U.S. Biochar Market Size, Share & Trend Report

U.S. Biochar Market Size, Share & Trend Analysis Report By Technology (Gasification, Pyrolysis), By Application (Agriculture, Animal Feed, Health & Beauty Products), By States, And Segment Forecasts, 2020 - 2027

  • Published Date: Apr, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-4-68038-427-7
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 99

Report Overview

The U.S. biochar market size was valued at USD 97.8 million in 2019 and is anticipated to witness a revenue-based CAGR of 18.6% from 2020 to 2027. Adoption of organic farming is a key driver for the rise in the biochar demand globally. According to U.S. Biochar Initiative, the market is at its nascent stage and is quite fragmented. Currently, there are significant numbers of producers in the country that have small to medium scale production capacity. Industry participants are focusing on the development of cost-effective manufacturing technologies to offer the product at affordable prices.

U.S. biochar market size

In agriculture sector, the product is primarily used to enhance soil fertility, improve plant growth, and provide crop nutrition. It is responsible for improving crop yield and therefore, enhances overall productivity. Farmers are the most important customers in the market. Major application areas of agriculture include gardening, horticulture, field crops, landscaping, and turfs. End users majorly prefer dry biochar owing to its easy application to the soil. Other forms include blended and inoculated forms which are used for modifying soil texture, improving water management, and increasing the carbon content of the soil.

U.S. region is characterized by diversified climatic conditions from cold in the north to tropical and subtropical zones in the central and southern areas. This has contributed to varied agricultural production in the region. Biochar is mainly used as a soil improvement product in agriculture sector. Growing focus on improved yields in the U.S. has resulted in increased utilization of fertilizers in the agricultural sector, thereby leading to increased acidity levels in the soil. In order to neutralize these soils, carbon-based additives such as compost and biochar are gaining preference.

The market is characterized by the presence of a mix of small and medium scale producers with regional expansion aspirations. The rising demand for organic food and the consequent expansion of organic farming is attracting multinational companies to expand their production facilities in U.S. Moreover, rising population is expected to boost food production, which is anticipated to have a positive impact on the product demand due to its ability to increase crop yield. However, farmers are still unaware of the long-term benefits of biochar in agriculture and the product is yet to gain full acceptance in the sector.

The end users in the marketspace are categorized by two buyer groups. First includes bulk buyers that are farmers and others are small scale buyers such as urban &and home gardeners, landscapers, and horticulturalists. Small scale buyers of the product generally indulge in online purchases or direct retail shopping. Whereas farmers, prefer to buy the product directly from manufacturers to avail bulk discounts and maintain long term supply. There are numerous small entrepreneurs in the market who are completely integrated across the value chain from raw material procurement stage to product distribution. Some of these include Oregon Biochar Solutions, Cool Planet Energy Systems, and New England Biochar.

The industry is driven by rising need for soil remediation and ascending demand for organic food. Biochar is considered as one of the most effective and safe products for soil remediation. It provides nutrients such as phosphorus, potassium, calcium, nitrogen, and magnesium required for plant growth. The product also improves the nutrient absorption of plants and the water-retaining capacity of the soil. Also, organic farming is expected to greatly benefit from the use of the product as it nurtures the crop quality by providing essential nutrients required for plant growth and circulates carbon dioxide in the atmosphere, which benefits the photosynthesis process. Organic farming in the U.S. has grown significantly over the past few years owing to rising health concerns among consumers due to the usage of synthetic chemicals.

Technology Insights

On the basis of technology, the U.S. biochar market has been segmented into pyrolysis, gasification, and others. Pyrolysis was the largest segment and accounted for 73.5% of the total market share, in terms of volume, in 2019. Biochar manufacturing is dominated by pyrolysis owing to its high-quality product and large production quantity. Gasification was the second-largest segment that accounted for over 20.0% of the total market share, in terms of volume, in 2019.

Manufacturers use both fast and slow pyrolysis processes depending on their requirements. In fast pyrolysis, the finely ground biomass is pyrolyzed within a few seconds while slow pyrolysis can bake large particles for a longer period, which results in better carbon sequestration. Various companies such as Three Dimensional Timberlands (3DT) have developed vacuum pyrolysis technology, which is capable of producing feedstock at 3 metric kilotons per hour. This technology is an intermediate pyrolysis process, having the ability to work on wood chips that are close to an inch. This gives a balanced output of biochar, non-condensable gasses, and bio-oil.

Gasification is similar to pyrolysis, wherein the biomass is heated in the presence of limited oxygen, which helps breakdown the woody biomass yielding synthetic gas. This technology has witnessed a rise in demand on account of growing need for electricity in distributed energy systems. Phoenix Energy is engaged in producing biochar with the help of gasification systems along with generating electricity by using customized diesel engines. The 500 KW gasifier system, located in California, U.S., is engaged in producing electricity by using waste wood. The system also produces one ton of biochar per day. Gasification systems are expected to witness strong demand over the forecast period owing to the growing demand for clean energy.

