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Unlocking the Potential of Blockchain in Biochar Carbon Markets

Unlocking the Potential of Blockchain in Biochar Carbon Markets

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March 27, 2024

Blockchain technology can help to greatly enhance the management, oversight and trade of biochar carbon removal and associated carbon credits. 

Blockchain’s distributed ledger transparently and permanently records data entries, helping to ensure the traceability of biochar carbon credits from their origin and providing proof of carbon removal, while also allowing for the unique identification of each metric ton of carbon dioxide sequestered by biochar. Tracking biochar’s lifecycle from creation to sale and retirement can thus help to prevent duplicate claims or fraud.

Smart contracts on the blockchain can also help streamline the carbon credit verification process by setting specific sequestration benchmarks and automatically executing transactions when these benchmarks are met. This can help reduce the reliance on intermediaries, cut costs, and boost efficiency, while securely validating biochar carbon removal claims.

Blockchain can also enable a global marketplace for carbon credits, improving access for both buyers and sellers, including small-scale biochar producers that might be overlooked in conventional markets. This increased market access can help increase liquidity and facilitate easier transactions based on demand. Blockchain can also help reduce transaction costs by streamlining certification, verification and trading processes, making it more economically feasible for biochar projects to enter carbon markets — and for buyers to invest in carbon removal — with security features designed to protect against fraud and unauthorized interference, bolstering trust.

Blockchain also allows for real-time, accurate monitoring of carbon sequestration through the integration of devices that can automate data collection by measuring the amount of biomass converted into biochar — or even estimating the amount of carbon captured. Increased transparency has the potential to attract more funding for biochar projects.

By providing a transparent and accessible platform, blockchain technology invites wider participation from stakeholders, including investors, regulators, and the public. It provides a comprehensive solution to many challenges in tracking, verifying and trading biochar carbon credits, making carbon markets more efficient, transparent and reliable — as well as supporting the growth of the biochar sector as an effective carbon removal strategy.

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