Breaking: Applied Carbon rakes in $21.5m Series A to sequester carbon at scale via biochar

• US-based startup Applied Carbon has raised a $21.5 million Series A for its automated machines that convert agricultural crop waste into biochar in one single pass on the field.
• Early-stage investor TO VC led the round; Congruent Ventures, Grantham Foundation, Microsoft Climate Innovation Fund, and several others also participated.
• Funding will enable Applied Carbon to deploy a fleet of biochar machines across Texas, Oklahoma, Arkansas, and Louisiana.

‘Our best shot’ for carbon dioxide removal at scale

Biochar matters because we need carbon dioxide removal (CDR) more broadly, says Applied Carbon co-founder and CEO Jason Aramburu.

“No mainstream climate scientist thinks we will ever get our emissions below 1990 levels, even in the most optimistic projections,” he tells AgFunderNews. “At some point, we have to change our tactic.”

Aramburu believes CDR provides the next best tactic, and that biochar offers the lowest-cost, most scalable way to do CDR.

“To me, biochar is our best shot to deploy CDR at scale.”

Biochar is a carbon-rich solid made by partially combusting biomass and other organic waste. While there are different types of biochar, a common characteristic across all of them is the presences of recalcitrant carbon that can last in soils for years, decades, and even millennia, according to the United States Department of Agriculture (USDA).

As a soil amendment, biochar has been around for years, but it’s only recently gained attention as a tool in the fight against climate change.

“It offers durability that greatly exceeds what’s possible with traditional carbon offsets like tree planting and cover cropping, but it does that with a cost that is really manageable,” says Aramburu. “Then it has the added benefit that it’s great for farming, it’s great for the soil.”

‘Farm equipment is literally the only thing able to process these feedstocks’

If biochar is such a promising option for CDR, why aren’t more companies working with it?

Aramburu asked the same question early on and discovered multiple reasons.

Most biochar in the US today is made from wood waste as a feedstock, he explains, and it’s mostly made in one of about 60 biomass energy plants dotted along the west coast or the southeast.

“That’s a problem because the farms where you want to use [the biochar] are in the middle of the country. That means you’ve got to move these materials, and then the bigger problem is, we just don’t have enough wood waste to use. It’s a pipe dream that we’ll get there using woody feedstock. Wood is great for proving the concept, but there’s there’s no way that can scale.”

The next obvious step for Aramburu and his team was to go directly to the aforementioned farms to use corn stover, wheat straw, sugarcane waste and other agricultural residues as biomass.

“There’s billions of tons of that stuff produced every year and it’s basically free, and there’s nothing else you can really do with it, he says, adding that use of agriculture waste for biomass seemed like a no brainer.

“We realized very quickly that there were a lot of reasons nobody was doing this.”

Agricultural biomass like corn stover or wheat straw has a low bulk density and contains a lot of silica, two things Aramburu says make it very difficult to make biochar in a continuous process.

“It’s very hard to move tons and tons of that material through any machine per hour.”

Biochar production uses a continuous pyrolysis system, which heats biomass to about 500 °C or higher in the absence of oxygen. The heat breaks down the biopolymers, while the lack of oxygen means that the biomass decomposes into biochar rather than combusting.

“We couldn’t find a single continuous pyrolysis system that was actually doing this,” says Aramburu. “And if you did invent a pyrolyzer that could run on corn stover, the transportation economics would kill you because you’d end up having to move big bales of this material to the pyrolysis plant.”

At that point, the team’s path was clear: To make biochar at scale, it needed ag waste as a feedstock. To use ag waste as a feedstock, the team would have to invent a new pyrolyzer that could operate like a piece of farm equipment.

“Today, farm equipment is literally the only thing that is able to process these feedstocks into into anything of value,” says Aramburu.

‘No one can copy us’

Applied Carbon’s resulting mobile system connects to an off-the-shelf tractor to pick up and pyrolyze biochar in a single pass on the field.

A standard forage harvester helps the tractor collect and chop the residues, which are then fed into a self-contained trailer pulled by the tractor that processes the crop residues into biochar using pyrolysis. After the biochar is cooled, the system adds nutrients and microbes to it and applies it directly onto the field. A discing implement incorporates the biochar into the soil.

Of the setup, only the tractor and the forage harvester are off the shelf, says Aramburu.

“We really believe we’re doing something unique in this space,” he adds. “We haven’t found anybody else doing this, we’ve got granted patents on our technology, and we know how hard it is to do this. Even without the patents, no one can copy us.”

‘We found a really good group of investors’

Due to the deep tech nature of Applied Carbon’s offering, raising the Series A took some time.

“It’s not like we’re building an app or we can just send someone a link to see it,” says Aramburu. “There’s quite a bit involved in demonstrating the technology to investors — I think that was the most time-consuming part. But it went well, and we found a really good group of investors.

Funding will enable Applied Carbon to deploy a fleet of biochar machines across Texas, Oklahoma, Arkansas, and Louisiana.

“Mainly the funding goes to take our technology from where it is today to something that we can scale and mass produce, and ultimately finance with equipment finance or bank debt,” says Aramburu.

The company is also working with its local ag extension to help farmers access new funding for biochar available via the USDA.

“There is big support from the USDA for biochar,” he explains. “This is the first growing season where the NRCS Practice 336 is available in 48 states, and that practice provides farmers with a per-acre subsidy to use biochar. So it pays them back for the cost of using biochar.”

“We think that could really be a game changer for biochar and could really help to spur adoption of the technology.”