Although market information and long-term impacts remain unknown, a biofuel byproduct can store carbon and enhance soil quality – and its market is growing despite higher costs
Napa Valley grower Eckhard Kaesekamp is very pleased with a certain group of around 20,000 grapevines he has been nurturing. Their yield has been 5% better than what he’d expected. Their root mass is greater than his other vines as well – which means they’ll hold water better. In drought-hit California, that’s gold.
Kaesekamp, whose Knights Grapevine Nursery supplies vines and rootstocks to the region’s wineries, believes these vines did especially well thanks to a soil treatment called CoolTerra – a product made from a carbon-rich substance called “biochar” that is supposed to improve soil fertility and increase water and nutrient retention.
Cool Planet Energy Systems – the startup company that manufactures CoolTerra – formed to produce a biofuel replacement for gasoline. The master plan was and remains to use wood chips, corn stover and non-food crops as the feedstocks for this fuel. The firm always intended to have a side venture in selling the byproducts as biochar. But right now, the business is all about CoolTerra – which is bringing in modest amounts of revenue.
The textbook definition of biochar is a solid material resulting from the carbonization – the elimination of water and volatile chemicals – from plant matter.
Inspired by the fertility of the biochar-rich Amazonian soil called terra preta, enthusiasm for biochar soil and water additives has grown in recent years. Biochar is said to enhance soil quality by increasing its microbe content – improving yields while requiring less water and fertilizer. In water, it acts like a filtration agent. And biochar is potentially a tool to fight climate change because it can sequester and hold carbon in the soil for a long time.
When asked for its assessment of biochar’s market potential, Cool Planet responded: “Biochar-based soil enhancement is a nascent market” concentrated in the food and energy sectors. “We believe the potential global market for CoolTerra could be measured in millions of tons annually.”
Poised to sprout
Authoritative information about the biochar industry is scarce, with attempts to quantify the market varying widely. Tom Miles, a biomass energy consultant and coordinator of the Pacific Northwest Biochar Working Group, thinks that the US alone produces around 5,000 tons in a year. But the International Biochar Initiative, a trade and advocacy group for the nascent industry, estimates that 827 tons of biochar were produced globally in 2013.
According to a business research firm called Transparency Market Research, biochar generated $229m in revenues on production of 100,000 tons globally in 2013, and will grow to $572m in revenue on about 300,000 tons of production by 2020. IBI considers these 2013 estimates inflated, but admits that its own assessment could be way off. It is working on its own state-of-the-industry report.
No one seems to disagree that the biochar business is poised for rapid expansion, however.
“It’s only in the last 10 years that biochar has taken off as an industry on it’s own,” says Sanjai Parikh, an assistant professor of soil chemistry at the University of California at Davis. “It’s very popular and is growing quickly.”
Given the sprouting of biochar businesses, the IBI two years ago established industry standards and a certification process. The first product it certified as safe to use was CoolTerra.
It’s still an open question what the long-term effects of current biochar products will be on soil or plants.
“The main problem with biochar is that every biochar every person creates is different,” Parikh says. But regardless of how it’s made, he says: “it’s not a fantasy soil. It’s part of a solution that works in certain situations”.
According to Milton E McGiffen Jr, an agronomist and plant physiologist at the University of California at Riverside, CoolTerra stands out from other biochar products because its composition is consistent from one batch to the next. In his department, six faculty members and 15 students use CoolTerra in most of their work involving biochar.
Parikh maintains a healthy skepticism, however. Regarding CoolTerra, “from my point of view, as an academic, we need to know how they make [their biochar]”, Parikh says. “Apparently, they have some catalyst and claim it’s a different product.”
A focus on micro-scale industry
On the strength of its biofuel business plan rather than its biochar side business, Cool Planet – which has offices in Greenwood Village, Colorado and Camarillo, California – has raised around $150m from corporations and venture capital investors including Exelon, BP, Google Ventures, General Electric, North Bridge Venture Partners, Shea Ventures and Concord Energy.
“We look for companies that are disruptive technologies and potentially complement or add to our portfolio of existing businesses,” says Mike Smith, head of Constellation Technology Ventures, the investing arm of Exelon. And they do need to fit in with Exelon’s sustainability goals, he adds. “Carbon-negative bio-gasoline is consistent with that mantra.”
Exelon plans to be an early customer for Cool Planet’s biofuel, Smith says.
But Cool Planet isn’t making fuel yet and so isn’t producing biochar from scratch. Rick Wilson, a company vice president, says the company currently buys raw biochar from the market and then prepares it with a proprietary process. “A year from now, we will have partnerships with the soil amendment companies in Home Depot and the biggest seed companies in the world,” says Wilson, who declined to share names.
For now, the company is distributing CoolTerra to a small but diverse group of potential customers. One of these, a California firm called Organic Waste Solutions, plans to buy and use the product in three pilot programs to treat wastewater and storm water runoff in Southern California.
CoolTerra won over Kasekamp with the results he has observed in his wine grapes. Bill Camarillo, chief executive of California-based soil company Agromin, is also convinced. In four years of researching biochar, he says, he hasn’t found anyone else who “has invested time, energy, and money to use technology that can enhance biochar, no matter who makes it”.
Camarillo has been testing CoolTerra as a composting additive to determine if it can speed up decomposition of organic matter, reduce odors from the process and help release nutrients locked up in the compost for use by plants. “The tests have come back positive in all three uses,” he says.
BioChar’s $0.50 per pound (0.45 kg) price is a challenge when the chemical equivalent goes for about $0.12 less by weight. Still Camarillo has agreed to distribute CoolTerra alongside Agromin’s own soil products. His target market: the 23m productive acres spread across California.
Despite the growing interest in its biochar, Cool Planet’s overall goals remain centered on bio-gasoline.
CEO Howard Janzen, who has grown the startup from 40 employees to 110 in the past two years, says that an emphasis on micro-production will set Cool Planet apart from others in the biofuel industry. The company intends to build hundreds of small plants in the US – and thousands overseas – as opposed to one large refinery, he says. This will allow the company to locate plants near their feedstocks, cutting shipping costs for raw materials.
According to Janzen, Cool Planet has committed to building and operating three biofuel plants in Louisiana. The first – a facility that will cost between $50m and $60m and have the initial capacity to produce more than 1m gallons per year – broke ground earlier this year in Alexandria. The company expects it to begin operating in late 2015 or early 2016.
While its business model today is based on biofuels, concern about negative impacts of commercial fertilizers is growing along with interest in greener alternatives. So if it can find a way to increase volumes and cut its prices, Cool Planet could soon see a growing business in biochar.
Priyanka Sharma-Sindhar is a writer, journalist and entrepreneur based in the San Francisco Bay Area.
The article source: http://www.theguardian.com/sustainable-business/2014/sep/02/cool-planet-biochar-charcoal-biomass-energy-gasoline-soil-fertilization