Biochar Market

Market Overview

The global biochar market size was valued at USD 208.0 million in 2023 and is projected to reach USD 600.4 million by 2032, registering a CAGR of 12.5% during the forecast period (2024-2032). The ability of biochar to improve soil fertility and plant growth is expected to be a major driver of biochar market growth.

Biochar is a carbon-rich material produced by Pyrolysis, which involves heating biomass without oxygen. This process converts organic materials like wood chips, agricultural residues, and organic waste into a stable carbon source that can improve soil health, sequester carbon, and increase agricultural productivity. Factors such as population growth, expansion of the manufacturing industry, urbanization, and regulatory requirements have all contributed to significant growth in the water treatment sector. Further, the growing scarcity of potable water has increased the need for water treatment activities.

Furthermore, the rise in the prevalence of water-borne diseases such as cholera, diarrhea, typhoid, amebiasis, hepatitis, gastroenteritis, giardiasis, campylobacteriosis, scabies, and worm infections has fueled water treatment activities, with biochar serving as an adsorbent to remove various pollutants from water and wastewater. Furthermore, biochar is widely used in water and wastewater treatment because of its unique properties, including adsorption capacity, specific surface area, microporosity, and ion exchange capacity. This factor may increase demand for biochar in the growing water treatment sector, thereby driving market growth.

However, biochar has several disadvantages, including land loss due to erosion, soil compaction during biochar application, reduced worm life rate, and reduced pesticide efficacy. These factors are expected to slow market growth.

Highlights

• Pyrolysis accounts for the largest market share in terms of technology.
• Farming is the major application in the market.

Market Dynamics

Global Biochar Market Drivers:

Government Policies and Regulation

Many governments worldwide are enacting policies and regulations to encourage using biochar as a soil amendment and carbon sequestration strategy. To promote the use of biochar in agricultural practices, farmers and landowners are offered incentives such as subsidies, tax credits, and grants. Furthermore, carbon offset programs and emissions trading schemes provide economic incentives for businesses to invest in biochar production and use as part of their sustainability efforts.

In addition, the US government has several programs that promote biochar, including the BioPreferred Program, the Conservation Stewardship Program, and the Conservation Innovation Grants. The BioPreferred Program encourages the purchase of biobased products, such as biochar and composted products. The Conservation Stewardship Program assists farmers and agricultural producers in implementing new conservation practices, such as producing biochar. The Conservation Innovation Grants program promotes the development of new natural resource conservation methods. In 2023, the US government introduced the Biochar Research Network Act, which amends the Agricultural Research, Extension, and Education Reform Act of 1998 to require the Secretary of Agriculture to establish a national biochar research network.

Similarly, in December 2023, the Indian government formed the 14th Task Force on Biochar Implementation to recognize biochar's role in lowering carbon emissions in the steel industry. Biochar may also solve global food, energy, and environmental issues. PepsiCo India, for example, is running a pilot program in Punjab to combat stubble burning by producing biochar fertilizer via Pyrolysis in retort kilns.

Global Biochar Market Restraints:

High Initial Investment

One of the primary barriers to biochar adoption is the significant initial investment required for biochar production facilities and equipment. Establishing pyrolysis plants or biochar production units requires substantial capital investment, which may deter potential investors and limit the scalability of biochar projects, particularly in areas with limited financial resources or uncertain market demand. The cost of producing biochar can range from USD 0.67/kg to USD 17.80/kg, depending on the feedstock and production conditions. The average price for most producers is around USD 400 per ton, but these figures are highly variable and rapidly decreasing. According to some studies, biochar can cost USD 90 per ton in the Philippines and USD 8,850 per ton in the UK.

A study published in the journal "Biomass and Bioenergy" assessed the economic feasibility of producing biochar using various biomass feedstocks and pyrolysis technologies. The study discovered that capital costs comprised a significant portion of total production costs, ranging from 30% to 70%, depending on the size and complexity of the biochar production system. High capital intensity and long payback periods can deter potential investors and limit the scalability of biochar projects, especially in areas with limited financing or government support.

Furthermore, according to a survey conducted by the International Biochar Initiative (IBI), access to finance and funding is one of the most significant challenges faced by biochar producers and entrepreneurs worldwide. Limited access to capital, high investment risks, and uncertain market demand were tremendous impediments to increasing biochar production and commercialization. To overcome these financial constraints, innovative financing mechanisms, public-private partnerships, and supportive government policies are needed to encourage investment in biochar production infrastructure and technology development.

