ReGenEarth and RER Launch $135M Green Bond for Biochar Projects

UK sustainable firm ReGenEarth and circular economy energy company RER launched a £100 million ($134.67 million) green bond to fund the roll out of biochar technology across renewable energy farms in the United Kingdom. The scheme will add biochar systems to existing anaerobic digestion (AD) and biomass plants to improve their economic and environmental value.

The bond, provided by RER Capital PLC—a special purpose vehicle specialized in the financing of circular economy and clean technology projects—will be deployed to fund the retrofitting of biochar units in existing AD and biomass facilities. Tracing source and feedstock traceability mechanisms will be fitted into these plants, allowing greater transparency and valuation in the voluntary carbon credit marketplace.

The green bond will conform to the International Capital Market Association's (ICMA) Green Bond Principles and a 12.5 per cent fixed annual coupon and a maturity of 2030. The bond proceeds will be backed by physical assets, such as the renewable energy locations, and lent to a wholly owned subsidiary firm of ReGenEarth to implement the project.

ReGenEarth officially issued the bond at a 10 June Investor Day forum at London's Institute of Engineering & Technology. Highlights were presentations by carbon rating agency BeZero, biochar technology solutions company Onnu, and Brunel University Chemical Engineering Department on its SeaCure CO₂ capture project. The presentations highlighted the expanding role of carbon credit markets, sequestration technology, and sustainable agriculture innovation.

Biochar, a charcoal resulting from pyrolysis of organic waste, is increasingly recognized for its twin function of carbon sequestration as well as soil fertilization. Sequestering carbon for hundreds of years and combat climate change when used in soil, biochar also enhances soil fertility, water storage, and microbes' health due to porosity, enhancing farm productivity and sustainability.

The ReGenEarth bond is designed to offer investors a sustainably high-yielding exposure. Since there are few funding vehicles in the ESG category that offer both good returns and sustainability, the ReGenEarth bond offers an alternative to as competitive a space as wind and solar, where yield margins have been compressed by extreme competition. The bond structure is designed to attract investors who wish to diversify their ESG portfolio and support carbon reduction and circular economy objectives.

RER Capital PLC's participation ensures that the structure of the green bond is compliant with market standard and supported by sound governance. By tying the financing to physical assets and requiring sustainability conditions, the project aims to establish investor confidence as well as stimulate wider take-up of such climate-related financial products.

ReGenEarth is also collaborating with engineering partner Onnu in marketing the biochar installations. In addition to spearheading waste management, the installations will also increase soil resilience and agricultural productivity in the UK. The company's general strategy is in tandem with national and global action towards scaling up carbon-negative technologies in net-zero operations.

The carbon credits that emerge from the deployment of biochar would also be tradable on voluntary markets, as a further source of revenue and helping towards monetisation of the green value of the technology. As more corporate investment goes into emission offsetting, these credits are assuming economic value increasingly firmly, and traceable, verifiable schemes are required to ensure they retain credibility.
ReGenEarth and RER bond issuance is a new green finance trend where green bonds are being utilized to fund new climate solutions apart from renewable energy. With the emphasis being on biochar and carbon removal, ReGenEarth and RER are tackling a relatively underpenetrated niche of the ESG universe.

As governments and institutions across the globe are shifting to become more offensive towards net-zero targets, financial instruments such as green bonds are guaranteed to become more relevant to the transition to green infrastructure. The success of this bond program can act as a model for future asset-backed green finance programs for upcoming emerging carbon abatement technologies.

The program also represents a wider movement across the sustainable finance sector toward nature-based, measurable solutions that are both environmental paybacks and financial paybacks. As soil erosion, food security, and greenhouse gases are global priorities, such solutions as biochar are increasingly appealing to investors, scientists, and regulators alike.

ReGenEarth green bond is put forward as a viable and large-scale investment in climate action, i.e., increasing the resilience of agriculture and lowering atmospheric carbon through local action. Successful, it has the potential to trigger further investment in technologies with real environmental and economic returns, in the UK and globally. 

Source:ESG Times