Citi Closes $72 Million Carbon Removal Note Backing Applied Carbon's Texas Biochar Project

Citi has closed a $72 million carbon removal-linked note to finance Applied Carbon's biochar project in Texas. Investors in the 3.5-year, principal-protected note give up traditional coupon payments, with the upfront amount going to Applied Carbon. In return, investors receive payments tied to the issuance and delivery of carbon credits from the project. Applied Carbon uses a mobile pyrolysis unit that turns agricultural crop residue into biochar in the field, combining processing and application in one pass. Microsoft signed an offtake agreement with Applied Carbon in 2022 for a portion of the project's carbon credits, which gives the structure some long-term demand backing. Citi says the note is its first outcome bond tied to verified carbon removals. The deal is a small but concrete example of using capital markets to fund durable carbon removal, though the credit quality and verification details will determine whether structures like this scale beyond a single project.