Global Biochar Market Opportunity:

Sustainable Agriculture

Biochar can improve soil health, increase crop productivity, and reduce the environmental impacts of conventional farming practices. As consumers and policymakers prioritize sustainable agriculture, biochar is gaining popularity as a natural soil amendment that can improve soil fertility, water retention, and nutrient cycling while decreasing reliance on synthetic fertilizers and agrochemicals. The opportunity is to educate farmers about the benefits of biochar, conduct field trials to demonstrate its efficacy, and incorporate biochar into regenerative farming systems to improve soil health and resilience.

Additionally, the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) has launched a groundbreaking study on biochar production in response to rising global concerns about climate change and sustainable agriculture. India, a central agricultural hub, generates over 500 million tons of agricultural residues each year, with a quarter of it burned, posing health and environmental risks. Converting these residues into biochar is a sustainable alternative that provides farmers with waste management solutions and potential revenue streams.

According to Project Drawdown, widespread use of this material as a soil amendment could reduce global emissions by 1.3 to 3 gigatons of CO2 equivalent per year by 2050, which is marginally more significant than the potential impact of increasing ocean power and marginally less than a 20-fold increase in the number of hybrid vehicles on the road. The National Institute of Livestock and Grassland Science estimates that using biochar in animal feed could reduce greenhouse gas emissions from cattle by up to 20%. Furthermore, once incorporated into soil, it can remain stable for hundreds, if not thousands, of years, effectively removing carbon from the atmosphere.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global biochar market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global biochar market shareholder and is estimated to grow at a CAGR of 12.6% over the forecast period. Asia-Pacific had the largest share of the global market. The region's potential for soil improvement and carbon sequestration is the main driving force behind this sector. Furthermore, the region's rapid economic and agricultural development has contributed to market growth. China is the largest producer of such char in the Asia Pacific. The area focuses on crop residue disposal, soil pollution, quality degradation, slash-and-burn, and greenhouse gas emissions. As a result, incorporating agricultural waste into this product and its use as a soil conditioner in farmland are driving growth in this region to address these issues.

In addition, the biochar market in India is expanding rapidly as the thermal chemical process becomes a more cost-effective method for converting crop residue into biochar. It also facilitates the effective disposal and management of agroforestry residue. Biochar can help improve soil physical properties like drainage, water holding capacity, porosity, and bulk density. Furthermore, the agricultural industry in India is seeing an increase in demand for improved soil health through the effective use of crop residues as a source of soil nutrients.

Furthermore, according to Nature Communication, widespread use of zero-emission technologies (NETs) is required to achieve CO2 reduction and renewable energy goals to meet the Paris Agreement's cost-effective goal of limiting global temperature rise to 2°C or 1.5°C. Reductions in total GHG emissions could reach 8620 MtCO2eq by 2050 if a "moderate" scenario calls for charcoal processing 73% of crop residues with BIPP in the short term (2020-2030) and then coordinating deployment with BECCS after 2030.

North America is anticipated to exhibit a CAGR of 12.8% over the forecast period. North America is the world's second-largest market for char, and it is expected to grow significantly due to rising demand for organic foods and high meat consumption. Many local and large manufacturers operating on a national and global scale have helped to drive the sector's growth. According to USBI, domestic char production among survey participants ranges from 35,000 to 70,000 tons per year.

Furthermore, the United States has generated the most revenue globally due to the product's widespread popularity in the country. Many small and large-scale manufacturers have contributed to the sector's growth. Despite several companies exiting the industry due to a lack of capital and expected growth, overall growth prospects are promising in the coming years.

Similarly, in Canada, Airex Energy Inc., Groupe Rémabec, and SUEZ have worked together to develop CARBONITY. It is Canada's first industrial biochar production plant in Port-Cartier, Quebec (QC). This collaboration between SUEZ and Airex Energy aims to produce 350,000 tonnes of biochar by 2035. Furthermore, Canadian oil and gas company Petrox Resources Corporation (Petrox) has signed a Memorandum of Understanding (MoU) to collaborate with M&L Renewable Energy Group Ltd, a renewable energy project developer. This Memorandum of Understanding aims to establish a biochar facility in Edmonton, Alberta, to expand similar plants throughout Canada.

