Showing a 91 percent compound annual growth rate (CAGR) from 2021 to 2023, the International Biochar Initiative (IBI) and the US Biochar Initiative (USBI) have announced the release of the 2023 Global Biochar Market Report.
This study, the first industry-produced, global research since 2015, highlights significant strides and potential of biochar as a carbon dioxide removal (CDR) technology, underscoring its increasing role as a climate change solution.
Biochar, a stable form of carbon derived from organic materials, such as agricultural crop residues and forestry trimmings, has emerged as a leading technology in delivering durable CDR, boasting a potential removal of up to 6 percent of global emissions annually.
Biochar is a system, and this market research confirms the interconnectedness of market demand, carbon credits, physical biochar benefits, and uses. This research also shows the many scales in which biochar is produced, from massive industrial plants that also produce clean energy, to smaller kilns that are helping farmers utilize crop residues and shift from crop burning. The report highlights the adaptability of biochar systems in addressing various climate change challenges, encompassing carbon removal among others, affirmed Lucia Brusegan, Chair of IBI Board of Directors.
In 2023, biochar carbon removal represented over 90 percent of delivered carbon credits according to CDR.fyi.
With a current production rate of at least 350,000 tonnes annually, the biochar industry is on a steep growth trajectory with a clear path to delivering a gigaton of biochar carbon removal by 2040.
This rapid expansion is matched by strong industry optimism, projecting revenues to soar to nearly US$3.3 billion by 2025, from US$600 million in 2023.
The report identifies key challenges and areas for future research, such as enhancing participation in voluntary carbon markets and overcoming obstacles to scaling high-quality markets for physical biochar.
It also emphasizes the diversity of production technologies and business models within the industry, advocating for a more inclusive approach that accommodates various scales of operation and supports production around the world.
Stressing the importance of industry organizations in supporting growth through market demand generation, policy advocacy, and access to funding, the report culminates in a call to action for increased engagement from all industry sectors and geographic regions.
The results from this survey highlight the growth in the biochar industry as it emerges as a key CDR technology. At the same time, the survey sends a clear message that developing high-volume, high-value markets for biochar is a key challenge. USBI and IBI are focused on developing these markets, in collaboration with biochar industry partners, to develop robust markets for biochar in industrial and agricultural supply chains where biochar can help meet greenhouse gas (GHG) emissions targets such as Science-Based Targets initiative (SBTi), said report co-author, Myles Gray, Operations Director, USBI.
Key findings from the 2023 Global Biochar Market Report include:
- Production growth: Biochar continues to lead the way in delivering durable CDR with global production of at least 350,000 tonnes of biochar annually, excluding production used in applications where the biochar is consumed releasing the carbon such as in metallurgical processes. This represents a 91 percent CAGR over the reported 2021 production.
- Economic growth: From an economic perspective revenues from biochar producers, distributors, value-added producers, and equipment manufacturers exceeded US$600 million in 2023, with a CAGR of 97 percent between 2021 and 2023. Revenues are projected to grow further to nearly US$3.3 billion by 2025.
- Developing markets: CDR markets for biochar carbon credits are thriving yet the majority of biochar producers do not generate Biochar Carbon Removal (BCR) credits for the Voluntary Carbon Markets (VCM). Markets for physical biochar are growing, but developing high-quality markets for physical biochar is a leading obstacle to further growth in the industry.
- Diversity of technology and scale: TechnoloWithin and between global regions, biochar producers use a wide range of production technologies and business models. Building an industry that works for all scales and models is key.
- Advocacy and standardization: The industry is expecting biochar organizations to focus on developing end-use markets and standards for physical biochar, advocate for biochar in the CDR space and the governmental policy, and support biochar companies to improve access to capital and grants.
