Consolidation in the Biochar Industry

News comes this week of continued consolidation in the biochar industry, where Vega Biofuels has announced that it has acquired Gone Green (the exclusive reseller of Biochar Now's products). The small but growing biochar industry has seen several notable mergers recently, including The Biochar Company teaming up with Biochar Solutions. Consolidation does not seem too surprising in this industry: the International Biochar Initiative (IBI) has identified over 100 companies working on biochar, yet the IBI's survey of biochar companies reported that the industry only self-reported $2 million in total revenue in 2013 (though many survey respondents didn't include revenue estimates, and there is little public data to fact check those that did report revenues). Given that biochar seems like a product that could get commoditized very quickly, it would make sense for smaller players to consolidate to get economies of scale in production and distribution.

It will be interesting to see the degree to which the industry continues to consolidate in the next few years. Many players in the space are working on proprietary equipment and blends of biochars optimized for different crops, soil conditions, weather conditions, and input feedstocks, suggesting that the industry is still able to support smaller, niche players. But if a) players in the industry are able to sell to larger customers, and/or b) the biochar carbon offset protocol gets approved by a major compliance market, it would not be surprising to see established fertilizer producers enter into this market, driving a wave of further consolidation.