Carbon credit is a tradable financial instrument that represents the right to offset greenhouse gas emissions in the atmosphere. 1 carbon credit is typically equal to the reduction or removal of 1t CO₂e of emissions. To date, about $3.8 billion has been spent on carbon removal in the carbon credit market, and about 14 million tons of CO₂e have been sold. Biochar is an important player in the carbon credit trading market. It has contributed more than 90% of carbon removal deliveries in recent years. Read on to learn how to earn carbon credits through biochar.
Classification of Carbon Credit
The core function of carbon credits is to provide quantifiable trading units for greenhouse gas emission reduction or removal. However, the difference in its type directly affects environmental benefits, market value and application scenarios. According to internationally accepted standards, carbon credits are mainly divided into two categories: Emission Reduction Credit and Removal Credits.
Emission Reduction Credit
- Carbon Emission Effect: mitigating emissions.
- Main Methods: use renewable energy, avoide deforestation, etc.
- Generation Mechanism: comparing the difference in CO₂ emissions before and after the implementation of the project.
- Price Index: low, 5-50$/ton CO₂e
Removal Credit
- Carbon Emission Effect: net negative emissions.
- Main Methods: afforestation, biochar soil carbon sequestration, etc.
- Generation Mechanism: technical means to measure the time and amount of CO₂ removed.
- Price Index: high, 150+$/ton CO₂e
Carbon Removal Technologies that Earn Carbon Credit
Terrestrial Sequestration:
- Mechanism: Through converting biomass into biochar or directly storing it in the soil. These methods slow down the decomposition rate, leading to long-term carbon sequestration.
- Technologies: Biochar Carbon Removal (BCR), Biomass Direct Storage.
- Technology Maturity: Industrialization stage.
- Carbon Sequestration Duration: Hundreds of years.
- Carbon Price: $150–$350 per ton of CO₂.
- Trading Volume: 2 million tons
- Delivery Rate: 30%.
Ocean Sequestration:
- Mechanism: By sinking carbon-rich biomass to the deep ocean or seabed, these methods leverage the ocean’s natural carbon absorption capacity, preventing carbon release.
- Technologies: Direct Ocean Removal (DOR), Marine Biomass Sinking.
- Technology Maturity: Laboratory stage.
- Carbon Sequestration Duration: Thousands of years.
- Carbon Price: $250–$1300 per ton of CO₂.
- Trading Volume: 360 thousand tons.
- Delivery Rate: 6%.
Mineralization & Weathering Sequestration:
- Mechanism: Accelerating the natural process of mineral weathering to convert CO₂ into stable mineral forms, achieving long-term sequestration.
- Technologies: Enhanced Weathering, Surficial Mineralization.
- Technology Maturity: Industrialization stage.
- Carbon Sequestration Duration: Thousands of years.
- Carbon Price: $190–$560 per ton of CO₂.
- Trading Volume: 860 thousand tons
- Delivery Rate: 5%.
Geological Sequestration:
- Mechanism: Capturing CO₂ directly from the air or during bioenergy production and injecting it into underground geological formations for long-term storage.
- Technologies: Direct Air Capture and Storage (DACCS), Bioenergy with Carbon Capture and Storage (BECCS).
- Technology Maturity: Industrialization stage.
- Carbon Sequestration Duration: Thousands of years.
- Carbon Price: $170–$500 per ton of CO₂.
- Trading Volume: 10 million tons.
- Delivery Rate: 0.1%.
Carbon Removal Capacity of Biochar: Carbon Negative
Without human intervention, plants fix CO₂ in the atmosphere through photosynthesis to form organic matter (such as cellulose, lignin, etc.). Then, when these organic matter decomposes or burns naturally. They release CO₂ or methane (CH₄) and re-enter the atmosphere. Biochar carbon removal is a technology that avoids this emission effect. It mainly has the following two stages:
Pyrolysis Process
During pyrolysis of biomass, volatile components in organic matter are separated out. Subsequently, the remaining high-carbon skeleton, biochar, forms an aromatized carbon structure. This structure is chemically stable. As a result, the originally easily decomposed “active carbon” is converted into “inert carbon”, which greatly delays the release of carbon (half-life can reach hundreds of years).
Sequestration Process
Biochar has a high stability and durability in soil. After biochar is added to the soil, its stable carbon structure can resist microbial degradation and oxidation. Therefore, it avoids the rapid decomposition into CO₂ like ordinary organic matter. This carbon-negative effect enables net carbon removal over the entire life cycle of biochar, from CO₂ uptake by the plant to pyrolysis and sequestration.
Why Choose Biochar to Obtain Carbon Credit?
Mature Technology
High Cost-effectiveness
High Delivery Rate
Mature Technology
- Industrial Production: Compared with many carbon removal technologies that are still in their early stages, BCR technology has a mature industrial production system. Biochar production equipment can be put into large-scale production at a low cost and high efficiency. This means that it can be quickly expanded around the world and meet market demand.
- Easy Certification: Biochar production technology has a mature technical certification system. This allows it to quickly pass carbon credit certification and obtain trading qualifications. This enables projects to enter the carbon credit market, saving additional time and costs. At the same time, this ensures the compliance and credibility of the project.
