The latest report from Supercritical highlights a critical shift in the carbon removal market: 62% of high-quality biocharBiochar is a carbon-rich material created from biomass decomposition in low-oxygen conditions. It has important applications in environmental remediation, soil improvement, agriculture, carbon sequestration, energy storage, and sustainable materials, promoting efficiency and reducing waste in various contexts while addressing climate change challenges. More capacity for 2025 is already secured, with 28% locked in through 2026. As demand for carbon removal surges, companies without long-term offtake agreements risk supply shortages and rising costs.

Biochar is now the preferred choice for 80% of CDR buyers, yet production remains limited. Each biochar site can typically only produce around 100,000 tonnes per year, creating a constrained market where high-quality supply is increasingly difficult to secure. Supercritical’s analysis also shows that biochar prices have risen at a compound annual growth rate of 29.2% over the past four years. This trend will likely continue as corporate net-zero commitments drive further demand.

The report makes one thing clear: relying on spot purchases is becoming a costly risk. Companies that secured offtake agreements in 2022 saved up to 25% compared to those buying on the open market. Without long-term contracts, late entrants will face volatile pricing and limited availability.

For supercritical, their findings reinforce that offtakes are not just about securing carbon credits—they are about ensuring financial and operational stability in a rapidly evolving market. As more companies enter the space, the window to secure high-quality supply at favorable prices is closing. Those waiting for market maturity may find themselves left behind.

Our take? Strong evidence Carbon market volatility should reinforce the need for Biochar businesses to develop business models that do not involve rely on carbon credits. The latter should only ever be considered a potential incremental benefit to a core business focused on biochar as an end product with still largely untapped commercial applications.