Biochar: The Business Case for Soil Carbon

Biochar has moved from academic curiosity to practical soil amendment over the past decade. For agricultural operations evaluating regenerative practices, it presents an interesting proposition—a soil amendment that simultaneously improves productivity and locks carbon into a stable, long-lasting form. But it's not for every operation, and the economics depend heavily on local conditions.

This is a practical assessment. No hype, no overselling—just what you need to know to decide whether biochar belongs in your operation.

What Biochar Actually Is

Biochar is charcoal produced through pyrolysis—heating organic material (biomass) in the absence of oxygen. The process drives off volatile gases and leaves behind a stable, carbon-rich solid with a highly porous structure. That porosity is what makes biochar useful as a soil amendment rather than just fuel.

The concept isn't new. In the Amazon basin, indigenous peoples created “terra preta”—dark, extraordinarily fertile soils—by incorporating charcoal into the ground thousands of years ago. Those soils remain fertile today, which tells you something important about biochar's durability. Carbon in biochar form persists for hundreds to thousands of years, far longer than most other forms of soil carbon.

Feedstocks vary widely: wood chips, crop residues, straw, prunings, nut shells, even manure. The feedstock and pyrolysis temperature affect the biochar's properties—pH, nutrient content, porosity, and surface area all differ depending on how and from what the biochar was made. This matters because not all biochar performs the same in all soils.

What Biochar Does for Soil

Biochar's benefits come primarily from its physical structure—millions of tiny pores that create surface area, hold water, and provide habitat for soil microorganisms. The effects are real, but they vary significantly by soil type and biochar feedstock.

Water holding capacity: This is where biochar shows its most dramatic impact, particularly in sandy soils. Studies consistently show 20–30% improvement in water retention for sandy and sandy loam soils. For operations dealing with drought stress or high irrigation costs, this alone can justify the investment.

Nutrient retention: Biochar's cation exchange capacity helps soil hold onto nutrients that would otherwise leach away with rainfall or irrigation. This means less fertilizer loss, more efficient nutrient cycling, and reduced contamination of waterways. The effect is most pronounced in light, free-draining soils where nutrient leaching is a persistent problem.

Soil biology: The porous structure of biochar provides protected habitat for beneficial soil microorganisms—bacteria, fungi, and other organisms that drive nutrient cycling and plant health. Think of it as building housing for your soil's workforce. Mycorrhizal fungi colonisation tends to increase in biochar-amended soils, improving plants' access to phosphorus and micronutrients.

pH adjustment: Most biochar is alkaline, making it useful for raising pH in acidic soils. If your soil already has a neutral or high pH, this effect becomes a limitation rather than a benefit.

Soil structure: Over time, biochar improves soil aggregation and reduces compaction. Better structure means better root penetration, improved drainage, and easier field operations.

The Carbon Sequestration Angle

Here is where biochar stands apart from other soil carbon strategies. Most approaches to building soil organic carbon—cover crops, compost, reduced tillage—add carbon in forms that decompose over years or decades. Biochar locks carbon into a form that resists decomposition for centuries.

The numbers are significant: one tonne of biochar sequesters roughly 2.5–3 tonnes of CO2 equivalent. This accounts for the carbon fixed in the biochar itself plus avoided emissions from the biomass that would otherwise have decomposed and released CO2 and methane.

This durability makes biochar particularly relevant for carbon credit programmes. Verification bodies and buyers increasingly recognise biochar as one of the highest-quality forms of carbon removal—it's measurable, durable, and verifiable. As carbon markets mature, this could become a meaningful revenue stream for operations that adopt biochar at scale.

That said, the carbon credit market for biochar is still developing. Prices, verification standards, and buyer demand are all in flux. Factor carbon revenue into your projections as a potential upside, not a guaranteed return.

The Economics

Biochar costs vary enormously depending on whether you purchase it or produce it on-farm. This is the single biggest factor in whether the economics work for your operation.

Purchased biochar: Commercial biochar typically costs between €300 and €800 per tonne, depending on quality, feedstock, and your location relative to producers. At recommended application rates of 5–20 tonnes per hectare (depending on soil type and goals), the per-hectare cost can range from €1,500 to €16,000. That's a significant upfront investment, though it's a one-time amendment that persists for centuries rather than an annual input.

