The business of BIOCHAR

The problem can be called “Marketing Myopia”, and the claim was made in relation to the uptake of BioChar. Quickly scanning to understand what was meant by that term the Business Dictionary was most helpful. Marketing Myopia – A short-sighted and inward looking approach to marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customersneeds and wants. It results in the failure to see and adjust to the rapid changes in their markets.

The concept of marketing myopia was discussed in an article (titled “Marketing Myopia,” in July-August 1960 issue of the Harvard Business Review) by Harvard Business School emeritus professor of marketing, Theodore C. Levitt (1925-2006), who suggests that companies get trapped in this situation because they omit to ask the vital question, “What business are we in?” Read more: http://www.businessdictionary.com/definition/marketing-myopia.html#ixzz2lJq5Y3wT

So: What is the business of BioChar? It can elicit a number of different answers that can supply at least 11 different industries. What might change is the name that suits the industry. For instance it may be called Bio-Carbon for industrial applications, and can be called carbon black, or graphite.

Applications in industry can be:  Insulation, Air decontamination, Decontamination of earth foundations, Humidity regulation, Protection against electromagnetic radiation (“electrosmog”), Exhaust filters, Controlling emissions, Room air filters.

  • It can be part of Industrial materials: carbon fibres, plastics.
  • Its use in Electronics: Semiconductors, batteries.
  • Use in Metallurgy: Metal reduction.
  • In Cosmetics: Soaps, skin-cream, therapeutic bath additives.
  • In Paints and colouring: Food colorants, industrial paints.

In Energy production:

  • Pellets, substitute for lignite.

In Medicines:

  • Detoxification, carrier for active pharmaceutical ingredients.

In apparel and footware:

  • Fabric additive for functional underwear, Thermal insulation for functional clothing, Deodorant for shoe soles.

In sleepware:

  • Filling for mattresses, filling for pillows

For protection:

  • Shield against electromagnetic radiation.

Then for applications of decontamination and waste handling:

  • Soil additive for soil remediation (for use in particular on former mine-works, military bases, radio transmitters sites and landfill sites)
  • Soil substrates (highly adsorbing, plantable soil substrates for use in cleaning waste water; in particular urban waste water contaminated by heavy metals)
  • A barrier preventing pesticides getting into surface water (Sides of field and ponds can be equipped with 30-50 cm deep barriers made of biochar for filtering out pesticides)

Treating pond and lake water (Biochar is good for adsorbing pesticides and fertilisers, as well as for improving water aeration)

  • Use as or in a Biomass additive, Biogas slurry treatment, Active carbon filter, Pre-rinsing additive, Soil substrate for organic plant beds, Composting toilets.

Then for applications of the treatment of drinking water:

  • Use in: Micro-filters, Macro-filters in developing countries.

Then for numerous Agricultural purposes it can be used or invaluable for:

  • Silage agent, Feed additive/supplement, Litter additive, Slurry treatment, Manure composting, Water treatment in fish farming, Carbon fertiliser, Compost, Substitute for peat in potting soil, Plant protection, Compensatory fertiliser for trace elements.

But you will say some of these are activated carbon. What is the difference? According to Achim Gerlach and published in ithaka (ithaka is also the reference to the 55 uses of biochar above): “Activated carbon = biochar – Generally speaking, all activated carbons are originally biochars. Active carbons are however “activated” using acids or hydroxides or 900°C water steam. In doing so, their specific surface area increases from app. 300 m2/g to over 1000 m2/g. Activated carbon is 5 – 10 times more expensive than simple biochar, so it is possible to use 2-3 times the amount of biochar to achieve the same result – whether with regard to digestion in cattle or in a sewage treatment plant. As activated carbon is for the most part produced without adequate controls in South-East Asia or South America, the eco-balance often leaves a lot to be desired. Biochar by contrast is produced from controlled, locally grown raw materials using controlled production methods. There is no real difficulty involved in producing activated carbon from biochar.”

This still does not answer the ‘what business are we in’ question. It follows that you define your product by way of what it does. But in business it is a definition of purpose for whom the business does serve is how you tend to answer ‘what business are we in’. Now consider the question of whether your product is to be considered as sourced from a co-product, or a by-product. Looking at this logically, it could be seen that the former broadens the scope of available uses that go beyond considering it a variable price component. A by-product might not be a business, and is more likely to be treated in a similar way to waste and less likely to be refined.

If you understand business you will know that the value model assumes you will seek what the market will bear in terms of price and volumes. A by-product only seeks to dispose of the ‘waste’ at a level that mitigates the cost of production. The issue then becomes how do I guarantee a quality product if it is not priced correctly.

Therefore a successful business proposition will have the price set in terms of purpose, price of bioenergy plants and the need for the plants to be tweaked so as to be priced accordingly and as a minimum must have a value sufficiently above its inherent energy value for the use of, and, or the market intended. Why, your business customer base needs to be accommodated to broaden the available uses, and that will be more than agricultural soil amendment.

So what is the business your in? Conventional wisdom suggests you need to be “Cool”, have a willingness to collaborate with end users, understand the proposals of purchasing chars from many sources, spend as much time & effort in researching/ formulating/inoculating to get the biology balance right, and set yourself up as best practice biochar ‘finisher’.

What is a finisher? John Christy asked the same question on LinkedIn, and as best as CO2Land org can find is: A biochar ‘finisher’ is someone who augments it, packages, and distributes. All they want is a price and a place to sell to, and focus on energy production. Is there anyone doing this or willing to consider at this point. Christy continues saying “Offtake agreements are needed now in order to get the financing for these projects. Ideally we want a 20 year agreement to take a minimum amount of biochar, meeting certain criteria….or a memo of understanding would help”. Maybe, that is the tact your business can take too, to satisfy the customers need!

This post does not attempt to address the production or the farm scale platforms for biochar use other than mention some of the factors of the business that will affect how you will function as a business. Country to country the price and composition of biochar will differ. Like all product, the material inputs is important. Here in Australia we have a forestry industry that can provide feedstock from floor waste and we can calculate the manufacturing cost of biochar from that source, other countries might not have such a luxury and have other sources of feedstock materials. The point is well made by John “There is much to be done to define biochar quality, learn how to ship large quantities without significant losses”.

As a footnote references:

 

http://www.ithaka-journal.net/55-anwendungen-von-pflanzenkohle?lang=en

 

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