Public Commentary: The following overview presents FG Capital’s perspective on hemp-biochar carbon-removal projects. It is provided for informational purposes only and does not constitute investment advice or a solicitation.
Hemp Biochar Carbon Projects – Pyrolysis Finance & Credit Structuring
Industrial-hemp cultivation produces large volumes of lignocellulosic stalks that often have limited downstream uses. Converting this residue into high-temperature biochar via continuous pyrolysis sequesters carbon for centuries, improves soil fertility, and generates durable carbon-removal credits recognised by leading registries. FG Capital delivers the technical diligence, capital structuring, and market-access solutions required to monetise these benefits efficiently and transparently.
Project Scope
• Feedstock Logistics:
Bale collection, moisture-content control, and haulage from hemp-processing facilities.
• Pyrolysis Technology:
Continuous auger or rotary-kiln units operating at ≥600 °C with oxygen-limited conditions.
• Energy Recovery:
Utilisation of syngas and bio-oil for process heat or power generation, enhancing project economics.
• Biochar Application:
Soil-amendment protocols, horticultural blends, or engineered building materials with traceable end use.
• MRV Architecture:
Mass-balance monitoring, stable-carbon analysis (H/C org < 0.3), and third-party certification under Verra VM0044 or Puro.earth Biochar Methodology.
Advisory Framework
1 | Feasibility & Baseline Assessment
• Feedstock-supply contracts, proximate analysis, and life-cycle-assessment modelling.
2 | Capital Structuring
• Senior project loans, subordinated facilities, and sponsor equity matched to feedstock throughput and credit-issuance cadence.
• Advance credit-purchase agreements providing early-stage liquidity.
3 | Engineering Oversight
• EPC tender evaluation, performance-guarantee negotiation, and commissioning protocols ensuring ≥70 % carbon-retention efficiency.
4 | MRV & Certification
• Continuous mass-flow recording, batch-specific biochar sampling, and periodic third-party audits.
5 | Credit Monetisation
• Multi-year offtake contracts with corporate net-zero buyers; spot-sale facilitation after registry issuance.
Indicative Financial Parameters
| Metric | Hemp-Biochar Projects |
|---|---|
| CapEx (USD / t stalk annual throughput) | 400 – 650 |
| Carbon-Removal Yield (tCO 2 e / t stalk) | 0.6 – 0.8 |
| Forward Removal Credit Price (USD / t) | 80 – 120 |
| Target Equity IRR (post-tax) | 15 % – 20 % |
Representative Capital Stack
| Tier | Security Package | Cost of Capital | Typical Providers |
|---|---|---|---|
| Senior Project Debt | Pledge over pyrolysis plant, feedstock contracts, and credit proceeds | SOFR + 275 – 350 bps | Infrastructure lenders, climate-debt funds |
| Subordinated Facility | Second-ranking charge; cash-sweep covenant | SOFR + 475 – 625 bps | Private credit investors |
| Advance Credit Purchase | Delivery contract with make-good provisions | Fixed price USD 100 / t | Corporate net-zero buyers |
| Sponsor Equity | Residual cash flow | Target IRR 15 % – 20 % | Hemp processors, project developers |
Stakeholder Benefits
- Hemp Processors: Diversified revenue from biochar sales and carbon-removal credits.
- Credit Purchasers: High-durability removal credits with traceable lifecycle and co-benefits.
- Investors: Predictable cash flows supported by feedstock contracts and credit offtakes.
- Farmers & Communities: Soil-health gains, potential yield improvements, and local employment.
Engagement
Stakeholders exploring hemp-biochar opportunities are invited to engage with our advisory team. We would be pleased to discuss feasibility assessments, optimal financing structures, and robust MRV frameworks.
This document has been prepared solely for informational purposes. It does not constitute investment advice and should not be interpreted as an offer to buy or sell any security, financial instrument, or service. Independent professional guidance is recommended before acting on any information herein.
