Carbon Markets & Biochar: How Climate-Positive Projects Create New Revenue Streams

Written By: Jagriti Shahi 

As climate commitments tighten globally, carbon markets are moving from a niche financial instrument to a mainstream revenue opportunity. Among the most promising climate-positive solutions is biochar—a carbon-negative material that not only improves soil health but also enables long-term carbon sequestration. When integrated with verified carbon markets, biochar projects can unlock new, recurring income streams for agri-businesses, waste processors, and sustainability-driven enterprises.

This article explains how carbon markets work, why biochar is uniquely positioned, and how projects can monetize climate impact.

1. Understanding Carbon Markets: A Quick Primer

Carbon markets allow organizations to buy and sell carbon credits, where each credit typically represents 1 metric ton of CO₂ equivalent (tCO₂e) reduced or removed from the atmosphere.

Two Major Carbon Market Types

Biochar projects mainly participate in voluntary carbon markets, where demand is driven by corporate net-zero and ESG commitments.

2. Why Biochar Is a Carbon-Negative Solution

Biochar is produced by pyrolyzing biomass (such as coconut husk, areca waste, agri residues) in low-oxygen conditions. This process:

• Locks carbon into a stable, solid form

• Prevents biomass from decomposing and releasing CO₂

• Stores carbon in soil for 100–1,000+ years

Carbon Advantage of Biochar

Because of its durability and traceability, biochar is increasingly favored over short-term nature-based offsets.

3. How Biochar Generates Carbon Credits

A biochar project earns carbon credits by proving net carbon removal, calculated as:

Carbon stored in biochar

– Emissions from production & transport

= Net CO₂ removed

Typical Credit Generation Flow

1. Feedstock sourcing (agri waste, husk, shells)

2. Pyrolysis process (measured emissions)

3. Biochar application or sale

4. Verification under an approved methodology

5. Issuance of carbon credits

6. Sale to buyers on VCM platforms

4. Biochar Methodologies Accepted in Carbon Markets

Several globally recognized standards now support biochar-based carbon removal:

Biochar credits often trade as carbon removal credits, which command premium pricing compared to avoidance credits.

5. Revenue Streams from Biochar-Based Climate Projects

Biochar creates multiple monetization layers, not just carbon credits.

1. Carbon Credit Sales

• Credits sold to corporates, climate funds, or marketplaces

• Long-term contracts possible (5–10 years)

2. Biochar Product Sales

• Soil amendment for agriculture

• Input for compost, fertilizer blends

• Use in construction, water filtration

3. Waste Management Fees

• Biomass waste diversion contracts

• Circular economy integration

4. ESG & Impact Premiums

• Attract impact investors

• Better financing terms

• Higher valuation for sustainable ventures

6. Indicative Economics of a Biochar Project

Key Insight: Carbon revenue often makes the difference between a marginal and a bankable biochar project.

7. Why Corporates Are Buying Biochar Credits

Corporate buyers increasingly prefer biochar credits because:

• They represent true carbon removal, not just avoidance

• Lower reputational risk (less “greenwashing” concern)

• Align with Science Based Targets (SBTi) guidance

• Offer measurable co-benefits in agriculture and rural livelihoods

Sectors actively purchasing removal credits include:

• FMCG & food brands

• Tech companies

• Apparel & retail

• Energy and logistics firms

8. Challenges to Address Before Monetization

While promising, biochar carbon projects must manage:

9. Strategic Opportunity for Agri & Waste-Based Enterprises

For agri-enterprises, FPOs, and biomass-rich regions, biochar bridges climate action and commercial viability:

• Converts waste into assets

• Creates rural climate income

• Improves long-term soil productivity

• Integrates seamlessly with regenerative agriculture

When paired with carbon markets, biochar is no longer just a soil input—it becomes a financial instrument.

Conclusion: From Climate Cost to Climate Revenue

Carbon markets are transforming how climate action is funded. Biochar sits at the intersection of agriculture, waste management, and carbon finance, offering one of the most credible pathways to long-term carbon removal.

For organizations willing to invest in robust measurement and verification, biochar-based carbon projects can unlock stable, scalable, and future-proof revenue streams—turning climate responsibility into a competitive advantage.

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