The Sustainability Investment Dilemma

Sustainability budgets are under pressure. While companies increasingly commit to decarbonization, CFOs demand measurable returns. If sustainability programs can’t demonstrate financial or operational benefits, they risk being deprioritized.

For companies selling commodities like cocoa, coffee, palm oil, concrete, or asphalt, investing in biochar or other carbon removal projects is unfamiliar territory. The ROI is often unclear, making it difficult to justify upfront investment.

One of the biggest factors influencing ROI is whether to sell carbon removals as offsets (e.g., to companies like Microsoft) or claim them as insets to lower the carbon footprint of their own products (e.g., for Nestlé). This choice directly impacts revenue potential, product positioning, and customer relationships.

Offsets vs. Insets: What’s the Best Path?

Selling Offsets: Carbon removals are sold as standalone credits to external buyers. This can generate high prices—some buyers, like tech companies, are willing to pay $150 per ton of CO₂ removed. However, selling offsets means giving up the ability to reduce the footprint of your own product.

Claiming Insets: Carbon removals are applied to a company’s own supply chain, reducing the product’s carbon footprint. This can unlock benefits like premium pricing, stronger customer relationships, and compliance with Scope 3 reduction targets. However, buyers may only pay $50 per ton for insets—significantly lower than offset prices.

It’s not just about price per ton—it’s about strategy. Selling offsets generates cash flow, while claiming insets can strengthen long-term customer loyalty and competitive positioning.

The Strategic ROI of Investing in Biochar & Climate Projects

For commodity suppliers, investing in carbon removal isn’t just about compliance—it’s about securing market advantage. Here’s how:

• Unlock Green Premiums: Lowering the carbon footprint of a product by 5% to 100% can create marketing and pricing advantages, especially in regulated markets.

• Strengthen Customer Dependence: Nestlé may pay less per ton for insets, but using biochar can make them more reliant on your low-carbon product, leading to stronger long-term contracts.

• Reduce Supply Chain Emissions: Companies facing Scope 3 pressure can meet decarbonization targets internally rather than buying offsets elsewhere.

• Improve Resilience via Soil Health & Yields: Biochar and agroforestry improve productivity, making them a hedge against climate-related disruptions.

Making the Right Decision for Your Business

If you’re evaluating biochar, agroforestry, or other climate projects, the decision shouldn’t be based solely on carbon prices—it should align with your commodity type, region, and customer priorities.

Our platform helps companies quantify ROI, carbon impact, and financial outcomes so they can make informed decisions. Reach out to learn how we can help future-proof your sustainability investments.