The Carbon Market Has a Permanence Problem. Biochar Is Solving It.
In 2023, the voluntary carbon market suffered its most damaging credibility crisis to date. Investigations by The Guardian, Zeit Online, and SourceMaterial found that over 90% of Verra’s rainforest offset credits may have had no real climate benefit. The market reacted. Buyers pulled back. Prices collapsed. And a quiet but significant reallocation of capital began — toward carbon removals, and specifically toward removals with measurable, durable, and independently verifiable permanence.
Biochar sits at the centre of that reallocation. It is not a new technology — civilisations in the Amazon basin were producing biochar (then called terra preta) over 2,000 years ago. But as a carbon credit asset class, it is rapidly maturing, with robust methodologies, rising registry adoption, and growing demand from corporate buyers under pressure to demonstrate genuine climate action under frameworks like the Science Based Targets initiative (SBTi), the CSRD, and the BRSR.
This article explains what biochar carbon credits are, how they are produced and verified, what they cost, who is buying them, and why the next 36 months are likely to be defining for the asset class.
What Is Biochar, and Why Does It Store Carbon?
Biochar is a stable, carbon-rich material produced through pyrolysis — the thermal decomposition of organic biomass (agricultural residues, forestry waste, food waste, manure) in a low-oxygen or oxygen-free environment at temperatures typically between 300°C and 700°C. The process simultaneously generates heat and syngas that can be used for energy, making biochar production potentially carbon-negative when renewable feedstocks are used.
The climate value of biochar lies in its recalcitrance. When organic matter decomposes naturally, the carbon it contains is released back into the atmosphere as CO₂ or methane within years to decades. Pyrolysis short-circuits that cycle. It locks approximately 50–80% of the feedstock’s carbon into a highly stable aromatic structure that, when applied to soil, resists biological decomposition for hundreds to thousands of years. The IPCC’s Sixth Assessment Report (AR6) identifies biochar as one of a small number of carbon dioxide removal (CDR) approaches with high technical potential and relatively low lifecycle emissions.
Beyond carbon storage, peer-reviewed research published in journals including Nature Sustainability and Global Change Biology documents co-benefits: improved soil water retention (up to 20% in degraded soils), increased crop yields (average 10–42% in meta-analyses across tropical soils), reduced need for synthetic fertilisers, and suppression of nitrous oxide (N₂O) emissions — themselves a potent greenhouse gas with a global warming potential 273 times that of CO₂ over 100 years.
How Biochar Carbon Credits Are Generated and Verified
A biochar carbon credit represents one tonne of CO₂ equivalent permanently removed from the atmosphere and stored in biochar that has been applied to soil or otherwise durably sequestered. The generation of a verified credit involves several steps:
- Feedstock sourcing and documentation: The biomass used must be waste-derived or sustainably sourced. Using virgin forest biomass would undermine the carbon accounting entirely. Registries require chain-of-custody documentation.
- Pyrolysis process monitoring: Temperature, residence time, and oxygen levels are monitored continuously. These variables determine the H/C ratio of the resulting biochar — a key proxy for stability. The European Biochar Certificate (EBC) and the International Biochar Initiative (IBI) both specify H/Corg ratios below 0.7 as an indicator of stability.
- Carbon quantification: Carbon content is measured through laboratory analysis. Permanence is modelled using established decay functions. Puro.earth’s CORC (Carbon Removal Certificate) methodology, one of the most widely adopted, applies a conservative permanence discount of 20% to account for uncertainty over 100-year timescales.
- Third-party verification: Independent auditors — including Bureau Veritas, SCS Global Services, and others — verify project documentation, site visits, and data integrity before credits are issued.
- Registry issuance: Credits are issued and retired on registries including Puro.earth, Verra (under VM0044), Gold Standard, and the American Carbon Registry. Each issued credit carries a unique serial number, preventing double-counting.
The methodology landscape is evolving rapidly. Verra’s VM0044 methodology, published in 2022, was a landmark — bringing biochar under the world’s largest voluntary carbon standard for the first time. Gold Standard followed with its Biochar Soil Amendment activity in 2023. Both methodologies require lifecycle assessment (LCA) accounting for emissions from feedstock transport, pyrolysis energy use, and application logistics.
