The rise of biochar: Why Microsoft, Mitsubishi and others see its promise for carbon removal

As measured by tons delivered to buyers, which carbon dioxide removal (CDR) solution has proved most popular to date? If media headlines guide your thinking, you might choose direct air capture. But the answer is actually a technology that’s much older and cheaper. It’s also one that’s having a great year, based on Trellis’ reporting on companies.

Humans are thought to have converted waste biomass to biochar, a carbon-rich substance used as fertilizer, for thousands of years. Because carbon can stay locked in biochar for up to thousands of years, the process has more recently attracted interest as means for durable carbon removal. Eleven of the top 12 spots on the deliveries leaderboard maintained by CDR.fyi, a website that tracks carbon removal data, are occupied by biochar producers.

In first position is Exomad Green, a company that produces biochar from sustainable forestry residues at two facilities in Bolivia. Exomad has delivered 83,000 tons and inked deals for a total of almost 320,000 tons with buyers that include Swiss Re and Microsoft. The company’s most recent purchase, announced this week, is a 10,000-ton deal with NextGen CDR, an advanced market facility that specializes in high-durability CDR. The facility is a joint venture between South Pole, a carbon asset developer and climate consultancy, and Mitsubishi Corporation.

Exomad’s busy year is telling: CDR.fyi data shows that of the 32 deals Exomad has completed for more than 1,000 credits, 23 were signed in 2024. Some other big biochar sellers, including Aperam BioEnergia, which operates in Brazil, and Dutch Carboneers, which partners with farmers across the global south, show a similar pattern of sales.

Biochar benefits go beyond costs

It’s fitting that a South American company is leading the way, because some of the earliest evidence for biochar use comes from studies of Amazonian soils. The additive is produced by heating crop residues and other biomass in a low-oxygen environment. Once mixed with soil, it boosts fertility and water retention. Because the carbon in the biochar is pulled from the atmosphere by the plants from which it’s made, the process is carbon-negative. Worldwide, biochar production could draw down 2.6 billion tons of CO2e annually, according to the Intergovernmental Panel on Climate Change (IPCC). If dead wood from forests is used as an input, biochar production can also help pay for wildfire prevention.

Production is often cheap, at least when compared to newer technologies such as direct air capture (DAC). The deal between Exomad and NextGen CDR prices the removals at $200 per ton, and the IPCC estimates that a billion tons of biochar CDR can be produced at $100 per ton. DAC credits have historically cost closer to $1,000 per ton, although industry leaders predict that the price will fall below $500 by 2030.

Despite the low price and co-benefits, CDR.fyi data shows that biochar projects attracted just $74m in investment in 2023, around half the figure for DAC. That may in part be due to concerns about the fate of the carbon in biochar. Many organizations, including CDR.fyi, classify biochar as a “durable” removal method, but there’s no fixed definition for what that means. 

Microsoft is on board

The ultimate test of durability — observing biochar for hundreds of years in many environments — isn’t one we can wait to carry out. In the meantime, the debate rests on proxy measurements and shorter-term experiments. Studies of ancient soils suggest that in some cases biochar can indeed store carbon for thousands of years. In a paper published this month, researchers describe how biochar was added to a vineyard in Italy in 2009 and unearthed this year. The results, said the team, confirm the “permanent nature” of carbon storage in biochar, at least in that particular ecosystem and over that time frame.

These and other results, together with the backing of Microsoft, known for the rigor of the due diligence it performs before purchasing carbon credits, look set to drive the continued growth of the biochar market. Longer-term, note the IPCC and others, competition for biomass may hamper growth. Current biochar inputs, such as residues from timber mills, can also be burned to power electricity generation, which, if the resulting emissions are captured, can be a carbon-negative process. Known as bioenergy with carbon capture and storage, the double-win technology — electricity generation with carbon removal — plays a significant role in some net-zero scenarios and could be considered a higher priority than biochar production.

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