Indonesia may emerge as next major biochar credits producer in SE Asia after India: CMI panel

Indonesia could emerge as the next major biochar carbon credit producer in Southeast Asia after India, with substantial feedstock availability positioning the country to deliver significant carbon removal volumes, panelists said during Carbon Market Institute's Singapore Carbon Forum 2026.

Alvin Lee, head of Supply at Puro.earth, during the panel "Innovation Showcase: Scaling Finance into Carbon Removals," on Aug. 27, noted that early research indicates Indonesia has the largest potential feedstock sources in Southeast Asia.

"In this region, Indonesia could deliver very substantial amounts of biochar carbon removal within Southeast Asia," Lee said.

The panel noted that while Indonesia shows the most promise, other Southeast Asian markets are also developing biochar projects, including Thailand, Malaysia, Philippines and Cambodia.

"We're watching very closely what could be delivered further in Thailand, what new projects can come in Malaysia, etc. But if you add all those up, could it equal India? I'm not sure. India has enormous potential as well," Lee said, while commenting if any of the nations can match the pace of Biochar Carbon Credit developments in India.

Platts, part of S&P Global Energy, assessed biochar India at $130/metric ton of CO2 equivalent Aug. 28, steady day over day.

An Indonesia-based developer told Platts that Southeast Asian nations were building infrastructure around on-site operations to tackle Scope 3 emissions of companies involved with direct communities and farmers.

No differential seen at current stage

Market participants said that despite differences in feedstock availability and biomass types across Southeast Asian countries, price differentiation between nations is unlikely in the early stages of market development.

Adrien Humbert, co-founder and CEO of Circonomy, noted that the biochar market in Asia remains in its early stages, with standardization and methodology development taking priority over geographic price differentiation.

An Asia-based biochar developer said that while there are obvious differences in the biomass available in Indonesia and India, such factors will not play a major role in deciding price levels, with project size, developer track record, and offtake volumes proving more influential.

"If buyers have to differentiate, then there are other, better and major things to look at, such as co-benefits, community engagements, etc. For different biomass, such as husk and soy, the carbon content differs, but it's not that substantial," the biochar developer said.

A second Southeast Asia-based biochar developer, whose also active in India, acknowledged operational challenges with certain biomass types but said such issues would not materially affect pricing.

"I think it's harder to operate with the kind of biomass available in Indonesia. The machine tears down faster, but that is a tech issue and won't affect the prices much," the developer said.

The developer added that at this stage, the market is focused on scaling supply and building buyer confidence in permanence and Measurement, Reporting, and Verification. Geographic differentiation will likely emerge later as the market matures and specific co-benefits become more valued.

EU-ETS model eyed for Asia

Panelists also discussed the potential for integrating carbon dioxide removal into Asian compliance schemes, drawing on developments in Europe's Emissions Trading System.

Lee highlighted that the EU-ETS is accelerating efforts to integrate CDR into its system, with market participants closely watching how much CDR purchasing will occur and when.

"That works in Europe because the cost of emissions or emissions allowance price is very high, right? And there's nothing quite comparable that we can observe in this region," Lee said.

Platts assessed the EU Emission Allowance Nearest-December €82.36/mtCO2e ($95.61/mtCO2e), Aug. 28.

He suggested that Asian compliance schemes with clear carbon pricing, including Australia, Singapore, Japan and China, could introduce "high ambition sleeves" that allow a portion of compliance obligations to be met with CDR credits, rather than requiring exclusive CDR use.

Panel cited biochar as an example, noting that while Singapore's carbon tax currently sits below S$50/mtCO2e, well below biochar's cost, the technology's strong agronomic value and contribution to food security could justify its inclusion in compliance schemes.

The discussion reflects growing interest in how Asian carbon markets can incentivize high-integrity carbon removal technologies while maintaining cost-effectiveness for compliance entities, with biochar emerging as a potential bridge between removal ambition and regional agricultural co-benefits.