Biochar & Climate Finance: a new playing field for CAs

Sustainability is no longer confined to conference rooms. Enter any business boardroom and you will hear discussions about ESG goals, carbon neutrality, and climate plans. Biochar is one of the climate solutions that has gained significant traction. In simple terms, it is produced when agricultural or forestry waste is heated in a low-oxygen environment — a process known as pyrolysis — converting short-lived plant carbon into a stable form that can remain in soil for hundreds of years.

Biochar is typically applied where crop residues would otherwise be burned or left to decay, releasing carbon dioxide into the atmosphere. It is pursued because it locks carbon away permanently, improves soil health, and creates a measurable, financeable climate benefit.

Researchers discuss soil health and carbon storage. These matter. But there is another facet that is equally important, and it concerns the professionals in finance and accounting — namely, the financial potential of biochar.

For Chartered Accountants, biochar is not merely an environmental concept; it is a professional opportunity. The space involves reporting and verification systems, carbon credit trading, frameworks, and financial structures. Real work. Real complexity. A biochar project offers a new professional footing on which CAs can actually add value as India transitions to the low-carbon development phase.

Most organizations getting into biochar do not have the financial infrastructure or accounting skills. They know the environmental narrative and are ecstatic about carbon credits — but they lack mechanisms to measure, report, and verify claims. They have no financial models to present investors with returns, and no governance frameworks to ensure everything is done right. This is the gap that CAs fit perfectly.

Biochar is produced when biomass such as crop residues, agri-waste, and forestry by-products are heated through pyrolysis, converting unstable organic carbon into a stable form suitable for long-term soil storage. Once deposited in soil it lasts hundreds of years, which is why it has become one of the most persistent carbon sequestration practices in the current market — and why it is so highly regarded by global carbon markets.

But beyond the science lies an emerging financial story. Biochar projects can tap into:

• Voluntary carbon markets
• Green financing instruments
• ESG-linked funding
• Corporate sustainability budgets
• Indian government climate incentives

All of these demand transparent accounting, verification, due diligence, and strategic financial planning — the very things Chartered Accountants have in abundance.

Biochar presents unique opportunities for Chartered Accountants. Companies are on the lookout for accountants who can help them navigate this emerging field.

At present, a significant part of this residue is burned. Stubble burning causes enormous air pollution — one of the country's major environmental problems. Burning is quick and cheap, but the residue can instead be collected and converted into biochar: once collected, it can be converted, sold, and used to generate credits. This is the point in the value chain where timing becomes critical.

Biochar projects are typically initiated during post-harvest periods, when large quantities of crop residue are generated. If those residues are not collected and processed immediately, they are burned or decompose — releasing carbon back into the atmosphere. Converting the biomass at this stage ensures emissions are avoided and long-term carbon storage is achieved.

This benefits farmers financially and offers multiple revenue streams. Selling biochar to industries and farmers generates product revenue and improves soil health; carbon credits add further income. Co-benefits such as higher crop yields, lower fertilizer needs, and greater water retention deliver still more return. It is a revenue model that supports India's climate commitment, increases farmers' earnings, and reduces stubble burning — cutting emissions in turn.

To work efficiently here, CAs can draw on emerging accounting standards for carbon credits in financial statements, Ind AS guidance on recognizing, measuring, and valuing credits, and sustainability reporting frames that involve biochar. It would also help to fix standards of assurance for environmental claims — areas where ICAI can take the lead in influencing national structures, as it did in adopting IFRS-based practices.

CAs are not limited to a single field. They combine an understanding of complex technical standards, a working knowledge of law, and financial shrewdness — then translate the technical into something businesses can actually use. Engineers hold the tech; lawyers hold the regulation; CAs blend all three.

They excel at financial modelling, having built countless models across industries. They are good at detecting when numbers fail to add up and at narrating financial stories that resonate with investors and boards. Compliance, for a CA, is not box-ticking but understanding why the rules exist — and every sign-off is a direct reflection of their credibility, integrity, and reputation. That credibility is built over decades of maintaining standards under the threat of real penalties for cutting corners — exactly what carbon markets need, where greenwashing and exaggerated claims are real-world problems.

Governance and risk management are areas where CAs have deep experience: they serve on audit committees, encounter real control failures, and have learned what works rather than what merely looks good on paper. They take part in all stages of project development — installing accounting systems early, building fraud controls, designing models that survive scrutiny, offering audit-ready verification, and conducting due diligence that catches issues before they become serious. That full value-chain coverage, combining financial expertise, regulatory acumen, auditing credibility, governance experience, and a cross-industry viewpoint, is uncommon in professional services.

In the biochar sector, projects must address financial modelling, assurance, compliance with carbon-market standards, and professional accountability. CAs are specifically trained in financial analysis, assurance frameworks, internal controls, and statutory responsibility — which lets them bring structure, reliability, and traceability to these engagements. This is not a marketing claim, but a reflection of how the profession is formally structured to support high-integrity climate and carbon-market projects.