The market for 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, a carbon-rich material created from 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, offers a compelling economic opportunity, especially when liquid biofuel prices are low. Despite its potential for carbon sequestration and agricultural benefits, the biochar market has been hampered by significant price volatility. This variability stems from diverse biochar properties and its wide range of applications, including agriculture, forestry, and environmental remediation. This price uncertainty poses a key barrier to broader market adoption. To address this challenge, J.R. Trapero, A. Alcazar-Ruiz, F. Dorado, and L. Sanchez-Silva, from the Department of Chemical Engineering at the University of Castilla-La Mancha, recently published their findings in the Journal of Environmental Management, introducing a novel methodology for forecasting biochar prices to enhance market stability and economic viability.

Currently, techno-economic assessments (TEAs) for biochar projects often rely on subjective price estimations and fixed percentage variations for sensitivity analyses, which can lead to unreliable results. Unlike other raw materials, a publicly available biochar price database is lacking, making it difficult to validate TEA simulations and limiting market transparency. To overcome this, the researchers compiled and analyzed a novel dataset of biochar prices from 2013 to 2021. They noted a substantial decline in market prices from $2740/t in 2013 to an approximate range of $600-$1300/t in 2021. The data, although limited, revealed a negative trend in prices, with the steepest decline occurring in the earlier years of the series.

To address missing data points for 2016 and 2020 in their dataset, the study employed a quadratic regression model for interpolation, which demonstrated a higher adjusted R-squared value of 0.91 compared to a linear fit. This interpolated data, along with the actual prices, formed the basis for their forecasting models. The core of their methodology lies in applying exponential smoothing (ETS) models, specifically ETS(A,A,N) and ETS(A,Ad,N), to predict future biochar prices over a 15-year horizon. The ETS(A,Ad,N) model, which incorporates a damped additive trend, was identified as the most suitable choice, achieving a significantly higher adjusted R-squared of 0.99. This model predicts that future biochar prices will stabilize around $1400/t with a slight negative trend. This is particularly relevant given the increasing biochar production, which is not expected to lead to price increases.

Beyond point forecasts, the study emphasizes the importance of providing probabilistic forecasts, which measure price volatility and uncertainty. They combined theoretical and empirical approaches to generate prediction intervals (PIs), which visualize the range of possible future prices. While the theoretical PI showed an increasing width with the forecasting horizon, even suggesting unrealistic negative prices in the long term, the empirical PI remained constant, underestimating future price variability. By combining these two approaches using an arithmetic average, the study offers a more robust and objective measure of price uncertainty. This combined method shows that for an 80% confidence level, the biochar price could vary approximately by plus or minus $1000/t.

This new methodology marks a crucial step toward systematic biochar price forecasting. By providing a reproducible method for price estimation that accounts for temporal correlations and offers objective measures of uncertainty, this research significantly contributes to market stabilization efforts and supports the wider adoption of biochar in sustainable industries. The authors acknowledge the limitation of a small dataset and hope future research will expand it, potentially incorporating exogenous variables like biochar production volume, GDP, inflation, or the pricing dynamics of value-added biochar applications.

Source: Trapero, J. R., Alcazar-Ruiz, A., Dorado, F., & Sanchez-Silva, L. (2025). Biochar price forecasting: A novel methodology for enhancing market stability and economic viability. Journal of Environmental Management, 377, 124681.