U.S.-FocUSed Biochar report - BioEnergy Lists

For all three pyrolysis facility-level offset types, additionality may be a major barrier to offset methodologyvalidation. This is the case wherever the pyrolysis facility was already operating profitably without carbonrevenue. In such a case, even if the pyrolysis facility is engaging in activities that reduce GHG emissions inthe ways described above, it may not be allowed to certify offsets under schemes requiring financial additionalitybecause the activities would have happened even without the carbon revenue, and are thus “business as usual.”Permanence and leakage may also be difficult to handle if the biochar producer will not be the party applying theproduct, particularly since some offset certification authorities require actual sampling and on-the-ground monitoringto ensure permanence. But to the extent that biochar appliers may invest in monitoring and verificationactivities to capture their own carbon offsets, this difficulty will be mitigated.Should the transactions costs and risks of certifying carbon offsets at the pyrolysis facility level provetoo great, biochar producers could choose to deal only indirectly with carbon markets. Most biocharproducers would not burn significant enough amounts of fossil fuels to be regulated entities under an emissionscap, thus they would neither purchase nor sell emissions allowances. Nor do biochar producers and biocharequipment manufacturers necessarily need to be generators or sellers of emissions offsets. This is because a)existing methodologies for verifying carbon offsets from soil carbon projects are already focused on the agriculturalsector rather than the agricultural inputs manufacturing sector, and b) biochar appliers would already be ina position to ensure the permanence of a soil management project using biochar at the least cost. Of course, thisdistinction breaks down in the event that a farmer purchases biochar equipment and produces her own biocharfor application on her own land. In such a case, the biochar producer might deal directly with the carbon market,but in his capacity as a farmer, not as a biochar producer.Even in the absence of biochar producers as players in the carbon market, carbon markets can affectthe biochar market by creating demand for biochar products or biochar-producing equipment amongparties that are generating carbon offsets through agricultural and soil operations, and are using biocharto do so. Biochar producers and biochar equipment manufacturers donot have to generate or sell carbonoffset credits themselves in order to derive value from the carbon market. Rather, such entities could experienceincreased agricultural sector demand for their products. A farmer, for example, might purchase biochar andbiochar-producing equipment as part of a scheme of operations to generate carbon offsets that the farmer wouldthen sell to a carbon credit aggregator, who would in turn roll the emissions offsets from hundreds of such farmsinto a suitable instrument for sale on in the carbon market.However, even if biochar producers are beneficiaries rather than players in the carbon offset market,this does not abdicate the biochar community’s obligation to understand and plan for carbon marketopportunities. This is because the ability of an agricultural sector actor to quantify and certify carbon offsetsfrom particular agricultural activities is dependent on the existence of a recognized carbon-reduction pathway ormethodology by the offset certification authority. The biochar community should engage with agricultural andsoil carbon offset producers and aggregators of carbon offsets in order to provide carbon market mechanisms,pathways, and methodologies to recognize the GHG-reduction aspects of biochar when used by agricultural andsoil operations. In the absence of streamlined, standardized procedures for the creation of biocharbasedcarbon credits, the transactions costs for such operations may exceed their revenue benefitsfor the farmer.Proving additionality for biochar-based land management practices is likely to be unproblematic. Becausefossil-fuel based fertilizer is significantly less expensive than biochar, a farmer would likely not use biocharas a soil amendment unless the additional carbon revenue could make biochar cost-equivalent to businessas-usualfertilizer. Such an argument shows financial additionality, one of the strongest types of additionality.Simply put, in the absence of carbon revenue, farmers would not use biochar. Thus credits granted for biocharapplication to soil are producing real emissions reductions that would not have occurred in the absence of thecarbon market.Biochar relevance in GHG markets in: Carbon Market Implications for Biochar75