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#4 Biochar is the new black gold

#4 Biochar is the new black gold

πŸ’‘ One idea: Biochar is the new black gold

πŸ“ˆ One data figure: 316 GW of offshore wind capacity by 2030

✨ One success: Source, drinking water from air and sunlight

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πŸ’‘ Biochar is the new black gold

Biochar recently made a comeback in the agricultural world, and it is here to stay. If you have not heard of biochar yet, you must have been living in a cave or gone through a stringent media detox for the past ten years. Anyhow, let me help you catch up, better late than never.

Biochar stands for biological charcoal. It is a byproduct that looks like charcoal and is made through the anaerobic thermal decomposition of organic materials. The raw material used for its production is normally agricultural, forestry or other organic wastes. Since the process does not utilise oxygen, biochar is a product highly rich in carbon.

Forget oil, this is truly black gold

The use of biochar for agricultural purposes is thought to have originated over 2,000 years ago in the Brazilian Amazon where populations of native Amazonians were believed to have amended nutrient-poor tropical soils with charcoal and organic matter. Indeed, biochar helps plants grow by improving the physical condition of the soil. The benefits are the following:

  • Enhancing the soil structure and lessening the risk of erosion
  • Boosting porosity, retaining nutrients and enhancing fertility
  • Increasing water retention and improving drought resistance
  • Regulating nitrogen and therefore replacing some fertilisers
  • Benefiting soil microorganisms and accelerating composting

Biochar will definitely shape the future of sustainable agriculture. Moreover, it is relatively cost-effective to produce and use. Farmers are both organic waste producers and biochar end users, which draws a perfectly virtuous circular economy model.

On top of that, Verra just announced the validation of the long-awaited VM0044 Methodology for Biochar Utilization in Soil and Non-Soil Applications, notably co-developed by Forliance and South Pole. The methodology provides a framework for quantifying emission reductions and removals from the usage of biochar. 10 to 100 times more stable than mere biomass, biochar carbon can remain in the soil for decades to millennia and generate high quality carbon credits. This should push nature-based solutions to a higher level.

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The Biocare-Kiland project is expected to generate 1.8 million carbon credits by transforming 4.5 million tonnes of fire-damaged timber from Kiland's timber plantations in Australia into approximately 900,000 tonnes of biochar. The potential is huge!

The emerging biochar market is currently almost $200m big but is expected to face a double-digit annual growth and to reach $500m by 2030. Carbon project developers and start-ups are already on it. Research is still being conducted and new applications in the areas of agriculture, environment and energy will certainly appear. Don't miss out!

πŸ“ˆ 316 GW of offshore wind capacity by 2030

The Global Wind Energy Council (GWEC) just raised its outlook for 2030 and now predicts that 316 GW of offshore wind capacity will be installed by the end of the decade, 5.6 times more than today's capacity (2022). This follows a new annual global installation record set in 2021 with 21.1 GW of offshore wind connected to the grid worldwide, 3 times more than in 2020. This new capacity brings global cumulative offshore wind power capacity to 56 GW, an impressive growth of 58% from 2020.

The surge is fueled by exponential growth in the Asia-Pacific region and continued strong growth in Europe. 80% was contributed by China, the global leader in new offshore wind installations for the fourth year. Europe is the only other region which reported new projects completed last year, mainly in the UK, Denmark, Netherlands and Norway.

New offshore installations (MW) *Compound Annual Growth Rate. Source: GWEC Market Intelligence, June 2022

Asia will replace Europe as the world’s largest regional offshore wind market by the end of 2022, but Europe is expected to recapture the title by the end of the decade. Some other serious contenders are emerging: the US (finally!), Vietnam, Brazil and Australia are pushing investments as well.

In terms of global CO2 emissions, this encouraging trend is surely good news, but the booming industry will have to overcome some serious challenges:

  • Policymakers recognise the sector’s capacity to transform energy systems and provide jobs but urgently need to put in place the policy and regulatory frameworks to deliver against their international pledges.
  • The offshore wind supply chain might not be able to scale up to meet rapidly growing global demand. From an investor perspective, this might be a lucrative segment to explore.
  • The industry will face sustainability challenges with regard to critical minerals procurement, the carbon footprint of the supply chain, and marine spatial planning seeking to balance the interests of different marine users including biodiversity.
  • The development of the industry relies on technology innovation, another sector of interest notable for energy-focused tech VCs.

Much more about the evolution of the sector is in the full GWEC Global Offshore Wind Report 2022.

✨ Source, drinking water from air and sunlight

According to the UN, 50% of the world population will face water scarcity by as early as 2025. Here is where Source Global kicks in. Source panels absorb water vapour from the air and, using solar energy, convert it into liquid water, which is then collected in a reservoir. Minerals are finally added to make perfect drinking water. Genius!

Source panels tap the sky for perfect drinking water

The panels are completely off-grid and can be installed almost anywhere in the world. Each panel costs about $2,000 and produces 3 to 5 litres of clean drinking water per day. Even assuming a long useful life, it seems to me that the price per litre still remains pretty high, but I am sure the company is making progress every year. The panels can be put up on the roof of any building (individual home, school, hospital, etc.) and connected to your kitchen tap or a water fountain inside the building. Another solution is simply to produce bottled water for local distribution.

Leveraging its numerous applications and the flexibility of its solution, the company has now developed 450 projects in more than 50 countries. This is more than a dream for the CEO Cody Friesen who invented the technology in 2014 and founded Source Global in 2015. Building on its success, the company has raised $270 million to date, including a recently closed Series D equity financing of $130 million, and is notably backed by Blackrock and Bill Gates's Breakthrough Energy Ventures. Next round on me!


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