Japanese firms launch sewage sludge biochar project in Brazil

Tokio Marine Asset Management (TMAM) has launched a social issue-solving biochar carbon credit project in São Paulo, Brazil. It is conducted in partnership with engineering firm NIPPON KOEI and local water utility Companhia de Saneamento Básico do Estado de São Paulo (SABESP). The project converts municipal sewage sludge into biochar for agricultural soil improvement and long-term carbon sequestration.

Two pressing environmental and agricultural challenges in Brazil inspired the partnership. Following the country’s 2020 legal framework revision for sanitation, the Brazilian government established a goal to achieve a 90 per cent sewage treatment rate by 2033. As wastewater treatment capacity expands, local authorities face a sharp rise in the volume of organic sewage sludge requiring management and disposal. Meanwhile, approximately 67 per cent of land in Brazil consists of highly acidic soil with low water and nutrient retention capabilities.

TMAM and NIPPON KOEI collaborated with SABESP, which manages approximately 60 to 70 per cent of sewage treatment in São Paulo state, to address these twin issues. In 2025, the partners completed pilot-scale trials to assess sludge carbonisation. The testing verified the chemical quality of the resulting biochar, confirmed its safety and efficacy as a farm soil amendment, and validated the feasibility of generating voluntary carbon credits.

Following these trial results, the project is moving into full commercial operation. The partners are establishing an end-to-end framework that spans raw sludge supply, thermal carbonisation processing, farmland application, and the issuance and sale of carbon credits. Beyond immediate soil conditioning, the project aligns with Nature-Inclusive Disaster Risk Finance (DRF) principles by combining sanitation infrastructure, carbon markets, and natural risk mitigation. The project partners intend to explore varied financing mechanisms to expand the business model across Brazil and other international jurisdictions.