The economics of using forest biomass from fuel treatments to produce biochar for agriculture

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Biochar is an anthropogenic charcoal used as a soil amendment. It can be made from forest biomass using a wide range of methods, from wooden ricks and simple kilns to large-scale industrial pyrolysis systems that produce heat, power and sometimes liquid fuels and chemicals as co-products. This presentation is focused on understanding the potential costs and benefits of using woody biomass from fuel treatment and forest restoration to produce biochar used as a soil amendment in agriculture. Nate will synthesize the results of multiple published studies and ongoing field research cutting across both investment-oriented financial analysis and broad economic analysis that includes non-market benefits and ecosystem services. Agricultural end uses considered include soil amendment for rangeland restoration, row crops, orchards and vineyards, and biochar use as an adsorbent in bedding material in dairy and cattle operations. Results show that the benefits of biochar systems linking forestry and agriculture are likely to be undervalued when calculated strictly on a financial basis. For example, for a case study in Colorado under the standard practice of disposing of slash through pile-burning, the net present value (NPV) of fuel treatment thinning to reduce wildfire risk on 138,034 ha over 20 years is -$275 million. When biomass is used for energy and products and non-market values are included, the project value significantly improves, with positive NPV over $10 million over 20 years. Additional revenue is possible if carbon offsets are generated from biochar application in agricultural settings under existing incentives and carbon offset protocols, depending on carbon price. Biochar production for agriculture provides an opportunity to efficiently use a variety of forest biomass feedstocks that are otherwise treated as waste biomass and including full valuation of treatment improves the financial viability and economic value of biochar supply chains linking the forest and agricultural sectors.