On-farm production: If you have biomass waste—prunings from orchards, hedgerow management, wood chip from forestry, crop residues—on-farm pyrolysis dramatically changes the equation. Purpose-built kilns range from simple designs costing a few hundred euros to more sophisticated units. The feedstock cost drops to the labour of collection, and you're converting a waste management problem into a valuable soil amendment.

The payback calculation depends on four factors:

Soil improvement value: Reduced irrigation costs, improved yields, and better soil workability. Most significant in sandy or degraded soils.
Reduced fertiliser needs: Better nutrient retention means less fertiliser wasted to leaching. Savings of 10–20% on fertiliser inputs are commonly reported.
Carbon credit revenue: Emerging but potentially significant. High-quality biochar carbon credits are among the most valued in voluntary markets.
Yield improvements: Variable by context, but meta-analyses show average yield increases of 10–15% in tropical and degraded soils. Temperate soil responses are more modest and depend heavily on baseline conditions.

For operations that can produce biochar on-farm from waste biomass, payback periods of 2–4 years are realistic. For those purchasing biochar at commercial rates, the payback depends much more on soil type, crop value, and whether carbon credit revenue materialises.

When Biochar Makes Sense—and When It Doesn't

Biochar is not a universal solution. Here's an honest assessment of where it fits and where it doesn't.

Strong case for biochar:

Sandy soils with low water retention: This is where biochar delivers its biggest measurable impact. If you're irrigating sandy ground, biochar can meaningfully reduce water costs.
Acidic soils needing pH correction: Biochar raises pH gradually and persistently, potentially reducing the need for repeated liming.
Operations with woody biomass waste: Orchards, forestry operations, hedgerow management, and agroforestry systems all generate feedstock that can be converted on-farm.
Farms near biochar producers: Transport costs matter. Proximity to a supplier can shift the economics significantly.
High-value crop systems: Horticultural operations, vineyards, and speciality crops can absorb higher amendment costs and capture greater returns from improved soil performance.

Weak case for biochar:

Heavy clay soils: The water retention benefits are marginal because clay already holds water well. Some structural improvements are possible, but the cost-benefit is harder to justify.
Alkaline soils: Since most biochar raises pH further, it can worsen conditions for crops that prefer neutral or slightly acidic soil.
Operations without biomass waste or affordable supply: If you're buying biochar at full commercial rates and applying it to already-decent soil, the payback period stretches considerably.
Large-scale arable with thin margins: At thousands of hectares with commodity crop margins, the per-hectare cost of purchased biochar is difficult to justify without carbon credit revenue.

Getting Started: A Practical Approach

If the conditions look right for your operation, here's a measured approach to implementation:

Start with soil testing. Know your baseline—pH, organic matter, nutrient levels, texture, water holding capacity. Without baseline data, you can't measure improvement, and you can't build a credible case for carbon credits or buyer documentation.

Trial on a small area. Apply biochar to a test plot alongside an untreated control. Match soil type and crop. Measure yield, input requirements, and soil metrics over at least two growing seasons. This gives you operation-specific data rather than relying on general research.

Source locally if possible. Transport is a significant cost component. Look for biochar producers within your region, or investigate cooperative purchasing arrangements with neighbouring operations.

Evaluate on-farm production. If you have consistent biomass waste streams—prunings, wood chip, crop residues—on-farm pyrolysis may be the better economic path. Start with simple kiln designs before investing in more sophisticated equipment.

Document everything. Record application rates, soil test results, yield data, input changes, and costs. This documentation serves three purposes: it builds your own understanding of what works, it supports potential carbon credit applications, and it creates the evidence base for Stack 5 market positioning.

The operations that will benefit most from biochar are those that approach it systematically—not as a silver bullet, but as one tool in a broader soil health strategy. Combined with cover crops, reduced tillage, and organic matter management, biochar can accelerate soil improvement and provide a uniquely durable form of carbon sequestration.

The Stack 5 Connection

Biochar sits squarely in Stack 5 territory—it's a regenerative practice that creates measurable, verifiable environmental outcomes:

Carbon sequestration: Quantifiable, durable, and increasingly valued by carbon markets and supply chain partners
Soil improvement: Documented improvements in soil health metrics that support regenerative certifications
Waste valorisation: Turning biomass waste into a productive input demonstrates circular economy thinking
Market positioning: Operations with verified biochar programmes have a credible, differentiated sustainability story

The key is documentation. Biochar's permanence makes it one of the most credible carbon stories you can tell—but only if you have the data to back it up.