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Striking a balance with carbon credits

5. 4. 2023

Striking a balance with carbon credits

  • carbon
  • biochar
  • carbon credits

In recent months, the carbon offsetting industry has been put under heightened scrutiny after investigative journalists have shown that claims made by prominent emissions avoidance credit vendors have been highly optimistic and based on baselines that are difficult to accurately model.

Being an emerging player in the “carbon removal” sub-field of the carbon offsetting industry it seems pertinent for us at MASH Makes to share our view on the industry and its practices. Off the bat, it is worth noting that carbon removal credits are a very different class of carbon offsets than their emissions avoidance counterparts:

Emissions avoidance credits

are based on the assumption that an emission is bound to happen and that a given initiative can help combat this - e.g. protecting a forest and thereby avoiding the release of the carbon stored in the trees caused by deforestation. As the baseline is dependent on a large number of factors, including human ones, it can be very difficult to ensure that this counterfactual scenario is indeed plausible.

Carbon removal credits

are based on implementing initiatives that actively move carbon from the atmosphere to some permanent or semi-permanent, solid storage (the sink). Carbon removal in principle also needs a baseline, but unlike emissions avoidance it is often difficult to imagine that carbon absorption would have suddenly increased via some other means had the system been left to its own devices. An example of carbon removal is afforestation initiatives where forests are planted in an effort to absorb carbon dioxide from the atmosphere.


Carbon offsets can fall in both of these categories and each will have various risks associated with it:

  • Poorly defined baselines
  • Lack of relevant benchmarking
  • Changes in weather
  • Change in human factors (corruption and bureaucracy)

Before investing into a carbon offset credit, one has to thoroughly evaluate these factors and include the associated risks in one’s carbon accounting. Luckily, the risk is already reflected in the price of many credits meaning that if the credit has an elevated risk of deprecation, the price is (much) lower.
At the same time, another important feature of carbon offsetting has to be remembered - the so-called co-benefits. The “co” part is meant to imply that there are other benefits than mere carbon offsetting. As such, forest protection credits will in many cases also aid in preserving biodiversity and the livelihood of local communities. The magnitude and nature of these co-benefits will vary dramatically between types of offsets.


Direct Air Capture (DAC)

Direct air capture (DAC) is a technology that captures and stores CO2 from the atmosphere - which falls under carbon removal and is significantly different from (Point source) Carbon Capture and Storage (CCS) - which is an emissions avoidance technology. Theoretically, DAC has the potential to reduce climate change-causing emissions without any negative impacts on the environment.

There are, however, some concerns about DAC's effectiveness at reducing greenhouse gas levels and whether it can be scaled up globally enough to make an impact on global warming. The costs are high and so is the plant's energy consumption. Additionally, its status as a newly implemented technology does not provide sufficient data on whether the impact on the local communities will be positive or negative and what its actual co-benefits are.
However, once these issues are resolved, and they are being resolved as the research on the technology progresses, DAC will be more transparent, affordable and greatly effective.

Sustainable agriculture

Sustainable agriculture is a set of practices that include, but not limited to usage of no synthetic chemicals, pesticides or fertilizer, along with improved management of tillage, residues and irrigation. It also doesn't drain the soil of nutrients, which means it can be used indefinitely without harming the environment. Adopting such practices improves the overall GHG footprint of agriculture - whilst also potentially replenishing or preserving soil organic carbon (SOC).

The most important benefit of sustainable agriculture based credits is that it reduces greenhouse gas emissions by preventing deforestation, soil erosion and other harmful environmental effects caused by conventional farming methods. Additionally, the huge corporate investors participating in this type of carbon offset have to commit to the positive promotion of such farming methods, resulting in further spread and adaptation of sustainable agriculture.

The main challenges and risks associated with sustainable agriculture are measurement and verification processes. The development and continuous monitoring of such projects, along with limited credits per acre also means that the existing methodologies favor large farmers - although there are new initiatives that are enabling groups of small farmers to be covered under a single project. Justifying additionalities of such projects is also another hurdle that needs to be crossed. In addition, there are few accepted standards for measuring this type of carbon offset yet.



Afforestation is the process of planting trees on land that has never been forested before. It can help combat deforestation, provide habitats for wildlife, improve air and water quality, prevent soil erosion, and contribute to mitigating climate change by sequestering carbon dioxide from the atmosphere.

Co-benefits are for example: if you plant trees in an area where people live, there will likely be more shade and less heat stress on those living there; this will improve their quality of life and make them happier or healthier (which is good!). Additionally, planting trees around riverbeds or different bodies of water can serve as flood prevention, further improving the quality of life and protecting what would otherwise be flooded floras and faunas.

