Where is biochar’s killer app?
Part IV: Why isn't biochar big?
Last week we investigated our (mis)conceptions about how to make biochar, and for the field to grow, our need to make industrial biochar. Check it out here.
Part IV: Where is biochar’s killer app?
A common refrain: What is biochar’s killer application? Here is my guess on why there isn’t a satisfying answer: Until recently, biochar companies weren’t focused on solving a specific client’s problems.
How did I draw that conclusion? I interview biochar companies at least weekly. When I ask founders “Why did you start your biochar company?” the majority of answers fall into the three categories below.
For say, ~50% of people I’ve talked to over the last year, the primary motivation to start a biochar company has been some form of response to the question: “How can I help save the world?” I see the wave of enthusiasm for biochar in the 2010’s as a manifestation of this idea. Making biochar is inherently good, so any business that could make enough of it would organically develop a business model that was also good. This viewpoint was particularly popular with engineers, who saw biochar as a way to use their skills to address a global problem. (The question they were solving could be phrased as “how do I make a lot of biochar?” and success was framed as a big pyrolyzer, or lots of little ones.)
About 25% of my interviewees focused on waste management. These companies wanted to turn a cost center into a profit center, but have made meager progress. Typifying this group are sawmills, paper mills, forestry groups that have machines but no customer relationships. They could make a lot of biochar, but tend not to because of minimal demand.
In contrast, I also spoke with next-gen biochar entrepreneurs focused on monetizing biochar as a product. Like most entrepreneurs they focus on answering the question, “What does my customer want?” They deliver biochar that has specific characteristics, are agnostic to the pyrolysis system but rigorous in production, using consistent feedstock and processes, and often include post-pyrolysis preparations (ionization for metal capture, inoculation for soil amendments, heat and pressure for activated carbon). They are searching for biochar’s killer app. You’ll see them talk less, if at all, about biochar’s story and historical applications, and they certainly won’t tell you to make their product at home. A keyword when looking for this kind of company: “advanced carbon.”
Happily, the third group isn’t leaving the rest of the field behind. There are two promising ways companies that started with a “save the world” ethos are adapting (or finding the world is changing to meet them.) First, founders initially focused on production or exciting new pyrolyzer tech with the goal of saving the world can become savvy operators and find markets to monetize. Secondly, the world (via the carbon markets) is getting better at compensating companies for the things biochar is really good at (water retention, water purification, toxin removal, soil carbon, microbial life, etc.) that are sometimes euphemistically called “ecosystem benefits.” If the save-the-world’ers can just hang on long enough, they’ll be right, and will end up getting paid in the form of carbon credits, water storage, and detoxification. They weren’t wrong, they were just early.
For the waste market, after trying not to lose money (or lose less), there are two changes that suggest a way to scale up is at the door. First, once homogenous biochar can be used for carbon offsets at scale, these players will be well positioned, and will scale up quickly on account of their access to finance. Secondly, with improved productization of the market and consequent standards, these operators will be able to aim at sophisticated and liquid wholesale markets. Assuming that happens, the customer relationships that these companies never built will be inessential. Hopefully that will happen soon, but I think bigger moves here may still be five years away.
As for the product focused companies? Well, they’ll be scaling up, trying to outrun the legacy producers trying to catch them.
Which brings me back to the initial question: Why isn’t biochar big? Well, because until recently, most people were trying to make biochar, not products containing biochar. As product-focused founders start companies, and the true believers find their niche, the market should grow, and grow quickly, *especially with a VCS offset protocol I expect will launch late 2021.*
So that’s my hypothesis: the potential of biochar has yet to be realized because it’s a new thing with none of the novelty, an old thing without developed markets and policy support, a complex thing we’ve been telling people is simple. And...we’ve told everyone not to buy it.
And, biochar’s OGs are right: it’s still early days. It’s easy to see the path to growth now: build products for specific markets, process in relatively sophisticated pyrolyzers, focus the narrative on the value to the client, not the story, and let people’s trust in the product develop from usage, not production.
Happily, that’s more and more of what I see when I look at the field today.
Examples: Conventional mindset, transition to product focus
Carbo Culture - Groundbreaking pyrolyzer --> Urban water and tree management (interview, website)
Rainbow Bee Eater - High-quality pyrolysis at scale --> Heating for scaled grow operations (interview, website)
Pacific Biochar - High scale biochar production --> Compost + carbon offsets (interview, website)
Carbofex - High scale biochar production --> Compost + carbon offsets (interview, website)
Climate Robotics - Soil improvement for row crops (interview, website)
Circle Carbon - Local biochar production --> Vegetables, soil, local food hub (interview, website)
Examples: Waste management mindset
Examples: Product mindset
Pure Life Carbon - Next-gen growing media (website)
Bygen - Lower cost activated carbon for heavy metal remediation (interview, website)
Bio365 - Living growing media for the cannabis industry (website)
New World Pavement Solutions - Construction materials (interview coming soon, website)
ARTi - Specialized product developed with partners (interview, website)