The voluntary carbon market is currently driving investment in novel carbon dioxide removal technologies as countries and corporations seek to meet global net-zero emissions targets. Biochar has emerged as a frontrunner among these engineered solutions, utilizing plant biomassBiomass is a complex biological organic or non-organic solid product derived from living or recently living organism and available naturally. Various types of wastes such as animal manure, waste paper, sludge and many industrial wastes are also treated as biomass because like natural biomass these More and pyrolysisPyrolysis is a thermochemical process that converts waste biomass into bio-char, bio-oil, and pyro-gas. It offers significant advantages in waste valorization, turning low-value materials into economically valuable resources. Its versatility allows for tailored products based on operational conditions, presenting itself as a cost-effective and efficient More to trap carbon for long-term storage. Beyond simply locking away carbon dioxide, biochar projects frequently generate broader sustainable development co-benefits, particularly when the material is applied to agricultural soils. To understand how the market responds to these additional contributions, a team of researchers analyzed transaction data up to the year 2024. Their work represents a critical step in quantifying how non-carbon attributes shape pricing dynamics within this nascent market space.

Publishing their findings in the journal Communications Sustainability, authors Medilė Jokubė, Matti Hyyrynen, Sampo Pihlainen, and Kari Hyytiäinen utilized a hedonic pricing model to evaluate 171 individual transactions. The core discovery of the investigation is that participants in the voluntary carbon market actively value the sustainable development co-benefits advertised with biochar credits. According to the empirical results, a distinct price elasticity exists, demonstrating that credit prices climb by 0.143% for every 1% increase in the number of sustainable development goal claims. For instance, a carbon credit linked to three sustainable development goals is approximately 6% more expensive than a credit carrying only two claims, translating to an average price premium of over ten dollars per ton of carbon dioxide equivalent.

Crucially, the study reveals that credit buyers do not treat all sustainable development goals equally, showing a strong variation in preferences across different pillars of sustainability. Economic claims, which focus on areas like decent work, economic growth, and responsible production, generate the highest financial premium, leading to a 23.9% price increase per additional claim. Social claims related to poverty reduction, food security, and human well-being also secure a price premium, though at a lower statistical confidence level. Conversely, an increase in environmental claims is associated with a 6.2% price discount per claim. The researchers suggest that environmental benefits are viewed as a baseline expectation for carbon removal projects, meaning that adding extra environmental tags fails to provide distinguishing value to market buyers.

Geographic origin also plays a powerful role in determining transaction value within the global marketplace. The analysis demonstrates that biochar carbon credits produced by developers based in Europe are the most expensive, commanding a substantial premium over projects located elsewhere. Credits from Africa and North America follow as the next most valued, while credits originating from Asian nations are the least expensive. This regional pricing discrepancy, combined with an observed price discount for projects based in developing countries, suggests that buyers place a high premium on European institutional quality, regulatory transparency, and monitoring standards. This preference highlights a market tension, as buyers favor highly regulated settings over projects that could support sustainable development in the Global South.

Interestingly, the specific production technology employed to generate biochar does not serve as a significant signal for market pricing. Industrial systems operate with closed emissions controls and offer superior carbon permanence and feedstockFeedstock refers to the raw organic material used to produce biochar. This can include a wide range of materials, such as wood chips, agricultural residues, and animal manure. More efficiency compared to low-technology artisanal methods. Despite these environmental advantages, the market does not penalize artisanal credits, which accounted for nearly half of the available credits in the dataset. Because production type does not dictate price, lower-cost artisanal projects that often claim a high number of community co-benefits can maintain a market advantage over industrial alternatives. This dynamic underscores the urgent need for robust independent auditing, as the financial incentive to stack unverified sustainable development claims could lead to claim inflation and threaten market integrity.

Source: Jokubė, M., Hyyrynen, M., Pihlainen, S., & Hyytiäinen, K. (2026). Biochar co-benefits are valued in the voluntary carbon market. Communications Sustainability, 1(90), 1-9.