Biochar vs. Other Carbon Removal Credits: The Permanence Hierarchy
The voluntary carbon market broadly divides into two categories: avoidance/reduction credits (preventing emissions that would otherwise occur) and removal credits (actively extracting CO₂ from the atmosphere). Within removals, there is a further hierarchy based on durability:
- Nature-based removals (low durability): Afforestation, reforestation, and improved forest management credits offer storage measured in decades, subject to reversal through fire, disease, drought, or land-use change. Permanence buffers of 10–40% are typical, and even then, reversal events have caused significant credit invalidations.
- Biochar (medium-high durability): With mean residence times of 500–5,000 years depending on soil type and climate, and with conservative permanence discounts applied at issuance, biochar offers materially superior durability compared to biological sinks. It is not reversible through natural disturbance once applied to soil.
- Direct Air Capture with geological storage (highest durability): DAC+CCS offers effectively permanent storage (10,000+ years) but currently costs $300–$1,000 per tonne and operates at limited scale. Stripe, Shopify, and Microsoft have purchased DAC credits at these prices to signal long-term commitment, but most corporate buyers cannot absorb this cost at volume.
Biochar occupies a strategically important middle position: more durable and scientifically defensible than nature-based credits, and significantly cheaper than DAC. This positioning is driving its adoption as a core portfolio asset for sophisticated buyers building CDR portfolios in line with SBTi’s Corporate Net-Zero Standard, which explicitly distinguishes between neutralisation (requiring durable CDR) and mitigation.
Pricing, Market Size, and Demand Trajectory
Biochar carbon credits currently trade at $100–$350 per tonne CO₂e on voluntary markets, depending on feedstock, geography, co-benefit certification, and buyer demand. This represents a significant premium over nature-based avoidance credits (which have traded as low as $3–$15/tonne in the post-2023 downturn) and reflects both the genuine cost of production and the growing recognition that quality removal credits command quality pricing.
Market intelligence from BloombergNEF and Ecosystem Marketplace indicates that CDR credit transactions grew by over 40% in volume in 2023 even as the broader voluntary carbon market contracted. Biochar accounted for approximately 15% of all CDR credit issuances by volume in 2023, behind only afforestation/reforestation but ahead of enhanced weathering and DAC.
On the supply side, global biochar production capacity is scaling rapidly. The International Biochar Initiative estimates that installed capacity could reach 2 million tonnes of CO₂e per year by 2025, up from approximately 300,000 tonnes in 2022. Europe leads in project development, with major producers including Carbon Cycle (Denmark), Novamont (Italy), and Carbo Culture (Finland/US). India is emerging as a significant production market, given its vast agricultural residue base — estimated at over 500 million tonnes per year — currently largely burned in the field, releasing carbon and particulate pollution simultaneously.
On the demand side, corporate commitments are the primary driver. Companies with 2030 or 2040 net-zero targets under SBTi’s Corporate Net-Zero Standard are required to neutralise residual emissions using CDR. For a mid-sized manufacturer with 50,000 tonnes of hard-to-abate residual emissions, a biochar credit portfolio at $150/tonne represents a $7.5 million annual investment — material, but manageable relative to the reputational and regulatory risk of unaddressed scope 3 emissions under CSRD and BRSR disclosure requirements.
Regulatory Tailwinds: CSRD, BRSR, and the EU Carbon Removal Certification Framework
Biochar carbon credits are not currently recognised under compliance markets such as the EU ETS or the UK ETS. They operate exclusively in voluntary markets. However, three regulatory developments are meaningfully increasing their strategic value:
- CSRD (Corporate Sustainability Reporting Directive): From 2024, large EU companies must disclose not just their emissions but their plans to address them, under the European Sustainability Reporting Standards (ESRS). ESRS E1 specifically requires disclosure of CDR activities and the quality of offsets used. Auditors are increasingly scrutinising the permanence and additionality of credits disclosed under CSRD. Biochar’s verifiable permanence makes it more defensible in audit.
- EU Carbon Removal Certification Framework (CRCF): Adopted by the European Parliament in 2024, the CRCF establishes the first EU-level quality framework for carbon removals, covering biochar explicitly. While not creating a compliance market for biochar, it establishes quality benchmarks that are likely to become the de facto standard for voluntary market claims made by EU-regulated entities.
