth is a worrying indicator, however, buyers working with trusted sources in the execution of their climate strategies would ensure high-end results.

The report contains further data and details about additionality,

The report also concludes that biochar holds immense promise as a scalable carbon removal solution, however it emphasizes the necessity of robust due diligence across climate science, environmental impact, delivery risk, and social benefits, especially in securing long-term offtake agreements.

The report is available for free download here.

Relevant: Supercritical And Carbo Culture Partner To Scale Carbon Removal

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