Sustainability Budgets Will Dry Up Without Measurable ROI
Companies investing in climate projects like biochar, agroforestry, and enhanced rock weathering must assess whether they generate predictable revenue and measurable co-benefits.
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 are willing to pay ~$150 per tCO₂. However, selling offsets means giving up the ability to reduce the footprint of your own product.
Claiming Insets
Carbon removals are applied to your own supply chain, reducing your product’s carbon footprint. This can unlock benefits like premium pricing, stronger customer relationships, and progress toward Scope 3 targets. Buyers may only pay ~$50 per tCO₂ for insets—significantly lower than offset prices.
It’s not just about price per ton—it’s about strategy. Offsets can drive near-term cash flow; insets can strengthen long-term customer loyalty and competitive positioning.
Quick Comparison
| Dimension | Offsets (Sell Credits) | Insets (Use Internally) |
|---|---|---|
| Typical price per tCO₂ | Higher (e.g., ~$150) | Lower (e.g., ~$50) |
| Cash flow | Near-term | Indirect/embedded in product economics |
| Product differentiation | Limited | Stronger (lower product footprint) |
| Customer relationships | Transactional | Stickier, long-term |
| Scope 3 progress | Externalized | Internal, measurable |
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:
- Unlock Green Premiums: Lowering product footprint by 5%–100% can create marketing and pricing advantages, especially in regulated markets.
- Strengthen Customer Dependence: Even if insets command a lower price per ton, integrating biochar can make key customers more reliant on your low-carbon products, supporting longer contracts.
- Reduce Supply Chain Emissions: Meet Scope 3 targets internally rather than buying offsets elsewhere.
- Improve Resilience via Soil Health & Yields: Biochar and agroforestry can boost productivity and serve as 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.
About Valorize Systems
Valorize provides comprehensive management software for organizations developing waste-to-value projects. Our end-to-end platform enables companies to develop, verify, and monetize biomass valorization programs through offsets or insets, with specialized expertise in biochar and other nature-based solutions. Operating in 10 countries across five continents, Valorize helps companies maximize both financial and environmental returns from their carbon projects.
For more information, visit ValorizeSystems.com.