Unlocking Agricultural Residue Value : A Comprehensive Cost-Benefit Analysis of Biochar Implementation

Biochar is a carbon-rich material derived from pyrolysis. Pyrolysis involves heating organic matter in a low-oxygen environment, resulting in the production of biochar, bio-oil, and syngas. Notably, biochar allows long-term soil carbon storage, with potential benefits for agricultural sustainability (e.g., productivity, reduced environmental impacts, and water retention). Furthermore, biochar technology aligns with the principles of circular economy, where organic waste represents a valuable feedstock for energy generation and carbon sequestration. Despite its potential, the widespread adoption of this technology remains a challenge. This study aims to provide economic insights regarding biochar technology implementation in northern Italy. A cost-benefit analysis was chosen to obtain a comprehensive understanding of the financial aspects behind this technology implementation, estimating the economic viability of biochar adoption into agricultural practices. Data collection regards primary and secondary sources. Costs have been collected based on the production process encompassing agricultural residues procurement (collection and transportation), feedstock pre-processing (drying and shredding), pyrolysis unit construction and operation, warehousing, application of biochar as a soil conditioner, and carbon credits certification costs. Concerning benefits assessment direct and indirect effects have been accounted. Direct economic benefits include all revenues related to product sales, hence, energy, biochar, and carbon credits trade. Indirect benefits regard the agronomical gains related to biochar application on soil, such as increased crop productivity, decrease of nitrous oxide (N2O) emissions from soil, and enhanced water retention. Results show that the type of feedstock treated and transportation distances play an important role in the economic viability of investments. Finally, a sensitivity analysis shows that large-scale production plants are more efficient and economical compared to small-scale pyrolysis units. Overall, the paper provides valuable information on the economics of biochar for the Italian agricultural sector, enabling potential advantages of capitalizing on agricultural residues while providing climate change mitigation thanks to carbon removal and renewable energy production.