Economic and environmental potential of biochar: a "win-win" solution for China's straw?

Abstract

Biochar has often been described as a "win-win" technology for soil fertility, agronomic yields, carbon sequestration and poverty reduction. However, despite a growing body of physical research evidence to support these claims, there is much less socio-economic evidence for biochar's potential to achieve these "winwin" outcomes in real-world systems. Consequently, debates about biochar and its potential to contribute to sustainable development have often been polarised between extremes of opinion, with some claiming it is a key technology for mitigating climate change, and others warning of potentially dire effects for ecosystems and vulnerable populations. This inspired the objective for this PhD, which is to generate research that can inform and moderate the debate on biochar's win-win potential. Guided by the theory of ecological modernisation, this PhD aimed to generate a body of applied, policy-relevant research on the economic and environmental potential of biochar as a win-win use of biomass resources. It was important to adopt geographical and biomass boundaries for the research to provide a meaningful and focused contribution, therefore the research is focused on China and its agricultural straw residues. One of the central claims for biochar is that it can improve crop yields and, consequently, reduce poverty for smallholder farmers. This thesis investigated this from a socio-economic perspective using farm-scale linear programming models with primary data from interviews conducted across four contrasting Chinese agricultural systems. The results suggest that biochar is unlikely to provide even minor economic gains, let alone poverty-reducing change, to smallholder farmers in these systems. If biochar is not economic for farmers, there is a possibility that economies of scale made possible by business ventures could reduce the marginal costs per unit of biochar product and/or that governments/climate finance institutions may be interested in subsidising this technology where it has significant carbon mitigation impacts. Thus the next research question was whether biochar might be a profitable investment for businesses in China, and further whether businesses might also profit from carbon credits/subsidies where biochar's carbon sequestration potential is valued either by carbon markets or by climate conscious governments willing to provide appropriate incentives. Life-cycle and cost-benefit analyses demonstrated that, when compared to the main competing uses for straw feedstocks (briquetting for combustion in boilers, and gasification for electricity generation), pyrolysis of straw to produce biochar makes a financial loss under all subsidy scenarios considered, and is the least cost-effective technology for carbon sequestration. Overall it seems biochar made from China's straw feedstocks is not currently a win-win option for smallholder farmers, business investors or national/international climate mitigation strategies. In light of the relative dominance of bioenergy over biochar production as a financial and climate mitigating option for China's straw, the focus of the thesis shifts to explore win-win scenarios in this domain. Here the results are more promising. Combining a unique geographical dataset of China's coal fired powerstations and straw location with data on energy economics, the model suggests a small tweak to China's bioenergy subsidy system (an extension of the existing feed-in-tariff to include low energy replacement ratio cofiring) could contribute 42-62% of China's 2020 target to install 30GW of renewable energy generation capacity: a classic win-win scenario for the Chinese government's bioenergy targets, bioenergy investors and global climate change. Overall this thesis offers two main findings to the literature. Firstly it demonstrates that, within its current high application rate model, biochar will struggle to compete as a win-win strategy when viewed through financial and carbon sequestration lenses. However, secondly, it suggests that win-win strategies are available for China's straw resources under cofiring bioenergy applications. The thesis concludes with a critical discussion of these results in relation to the theory of ecological modernisation and the concept of win-wins.