In a recent post for S&P Global, Santiago Canel Soria and Yash Gupta observe that the global 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 carbon credit market demonstrated notable price resilience in October, with prices in the US and India holding steady despite a significant drop in corporate retirement activity and weakening market sentiment in Q4.

Platts assessed the price of US biochar for 2025 delivery at $150/mtCO2e, remaining stable month-over-month. However, this stability masks a sharp slowdown in activity. Overall, tech-based carbon removal retirements plummeted to just 3,327 mt in October from 57,417 mt in September. Within this reduced volume, biochar was the dominant segment, accounting for 74% (2,216 mt) of all tech-based retirements.

Market dynamics suggest prices are being supported by tight supply rather than high spot demand. Developers noted more activity in Q3 than Q4, and sources confirm it is challenging to secure credits for prompt delivery.

This scarcity is clearly reflected in the Indian market. Platts assessed Biochar India Current Year at $135/mtCO2e, while credits for next year’s delivery (Yr 01) were $10 lower at $125/mtCO2e. This backwardation (where current prices are higher than future prices) indicates a dearth of supply for immediate transactions. While new projects are in validation, most supply is allocated via forward delivery agreements.

To navigate this landscape, market intermediaries are diversifying the customer base. Recognizing that biochar is the most available and trusted CDR pathway, new offerings (such as one from Wild Assets at $158/mtCO2e) are targeting individuals and smaller-scale corporate buyers, reducing reliance on large offtakes.

Key Takeaways for the Industry

• Supply Scarcity Supports Price. Current price stability is largely a function of supply constraints, not high immediate retirement volumes. The difficulty in sourcing credits for prompt delivery is supporting prices, even as overall corporate activity slows.
• Market Diversification is Crucial. The industry is actively working to expand its customer base beyond traditional large corporate buyers. Targeting smaller companies and even individuals is seen as a necessary step to build a more resilient and broader demand base.
• Certification Matures. A price distinction between certification standards is emerging. Credits certified by newer or less-known bodies (like CSI) may trade at a discount ($150/mtCO2e) compared to more established registries like Puro.earth ($158/mtCO2e) or offers for Isometric-certified credits ($170/mtCO2e).
• Scaling Requires Compliance Integration. Market participants agree that for the biochar market to scale significantly, the voluntary market must eventually integrate with compliance markets, such as emission trading systems (ETS) and government procurement programs.