water data Trading

Navigating the Carbon Market: A Guide for Businesses and Investors

Carbon markets are trading systems in which carbon credits are sold and bought. Organisations or individuals purchase carbon credits – that remove or reduce GHG emissions – in the carbon markets to compensate for their own GHG footprint. One tradable carbon credit equals one tonne of carbon dioxide or the equivalent amount of a different GHG, e.g. methane or nitrous oxide. There are two main types of carbon markets: compliance and voluntary carbon markets. 

Compliance markets are set up by a national, regional and/or international policy or regulatory requirement. Emissions trading systems (ETS) are a market-based approach to reducing GHG emissions and operate on a “cap-and-trade” principle.  Under this system, the government sets a limit on the total amount of GHG that can be emitted. Emitter companies within scope are required to hold a certain number of allowances, which represent the right to emit one tonne of greenhouse gases. Companies can buy and sell allowances on a market, and they can also generate their own allowances by reducing their emissions.

In the voluntary carbon market (VCM), companies, individuals, and organisations can buy carbon credits freely and without any government mandate. VCMs have been around for over 20 years, yet they have grown rapidly in the last five years as a result of widespread corporate Net Zero commitments. According to McKinsey, global demand for VCM credits is set to increase 15-fold by 2030 and 100-fold by 2050. Project developers are at the core of the voluntary carbon market as they generate credits that reduce greenhouse gas emissions, such as those derived from biochar and carbon removal projects.

  • Investment opportunities:

Due to high demand for quality carbon removal credits, biochar producers could well benefit from billions from buyers like Frontier Climate, the carbon removal consortium funded by Stripe, Alphabet, Shopify, Meta, McKinsey. Biochar itself is experiencing strong demand on the exchanges, having become a key component of net-zero targets set by Microsoft Corp, JPMorgan Chase & Co, Boston Consulting Group, Amazon and other blue-chip companies. But whilst carbon removal demand is robust, the supply of high quality, trustworthy CO2 removal credits (CDRCs) is still scarce. Having partnered with 50+ project developers CrystalTrade has access to one of the largest pools of high quality of biochar credits.

The Carbon Removal market is booming. Some highlights from the 2023 Year-in-Review report by (CDR.fyi)

1️⃣ 4.5𝐌𝐭 𝐂𝐃𝐑 𝐁𝐨𝐮𝐠𝐡𝐭: Exponential growth in 2023.

2️⃣ 𝐌𝐮𝐥𝐭𝐢𝐩𝐥𝐲 𝐛𝐲 2 Unique buyers each year.

3️⃣ 93% 𝐨𝐟 𝐕𝐨𝐥𝐮𝐦𝐞 is Biochar.

4️⃣ 27% 𝐨𝐟 𝐁𝐮𝐲𝐞𝐫𝐬 from financial services

  • CrystalTrade’s role:

Becoming an European Biochar Certificate (EBC) C-sink Broker accreditation by Carbon Standards International marks a critical milestone in our roadmap. This certificate gives us the legitimacy to trace the biochar from the plant to its final state, sell the associated certified carbon credits and retire them from the registry.

The EBC is recognised globally as a byword for quality and integrity in the biochar ecosystem and underscores our commitment to deliver on our mission to bring transparency and quality to the carbon removal markets. 

The EBC enables and guarantees sustainable biochar production, processing and sale. It provides investors with a reliable quality standard they can rely on to pre-empt and mitigate any greenwashing, reputational or regulatory threat.

In addition to the EBC certificate, we have been recently awarded the Silver Bio360 for our contribution to driving innovation in the carbon removal market. This industry recognition is increasingly positioning CrystalTrade as the go-to-place for high-integrity biochar credits. We are pioneers and thought leaders in the biochar market as we create technology traction with our data-based LCA and traceability tools while driving market demand with credits and verifiable environmental assessment investors can trust.


What is Biochar ?

  • What is Biochar ?

Biochar is a highly porous, stable form of charcoal produced through pyrolysis, which involves heating organic biomass (forestry waste, animal manure etc) to a temperature between 400°C to 700°C in the absence of oxygen. 

This process results in a carbon-rich substance that can then be concentrated and permanently stored underground. Through highly scientific and robust processes biochar typically locks away 1 ton of COs which is equivalent to 3 tons of CO2 permanently removed from the atmosphere.

  • Biochar benefits

Permanent Carbon Sequestration: The biochar production process turns organic waste into stable charcoal that is resistant to decomposition. Biochar’s remarkable capacity to sequester carbon lies in its stability. When incorporated into soil, biochar remains in the ground for centuries, effectively locking away carbon that might otherwise contribute to atmospheric carbon dioxide levels. This storage efficiency of carbon removal has been highlighted by the IPCC 

Cost effective: Soil sequestration of pyrolysed carbon is a relatively inexpensive option compared to other carbon removal techniques. 

  • Co-benefits for local communities

Biochar production provides an additional source of income for smallholder farmers in emerging economies. By creating new jobs in rural areas, biochar production can help to reduce urban migration, reduce inequalities and support the development of local economies. 

Biochar improves soil fertility and water retention, benefiting agricultural productivity and ecosystem health. Biochar is a very porous substance that sucks in nutrients becoming a non pollutant substitute to chemical fertilisers. 

Additionally, biochar production creates electricity as a byproduct that can be utilised as a renewable energy source. Biochar is also a great circular economy solution to disposing crop residues, manure, and forestry waste. 

  • Impact on carbon removal

There is widespread agreement that we need to pursue multiple strategies to slow climate change. The current net zero trajectory will leave us falling short of all base targets by 2030, unless we triple down on carbon removal. In the coming years, biochar is set to play a critical role in climate change mitigation, with the potential to remove significant amounts of carbon from the atmosphere and improve soil health worldwide. 

Momentum is growing for the CDR industry and according to experts 2024 will be the biggest year for removals yet. The Global stocktake showed that we are not on track for the 1.5 degrees target. There is growing awareness that both decarbonisation and carbon removal are necessary to hit global climate targets. The final COP statement said “governments need to take action and removals are important in the equation”. This is a game changer for the future of industry.

Regulation and public money is moving away from industry support and funneled into high impact climate change projects and carbon removal technologies. Project developers will be able to leverage various grants, subsidies, and tax incentives aimed at promoting biochar production. 

  • Crystaltrade role with traceability & LCA for Biochar

CrystalTrade has developed a state-of-the-art carbon removal platform which is gaining significant traction. Our newly released end-to-end LifeCycle Analysis (LCA) software is a first of its kind in the industry and represents an important breakthrough for the carbon removal market. Our LCA software captures all data related to biochar carbon removal projects from feedstock to final use. Using our tool, project developers can design their Life Cycle Analysis and customise it to their processes to track emissions per item (pyrolysis emissions, fertiliser production emissions, drying emissions, capital emissions, etc.).

We are honoured to be attracting a great deal of biochar producers keen to use our proprietary lifecycle analysis and traceability tool to calculate the net environmental impact. The tool responds to a pain point by guaranteeing accurate issuance of carbon credits of the biochar production which in turn helps them command higher prices in the market. Simultaneously, we are receiving remarkable interest from corporate buyers seeking high-quality data-backed carbon credits to shield their reputation against greenwashing claims and regulatory risk.

Explore our new LCA and traceability platform and find out how it can add value to your project!