Europe has a sophisticated and highly competitive agricultural input market and a growing organic sector. The ever-increasing demand for organic food presents potential growth opportunities for the organic farming sector. So, many new producers are entering the market, meeting the voluntary European Biochar Certificate (EBC) standard. Germany is one of the top countries actively pursuing biochar projects. For example, in November 2021, the NovoCarbo Biochar project was launched to convert wood residues from forest operations and waste wood into stable carbon in the form of biochar.

Segmental Analysis

The global biochar market is segmented based on technology and application.

The market is further segmented by technology into Pyrolysis and gasification.

Pyrolysis is expected to dominate the market due to its popularity as a low-cost, convenient technology that can handle a variety of feedstocks. Pyrolysis is a thermal decomposition process without oxygen, converting organic materials into biochar, bio-oil, and syngas. In Pyrolysis, biomass feedstocks such as wood chips, crop residues, or organic waste are heated to high temperatures (typically 300°C to 800°C) in a controlled environment, resulting in the release of volatile gases and the formation of biochar as a solid residue. Pyrolysis produces carbon-rich biochar with a porous structure, making it suitable for soil amendment, carbon sequestration, and other applications. This technology helps to reduce greenhouse gas emissions. This fuels the growth of the Pyrolysis Technology segment over the forecast period.

The gasification segment is expected to grow significantly over the forecast period. Gasification is a thermochemical process that converts biomass into synthesis gas (syngas), primarily hydrogen, carbon monoxide, and methane. Unlike Pyrolysis, gasification occurs at higher temperatures (typically above 800°C) and introduces a controlled amount of oxygen or steam into the reaction chamber to partially oxidize the biomass feedstock. The resulting syngas can generate electricity, heat buildings, or produce chemicals. At the same time, the solid residue, known as biochar, can be recovered and used for soil amendment or other purposes.

Moreover, this technology generates smaller amounts of char in a reaction vessel that is directly heated and exposed to air. This technology's market demand and acceptance are growing as it produces lower air pollutants. However, this method is less efficient than others.

The market can be bifurcated by application into Farming, Livestock, and Power Generation.

The agricultural segment is expected to dominate the market. In agriculture, biochar is primarily used to improve soil health and crop productivity and promote sustainable farming practices. Farmers can improve soil structure, water retention, nutrient availability, and the presence of beneficial soil microorganisms by incorporating biochar into agricultural soils. Biochar-amended soils frequently have lower nutrient leaching, higher crop yields, and greater resilience to environmental stressors like drought and heat.

Additionally, biochar can also help sequester soil carbon, reduce greenhouse gas emissions, and contribute to climate change mitigation efforts. Such charcoal is widely used in agriculture as a fertilizer because it helps increase the natural rates of carbon in the soil while improving soil quality. It also reduces agricultural waste and greenhouse gas emissions from the soil. Farmers worldwide increasingly use such char, which will drive growth in the agriculture segment over the forecast period.

The power generation segment is expected to grow significantly during the forecast period. Biochar has power generation and renewable energy production applications because it can be used as a biomass feedstock in gasification or combustion processes. Gasification converts biomass-derived biochar into synthesis gas (syngas), which contains hydrogen, carbon monoxide, and methane and can be used for power generation, heating, or chemical production.

Similarly, integrated gasification combined cycle (IGCC) systems and biomass-to-energy plants use biochar as a renewable fuel source to generate electricity, heat, or biofuels, thereby replacing fossil fuels and lowering greenhouse gas emissions. By utilizing biochar's energy potential, power generation facilities can help to decarbonize energy systems, promote energy independence, and mitigate the effects of climate change. Governments worldwide have encouraged using coal to generate energy because it reduces carbon emissions from various sectors such as agriculture and forestry.

Recent Developments

• January 2024- Standard Biocarbon secured USD 5 million from Nexus Development Capital, a sustainable infrastructure capital provider, to scale its new biochar production facility, which is set to begin production in the first quarter of 2024 to produce 16,000 cubic yards of biochar and capturing 3,000 tons of carbon per year.
• March 2024- Phoenix Energy Technologies introduced ClassifyAI™, a groundbreaking data integration solution that transforms commercial IoT across multiple sites.