- BRSR (Business Responsibility and Sustainability Reporting): SEBI’s BRSR framework, mandatory for India’s top 1,000 listed companies from FY2023-24, requires disclosure of greenhouse gas emissions and sustainability initiatives. As BRSR Core evolves — with its emphasis on assured disclosures — Indian corporates with net-zero ambitions are beginning to evaluate high-quality CDR credits including biochar as part of their decarbonisation strategy.
The convergence of these regulatory pressures with voluntary market quality standards is creating a structurally favourable environment for biochar credits — particularly for buyers who want removal claims that will survive regulatory scrutiny in 2027 and beyond.
Due Diligence: What to Look For When Buying Biochar Credits
Not all biochar credits are equal. Buyers conducting due diligence should evaluate the following dimensions:
- Methodology and registry: Prefer credits issued under Puro.earth, Verra VM0044, or Gold Standard. These have the most rigorous third-party verification requirements.
- H/C ratio and stability class: Request the laboratory data. An H/Corg ratio below 0.5 indicates high stability (Class 1 under EBC). Ratios above 0.7 indicate material risk of carbon release over decadal timescales.
- Feedstock provenance: Avoid credits from projects using feedstocks with uncertain supply chains. Agricultural residues (rice husks, sugarcane bagasse, wheat straw) and forestry residues (sawdust, bark) from certified sources are preferred.
- Additionality documentation: The project must demonstrate that biochar production would not have occurred without carbon finance. Projects in regions where biochar has existing commercial markets (e.g., as a soil amendment sold at commodity prices) face additionality challenges.
- Co-benefits verification: Some projects carry additional certifications for soil health, smallholder farmer benefits, or biodiversity. These can support broader sustainability reporting under CSRD and BRSR but should not substitute for rigorous carbon accounting.
The Role of Technology in Biochar Credit Integrity
The integrity challenge in biochar markets — as in all carbon markets — is data. How do you know the biochar was produced as claimed? How do you track where it was applied? How do you verify that the permanence assumptions used in credit issuance match on-the-ground reality?
This is where AI-native monitoring and reporting platforms are beginning to play a material role. Continuous IoT sensor data from pyrolysis units, satellite-verified application coordinates, blockchain-anchored chain-of-custody records, and automated LCA calculations are converging to create a new standard of transparency. For corporate buyers disclosing under CSRD or BRSR, the ability to pull auditable, granular data on the biochar credits they have retired — feedstock source, production parameters, application location, verification body — is no longer a nice-to-have. It is becoming a disclosure requirement.
At Goenvi Technologies, we are building the infrastructure layer that makes this level of carbon intelligence possible — not just for biochar, but across the full spectrum of a company’s emissions inventory and offset portfolio. Our platform connects raw operational data to verified credit registries, generating audit-ready sustainability reports aligned with CSRD, BRSR, and SBTi requirements.
Conclusion: Biochar Is Not a Trend. It Is Infrastructure.
The carbon market’s credibility crisis created a brutal but necessary selection pressure. Credits that could not withstand scientific scrutiny are being abandoned. Credits that can — biochar chief among them — are attracting long-term, strategic buyers who understand that the cost of a low-quality offset claim, when it unravels under CSRD audit or media investigation, vastly exceeds the cost of doing it right the first time.
Biochar carbon credits, issued under rigorous methodologies, verified by independent auditors, and tracked through transparent digital infrastructure, represent one of the most defensible tools available to companies with genuine net-zero commitments. They are not cheap. They should not be. The permanence they provide — measured in centuries, not decades — is precisely what the climate requires and what regulators are increasingly demanding.
The market is early. The science is solid. The regulatory direction is clear. The question for procurement, sustainability, and finance teams is not whether to engage with biochar credits — it is how to engage with integrity, rigour, and strategic foresight.
Ready to build a carbon credit portfolio that survives regulatory scrutiny? Speak to the Goenvi Technologies team about how our AI-native platform can help you source, track, verify, and report on biochar and other CDR credits — aligned with CSRD, BRSR, and SBTi requirements. Book a demonstration at goenvitechnologies.com.
