Offset8, an Abu Dhabi-headquartered proprietary asset management firm and financial adviser has inked a deal to finance Singapore-based Sawa EcoSolutions’ biochar carbon credit project in Indonesia.

The asset manager has facilitated an early-stage investment in the project and intends to support Sawa with its expertise throughout the life of the project, which is estimated to generate approximately US$50 million worth of carbon credits over the next 10 years.

The biochar project made its formal debut in May 2022 and aims to tackle the harmful practice of agricultural crop-burning in Indonesia.

Sawa says the project will be developed in multiple regions across Indonesia, starting with Majalengka Regency in West Java, and expanding across Java and into Sumatra.

Historically, agricultural waste has been stored in piles and left to decay or has been burned, posing a fire hazard, contributing to respiratory health issues and leading to methane production.

In Indonesia, 45 million tonnes of agricultural crop residues are burned every year, emitting on average 2 million tonnes of carbon-dioxide equivalent annually. Sawa will convert agricultural waste into biochar, which offers a sustainable and eco-friendly solution to the waste management problem, to generate biochar carbon credits.

Biochar carbon credits represent a highly valuable type of carbon removal credits due to the potential of biochar to ensure permanent carbon sequestration for more than 100 years.

In implementing the project, Sawa will rely on the Core Carbon Principles established by the Integrity Council for the Voluntary Carbon Market.

Indonesia, the asset manager believes, has potential to play a pivotal role in global climate efforts, and the Indonesia Carbon Exchange recently launched by the Indonesia Stock Exchange is a key initiative that should enable Indonesian companies to decarbonize their businesses and to achieve their net zero goals.

“The financing of the Sawa project marks a milestone in our journey to facilitate the global transition towards a low-carbon economy,” says Ivan Mozharov and Jules Maitrepierre, Offset8 co-founders and executive directors. “By converting agricultural waste into valuable carbon credits, we are not only preventing harmful emissions, but also paving the way for Indonesia to become a leader in the global carbon market.”