On 20 October 2026, Terraton announced its first carbon removal credits, issued by Isometric for biochar made from nut shells at EcoFix Kenya, a processor in Nanyuki. Alongside it came agreements covering up to 97,240 tonnes of removals with Climeworks Solutions, Climate Impact Partners, Carbonfuture, CUR8 and Terraset.
A month earlier, it was another company, Biochar Industrial Group (BIG), raising a $1.5 million pre-seed led by Breega, with Catalyst Fund and non-dilutive funding from Mulago Foundation.
The business model of the two companies is strikingly similar.
The pitch is simple: You have a waste stream; we (the companies) will turn it into revenue, and you will not have to pay for the machine (unless you want to). Both companies have chosen to put hard capital behind the largest asset of industrial biochar production, the part that keeps most parties hesitant to enter this market.
Does such a model help biochar scale from a good revenue optionality to a venture-scale business?
What is the proposition to the processor?
In 2025, TechCrunch described Terraton’s ambition as becoming the McDonald’s of biochar: a standardised, franchise-style package. At EcoFix, Terraton designed and financed the facility and installed the equipment and sensors. The processor owns and runs the plant using Terraton’s facility software and operating playbooks, while plant data flows to Offstream’s dMRV platform, which handles accounting and quality checks before submission to Isometric. The site went from investment decision to credits in 14 months – August 2025 to October 2026.
BIG goes one step further on the asset-side offer. According to AllAfrica’s coverage of the raise, processors supply the waste while BIG finances and operates the equipment, manages measurement and verification, and sells the credits. It targets processors generating at least 1,000 tonnes/year of suitable residue a year. BIG’s website has a calculator that spells out the default split: the processor receives 20% of credit revenue for no upfront cost, BIG takes 20%, and the machine financier takes 60%. The processor can also choose to invest in the machine, and thus take that machine financier share proportionate to their investment.
The key to scaling and bringing on partners is that both models take the capex off the processor’s books.
| Terraton | BIG | |
| Who pays for the kiln | Terraton | BIG and a machine financier |
| Who runs it | The processor, on Terraton’s software and playbooks | BIG |
| Legal title | Processor owns the biochar facility | BIG/financier by default; processor can co-own by co-investing |
| MRV and registry | Offstream dMRV; Isometric | BIG; EBC and Puro.earth |
| Processor’s share | Not disclosed | 20% of credit revenue at zero upfront cost; proportionally increases if the machine is co-financed |
| First site | EcoFix Kenya, first credits issued in Oct 2026 | Releaf’s processing plant operational since Dec 2024; first credits issued in February 2025 via Milkywire |
Why wouldn’t the processor just do this itself?
For a single processor, this is a big endevour. Financing the machinery (expensive upfront cost; BIG’s website estimates a small machine at $120,000 and a large machine at $295,200), understanding the carbon removal methodologies, registry requirements, and carbon market economics are nothing short of running a new business in itself. Also, monetizing what was once waste into a revenue line is certainly good business practice, but in this case, it stops at that.
Speaking on the Reversing Climate Change podcast, BIG co-founder Uzoma Ayogu explained that while it made sense to use Releaf Earth’s palm nut kernels for carbon revenues, the investors had backed an agri-processing business. They were uncomfortable with the capex needed to monetize biochar, and with the volatility of the carbon market. So, BIG was spun out with its own capital stack.
With that, came the opportunity of offering the same service to other processors who might not take this up on their own. A separate company also improves feedstock access, because processors with shells and husks lying around are unlikely to sell their waste to a rival’s carbon arm, but will work with a standalone biochar company. Here, scale is unlocked. That neutrality applies equally to Terraton, which is not a processor either.
This design is more attractive to a VC. A platform that sits outside any one processor can aggregate feedstock across a sector. It is the same commodity core and carbon upside logic I have argued for in nature-based projects, except the commodity core stays with the processor and the carbon business is bolted on as a plug-and-play model from a dedicated company.
Where does the asset sit relative to the equity?