However, the aspects that need to be managed properly are how much afforestation and where. The magnitude of carbon sequestration in the new ecosystem will depend considerably on the type of soil, tree species chosen and forest management practices, but also on characteristics such as climate and moisture. Mismanaged afforestation - including monoculture and lack of sustained monitoring and upkeep - can lead to the loss of local biomes, reduced soil moisture and nutrients, and the reduction of local bio-diversification. Consequently, forest management is required long after forestation occurs.


Biochar is the solid material produced from the pyrolysis of residual biomass in an oxygen-limited environment, thereby converting the Carbon in the biomass to a recalcitrant form that resists decay. The resulting product has similar properties to traditional charcoal, but also adds nutrients to the soil and has a wide range of soil quality-improving features (soil water retention, nutrient retention, and reducing the soil density among many others)

Biochar is typically used in agriculture due to its favourable properties of increasing the water retention capability, increasing nutrient retention, improving drainage of water, maintaining the pH of soil, removing harmful toxins and increasing the carbon content of soil. This happens due to its highly porous nature and high surface area. The creation of fertile soil has the co-benefits of increasing farmer income and food security due to an increased crop yield. 

The risks of biochar are most commonly associated with the inability to scale up and the inconsistent quality of production. If the technology has limited scalability, it will not have an impact on the world’s most pressing problems.

Most of the residual bio-waste in developing countries is condemned to be worthless and burnt or left in landfills. This is because of too many smaller bulk concentrations around the globe which makes it an inefficient resource to gather due to the cost of transportation increasing with the distance.

With this in mind, MASH Makes created a model that is skipping this step entirely and making biochar more than just a viable carbon removal method.

Our SPV model enables us to reach gigaton levels of carbon removal due to its high scaling potential. This SPV model has a built-in resilience that allows for operation at different levels of complexity, depending on what makes the most sense for the site. MASH Makes will always initiate operations based on a simple model using off-the-shelf, proven technology. By doing this, MASH Makes also gets the quickest possible validation of the all-important biomass supply chain.  

Biochar created this way sequesters carbon due to the presence of highly refractory carbon that is geochemically considered to possess long-term stability. When it is combined with either manure or compost, the biochar forms a stable Carbon sink in the soil, thus exponentially lowering the chances of physical reversal. The sequestration of Carbon by biochar can then be used to generate carbon removal credits, where a biochar carbon credit represents a permanent sequestration of 1 ton of CO2 equivalent from the atmosphere for a period of at least 100 years. This permanent sequestration differs from avoidance or reduction credits as it physically stores carbon in a stable form that can be quantified, verified and tracked. Therefore, biochar-based carbon sinks are considered to be of high quality and are currently the most popular method of carbon removal in the market.

The result of the production can be used for both increasing the crop yields of already arable lands or effectively, completely reversing the land use by restoring degraded lands to make them arable, thus creating a steady stream of biomass residues that can be used to produce more biochar.


For Buyers and traders of credits

From a credit buyers’ perspective - the shift should be (and it increasingly is) towards high quality carbon removal credits. To get to Gigatonne ranges (1 Gt = 1 billion tonnes of CO2-eq), buyers should take the leap for those technologies that really have the potential to reach this scale whilst being affordable. Plateauing to a price of 100 USD/credit is a supposed sweet spot for long term carbon removals, although recent trends of the EU ETS (the single largest compliance-based GHG reduction system) touching 100 EUR and the Social Cost of Carbon being calculated at $185 says otherwise. Therefore, we think it’s important to highlight the importance for buyers to prioritise more durable carbon removal credits over temporary carbon avoidance offsets for their long-term plans to maximise the impact of their investment.

Another important factor that should not be forgotten while choosing the right offset is the co-benefits associated with the project. These co-benefits can enhance the credibility and sustainability of carbon offset projects, making them more effective in addressing climate change and promoting sustainable development by increasing the project's environmental, social, and economic impacts, leading to more significant contributions towards climate change mitigation and sustainable development.

While selling high quality and durable carbon removal credits is at the cornerstone of what we do at MASH -  we do want to ensure that the compliance market prices attract more buyers, rather than scare them off. More buyers foraying into carbon removals ensures sustained scalability of much needed technologies in this allied battle against climate change.

For any inputs or suggestions - please feel free to reach out to Jakob Andersen or Rohit Nagrgoje from MASH Makes.

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