Other major technologies include torrefaction, flash carbonization, and hydrothermal carbonization. Hydrothermal carbonization uses water and is expected to be one of the major technologies in the future. It is cost-effective and provides more yield than pyrolysis and gasification processes. The only major concern is biochar composition, which varies depending on the manufacturing technologies. The variation in carbon content would result in different combustion temperatures and could increase the number of contaminants.

Application Insights

Biochar is essentially used in agricultural practices owing to its core ability to improve soil fertility and crop productivity. In the last couple of years, agricultural sector in the country has witnessed a steady growth on account of improvement in consumer demand. The major aspect that needs to be addressed for increased market penetration is awareness about its benefits. Price difference between biochar and its-blended products is another key aspect that could open up new avenues for product innovation.

Agriculture was the largest application segment and accounted for 82.4% of the market share, in terms of volume, in 2019. The agriculture sector is expected to witness high growth over the forecast period on account of increasing demand for improving soil fertility and water holding capacity. In addition, increasing crop production is expected to augment the use of biochar in agricultural applications, in turn, driving the market over the forecast period.

U.S. biochar market share

Furthermore, animal feed is an upcoming application of the substance. Manufacturers in the country are optimistic about biochar application in animal feed. The major factor limiting the growth of this segment is the lack of regulatory support. The application of biochar in animal feed has been prevalent in the U.S. but the lack of support and ambiguity surrounding the grades is expected to have a negative impact on the overall market growth. Charcoal is commonly used in animal feed and is quite popular in the swine population as they are on the lookout for unnatural tastes. It improves the butterfat content as well as the quality of milk.

Country Insights

California dominated the biochar demand in the U.S. with a revenue share of 19.2%, in 2019. The presence of a large number of manufacturers on the west coast is expected to benefit the consumption of biochar in California, Oregon, and Washington. In addition, wheat cultivation is expected to be a major factor influencing product consumption across all the states.

In California, agriculture is a significant component of the economy. The state generated agricultural revenue of USD 50 billion in 2018. It produces over 400 varieties of cash crops with leading products such as almond, avocado, marijuana, rice, grapes, and strawberry. The consumption of biochar is expected to be the largest in this state owing to increased yield and rising awareness among farmers.

Texas was the second-largest state in terms of biochar consumption in 2019. The vast number of farms and land under agricultural use is driving the demand for biochar in the state. In 2018, Texas farms generated revenue of USD 25 billion. The state leads the nation with 248,816 farms and ranches, covering about 127 million acres of land.

Kansas is an important agricultural state that ranks seventh in the U.S. in terms of agricultural production. The top five products are wheat, calves and cattle, soybeans, corn, and hogs. Wheat cultivation is a major consumer of biochar in the state. Rebounding economy in the state due to tax changes is expected to result in the surplus budget, which, in turn, is projected to benefit agricultural sector. Other major sectors driving the demand for the product include animal feed and wastewater industries.

U.S. Biochar Market Share Insights

The industry has exhibited a continuous growth in the development of high-quality and cost-effective technologies due to increased competition among the rival companies. In order to sustain in the competitive environment and capture more market share, research and innovation and pricing strategy of the product for consumers can play an important role for the manufacturers.

Regional players are focusing on integrating themselves throughout the different stages of the value chain in order to increase their profit margin and reduce dependency on raw material suppliers. Industry participants are also establishing direct contact with local farmers to sell their products. The strategy shall help manufacturers to develop customer base and loyalty. Advance Renewable Technology International (ARTI), one of the leading biochar producers, is investing in R&D activities to gain awareness regarding the benefits of biochar.

Report Scope

Attribute

Details

Base year for estimation

2019

Actual estimates/Historical data

2016 - 2018

Forecast period

2020 - 2027

Market representation

Volume in Kilotons, Revenue in USD Million & CAGR from 2020 to 2027

State Scope

California, Texas, Kansas, Oklahoma, Idaho, Arizona, Others

Report coverage      

Revenue forecast, company share, competitive landscape, growth factors and trends

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Segments Covered in the Report

This report forecasts volume and revenue growth at country level and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the U.S. biochar market report on the basis of technology, application, and states:

  • Technology Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

    • Pyrolysis

    • Gasification

    • Other Technologies

  • Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

    • Agriculture

    • Animal Feed

    • Health & Beauty Products

    • Other Applications

  • State Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

    • California

    • Texas

    • Kansas

    • Oklahoma

    • Idaho

    • Arizona

    • Other States

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