Biochar: A Billion-Dollar Opportunity for Malaysia’s Green Economy

As Malaysia accelerates its transition toward a sustainable future, biochar emerges as a key player bridging the gap between environmental preservation and economic growth. Produced by heating agricultural waste—such as palm oil residues and rice straw—through slow pyrolysis, biochar has proven to be an effective negative emissions technology (NET). It not only helps sequester carbon but also offers profound benefits for soil health, agricultural productivity, and long-term sustainability.

?

The potential of biochar as a climate mitigation tool is striking. Studies reveal that biochar applications can remove 6 to 12.4 million tons of CO? annually, making a significant impact in Malaysia’s efforts to cut agricultural emissions by up to 54%. Biochar works by locking carbon into the soil for centuries, providing a permanent storage solution while simultaneously improving soil structure. The process is further enhanced at higher pyrolysis temperatures (around 600°C), with a carbon reduction potential of ?436 to ?2,085 kg CO? per ton of biochar produced. This means biochar not only curtails greenhouse gas emissions but also offers a sustainable path to achieving net-zero targets.

?

Beyond its climate benefits, biochar has the potential to revolutionize Malaysia's agriculture sector. Here are the key advantages:

• Improved soil health: Biochar enriches the soil, increasing crop yields, retaining moisture, and promoting healthier plant growth.
• Reduced fertilizer dependence: By incorporating biochar into Malaysian farmlands, the country could reduce fertilizer imports by as much as 38–43.6 kilotons per year, which translates to savings of up to $36.05 million annually. This is especially significant for Malaysia, which faces rising fertilizer costs and increasing environmental pressure from synthetic chemicals.

The Economic Case for Biochar

The economic potential of biochar is equally compelling. The life cycle costs (LCC) of biochar production range from $116–197 per ton, while the cost per ton of CO? removed ranges between $60–204. Notably, the most cost-effective feedstock for carbon removal is palm shells, while rice straw offers the lowest cost per ton of biochar.

Scaling up biochar production, however, comes with significant capital investment. Malaysia would need around 2,110 pyrolysis plants across the country, translating to an estimated $5.86 billion investment. While this is a substantial challenge, it represents a long-term opportunity with the potential for significant economic returns, especially as demand for carbon credits and sustainable solutions rises.

Biochar’s success depends on a circular economy approach. In India, the model includes smallholder farmers selling agricultural waste instead of burning it. This waste is converted into biochar through low-emission pyrolysis and returned to the farms, enhancing soil health. Carbon credit buyers, like Google, finance this process, supporting farmers and carbon markets simultaneously.

This approach holds significant promise for Malaysia as well, where agricultural residues could be converted into biochar at scale, creating new opportunities for farmers, carbon markets, and the wider economy.

Google’s Investment in Biochar

A game-changing example of biochar’s potential has come from Google, which recently announced an agreement to purchase 100,000 tons of biochar-based carbon removal credits from an Indian initiative. This deal signals a major shift in corporate sustainability strategies, with companies moving beyond emissions reductions to focus on active carbon removal.

Unlike high-cost, high-tech solutions like direct air capture (DAC), biochar offers a cost-effective, scalable alternative to remove CO? from the atmosphere. By repurposing agricultural waste—often burned, releasing pollutants—biochar locks carbon into the soil for centuries, while improving agricultural productivity. As Randy Spock, Google’s carbon removal lead, states: "Biochar is a promising approach to carbon removal because it has the ability to scale worldwide, using existing technology, with positive side effects for soil health."

In another exciting development, Universiti Putra Malaysia (UPM) has unveiled its Biomass Microwave Carbonizer (BMC), a breakthrough technology that offers a cleaner, faster, and more energy-efficient way to produce biochar. The BMC:

• Cuts energy consumption by 63%
• Reduces carbon emissions by 70%
• Speeds up production by 50%
• Achieves 90% cleaner combustion compared to traditional methods.

This innovation has the potential to make biochar production scalable, commercially viable, and environmentally friendly. With Malaysia’s significant biomass resources—estimated at 20 million metric tons annually—the BMC could play a pivotal role in reducing emissions, enhancing soil health, and creating economic value from waste.

Challenges and Considerations: Is Biochar a Silver Bullet?

Despite its promise, biochar is not without its challenges. Critics argue that carbon removal technologies should not replace direct emission reductions. The effectiveness of biochar’s carbon sequestration also depends on soil conditions and application methods. There are questions about the permanence of biochar’s carbon storage, which is influenced by the quality of the biochar and the management practices.

Nonetheless, the urgency to combat climate change remains paramount. As Varaha CEO Madhur Jain puts it: "Even if biochar only reduces CO? for 20 to 50 years, we need to do everything we can." The global move toward carbon removal markets and corporate investment in biochar suggests that scaling up biochar production could bridge the gap between near-term climate action and long-term decarbonization.

Biochar’s Role in Malaysia’s Low-Carbon Transition

Biochar is more than just a technology—it is a game-changer for both the agricultural sector and climate strategy. By scaling biochar production, Malaysia could not only help meet its climate targets but also strengthen its agricultural economy, reduce reliance on imported fertilizers, and promote a circular economy.

With innovations like UPM’s BMC and growing interest in carbon credit markets, the future of biochar in Malaysia looks bright. The question remains: can we act fast enough to scale this promising solution and position Malaysia as a regional leader in sustainable biochar production?

If scaled effectively, biochar could be a cornerstone of Malaysia’s strategy to combat climate change while securing its place as a leader in the global carbon removal landscape. ??

Sources:

Saharudin, D. M., Jeswani, H. K., & Azapagic, A. (2024). Biochar from agricultural wastes: Environmental sustainability, economic viability and the potential as a negative emissions technology in Malaysia. The Science of the Total Environment, 919, 170266. https://doi.org/10.1016/j.scitotenv.2024.170266

?

Google signs deal to buy carbon removal credits from Indian Farms | reuters. Reuters. (2025, January 16). https://www.reuters.com/technology/google-signs-deal-buy-carbon-removal-credits-indian-farms-2025-01-16/

?

Universiti Putra Malaysia. (n.d.). | Universiti Putra Malaysia. https://upm.edu.my/news/upm_researchers_create_bmc_innovation_to_produce_quality_biochar_from_agro_wastes-30367