The kiln is the largest capital requirement in the model, and both companies have chosen to stand behind it. The question for a VC is what capital ends up paying for it.
Terraton’s stack is already layered. It raised $11.5 million in seed equity, co-led by Lowercarbon Capital and Gigascale Capital, in August 2025. Terraset, a philanthropic revolving fund, has provided catalytic offtake, starting with a pre-purchase and now a seven-year agreement for up to 14,000 tonnes. This month, Terraton added $1.5 million of debt from HSBC Ventures and said it is structuring a $25 million pooled vehicle to finance about 20 facilities as a single portfolio, which is possible because every site uses the same design, equipment and reporting.
The venture debt is crucial because it is cheaper than equity, even though it is small against the seed round and is more likely underwritten on the strength of Terraton’s sponsors than on plant cash flows. The milestone to watch for is whether the pooled vehicle closes on asset-level terms. At that point, debt earns the asset return and Terraton’s equity keeps the margin from origination, standardization and credit sales.
BIG’s calculator shows the same intent, with 60% of credit revenue set aside for whoever finances the machine. Who that financier is changes from location to location. Terraton is working to move away from such uncertainty, building a pooled vehicle on top of venture debt.
What would venture scale actually require?
Per site, the maths is modest. Terraton CEO Kevin Gibbs told TechCrunch that a single facility can remove around 10,000 tonnes of CO₂ a year. Twenty sites at that rate is about 200,000 tonnes per year, and at $120 to $150 per tonne, roughly $24 to $30 million in annual gross credit revenue before the processor’s share. Venture returns require moving from tens of sites to hundreds, because one is unlikely to see growth in feedstock at any site – that is largely modelled as a fixed input.
Can they replicate to the required numbers? Terraton aims to bring the next sites to issued credits in ten months. Its second facility, with One Acre Fund’s Tupande in Sagana, Kenya, is being commissioned, and it has a further 28 signed MOUs. BIG is yet to publicly mention a site outside of Releaf, their first and flagship project.
The processor’s share is open to variation; BIG discloses its split, Terraton does not. This is one variable that can change to improve the economics of the two companies. However, they are not the only players in the market, or the only model. A processor that can find a local asset developer has another route to buyers, as Varaha’s industrial partner programme shows in Côte d’Ivoire, where Revata Carbon runs gasifiers on Valency’s cashew shells and Varaha handles MRV and credit sales. That outside option caps what either platform can take as their total cut.
What could break the design?
Both businesses run almost entirely on carbon credits, with biochar sold as a soil amendment as a minor line. I have argued before that revenue concentration in a nascent, volatile credit market is a real risk. Such a plug-and-play design makes the risk more tolerable than it is elsewhere. With point-source feedstock already secured by the processor partnership, the main exposures are demand and price.
The demand for carbon removals is still concentrated among a few top buyers and not as high or diversified as it should be for climate impact. Of the 97,240 tonnes in Terraton’s announcement, only about 5,240 tonnes are firm purchases from Climeworks Solutions, Climate Impact Partners and CUR8, going by Carbon Herald’s breakdown. The rest is reserved volume, Terraset’s up-to agreement and a marketing partnership with Carbonfuture. Price is a second pressure point: research on 171 biochar transactions found African-origin credits priced 26.5% below European ones, which the authors tie to buyer trust in European regulation and verification. And where the residue already has a fuel market, as palm kernel shells do, the processor’s share becomes a negotiation once credits make the waste valuable.
Looking ahead
Terraton and BIG both believe that building and holding the asset, the hardest part of industrial biochar in Africa, is where the value is defended as they offer biochar production as a bolt-on line for the vast number of agriculture processors of the continent. I will be watching how their site numbers grow, and whether an infrastructure-type financing vehicle closes once the proof-of-concepts are established. Until it does, both are infrastructure businesses carried by venture money. Once the kilns sit on cheaper capital, the equity is left holding the platform portion, and that is where the growth case for plug-and-play biochar gets made.
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