- Stable Removal Efficiency: The biochar carbon removal process has been verified for many years and is highly reliable. It can permanently store carbon for hundreds of years. The effect of biochar carbon sequestration is very fast and can quickly generate carbon credits. This ensures the continuity of the project’s supply in the carbon credit market.
High Cost-effectiveness
- Low Equipment Cost: Some carbon removal technologies require large-scale equipment construction, and are usually led by governments or large enterprises. BCR projects can achieve stable operation with less capital investment in equipment, so the ROI is higher. This enables start-ups to participate, broadening investment and application opportunities.
- Stable Carbon Price: The market for biochar carbon credits has formed a stable trading environment. Stable market demand has driven the stability of carbon prices, making BCR technology an attractive option for long-term investment. As more and more companies obtain carbon credits through biochar, this stability will be further enhanced.
- High Market Recognition: Biochar, as a mature carbon removal technology, has been widely recognized by the market. The existing carbon credit trading system already has a high degree of transparency and trading liquidity. This means suppliers can obtain potential buyers on a reliable market platform without worrying about sales difficulties.
High Delivery Rate
- Low Transaction Risk: The carbon sequestration effect of biochar has been fully confirmed during the verification process. There are few cases where the project fails to achieve the expected results. Therefore, the transaction risk of biochar technology is relatively low. This can ensure that companies and investors get the expected carbon credit returns.
- High Buyer Trust: BCR technology has been highly recognized by the market. Buyers have a high degree of trust in the carbon credits it generates. Biochar projects usually have good customer loyalty. Also, many companies are willing to cooperate with biochar carbon credit suppliers for a long time to ensure sustainable offset of carbon emissions.
- Sustainability: Unlike other carbon removal methods affected by climate or geographical factors, the process of biochar production is continuous and efficient. Therefore, biochar production can be carried out continuously in any region. Therefore, biochar production can provide stable support for the supply of carbon credits around the world.
Biochar Carbon Credit Acquisition Process
01 Initial Qualification
In this stage, the basic background and information of the project are provided to the carbon credit certification agency (such as Puro.earth) to assess whether the project meets the start-up conditions. The project party needs to provide a preliminary description of the technical solution, the quantitative target of expected carbon emission reduction, and whether there is external funding support.
02 Platform Agreement Signature
The project party signs a formal agreement with the carbon credit certification agency to become a carbon removal supplier. After signing the contract, the project party needs to complete the company registration and comply with the compliance requirements of the platform to officially become part of the certification platform.
03 Facility Registration
This information includes the geographical location of the project, the project scale, the type of technology used and its related parameters, the list of production equipment, etc. The project party needs to ensure that the information provided is accurate so that the certification agency can conduct an effective review and assessment.
04 Preliminary Assessment
This assessment is mainly to confirm the basic compliance of the project, ensure that it meets the minimum standards of the certification requirements, and assess whether it has the potential to become a qualified carbon removal supplier.
05 Audit Preparation
These preparations include: providing key documents such as equipment list, production records, carbon removal calculation method, monitoring plan, life cycle assessment (LCA) report, etc. The project party needs to ensure that the data and records provided are traceable and consistent with the actual operation.
06 VVB Audit
Third-party validation and verification bodies (VVB) will conduct a comprehensive inspection and verification of the project implementation, carbon removal effect, facility operation, etc. This process includes on-site inspection, data verification, output accounting and other links to ensure the transparency and reliability of carbon removal activities.
07 Carbon Credit Issuance
After passing the audit, the project party will obtain carbon removal credits (CORCs). These credit certificates represent the actual amount of carbon removed by the project and can be traded on the carbon market or used by the company to offset its own carbon emissions.
08 Carbon Credit Trading
Carbon credits are usually traded through carbon credit trading platforms or through private agreements. Project parties can sell the carbon credits they obtain to companies or institutions that need to offset carbon emissions, or hold them as long-term assets.
Lifecycle of Biochar Carbon Removal Credits
Purchase: Undelivered
During the purchase phase, the buyer chooses to purchase carbon credits from a biochar production project. The purchased carbon credits are in the “Undelivered” state. This means that the credit has been purchased, but has not yet been delivered or used.
Delivery: Delivered
During the delivery phase, the carbon credit supplier fulfills its carbon removal commitment as agreed and delivers the carbon credits to the buyer. At this point, the carbon credit’s status changes to “Delivered”. The buyer can use it to offset its own carbon emissions or retain it as an asset.
Offset: Retired
During the offset phase, the buyer uses the delivered carbon credits to offset carbon emissions. Once the carbon credits are offset, they are “Retired”. This means that these carbon credits can no longer be traded or transferred, indicating that the buyer has fulfilled its carbon emission offset obligations.
Write at the End
As an efficient carbon sequestration technology, biochar plays an important role in carbon credit trading. The global carbon credit market is constantly developing and the technology is constantly innovating. In this process, biochar projects will play a more important role in future carbon removal efforts. In order to achieve the goal of sustainable development, the government, enterprises and all sectors of society should strengthen cooperation to promote the application of biochar technology and the improvement of the carbon credit market.