Most carbon-credit offtake templates were written for a different kind of counterparty: a producer with a commissioning date behind them, a verified batch or two on record, and a facility running at a known, repeatable throughput. A pre-seed biochar supplier has none of that yet. Applying the standard fixed-volume, fixed-price, take-or-pay structure to that stage doesn't protect either side — it just produces a contract that gets renegotiated, or quietly ignored, the first time reality diverges from the term sheet.
The mismatch, specifically
A conventional offtake agreement commits a buyer to a volume schedule and a supplier to deliver it, with penalties running in both directions if either side misses. That logic assumes the hard part — proving the process works, at what rate, with what feedstock variability — is already behind the supplier. At pre-seed, it isn't. Feedstock collection from a distributed base of husk, shell, and frond sources; pyrolysis unit uptime; batch-to-batch consistency in H:Corg ratio; and the lag between production and third-party verification are all still being learned, not just executed. A contract that treats those as settled facts sets a supplier up to overpromise, and sets a buyer up to hold a credit commitment against a company that may need to change its own process mid-way through fulfilling it.
What a milestone-based structure looks like instead
The alternative isn't a smaller version of the same contract — it's a different shape. Rather than a single volume commitment paid on delivery, the agreement is broken into tranches, each gated by a specific, verifiable milestone: first batch through third-party MRV, a defined number of consecutive verified batches within an agreed variance band, or a specific tonnage of CO2e issued under a named standard (Puro.earth, the Global Artisan C-Sink Standard, or equivalent). Pricing can step up tranche by tranche as the supplier de-risks — a lower rate for pre-verification "pilot offtake" volumes, a market-linked rate once verified issuance is established as routine rather than exceptional. This is closer to how early-stage venture debt or milestone-based grant disbursement already works; it simply hasn't been the default in voluntary carbon markets, where most standard paper assumes a producer already past that stage.
What this protects, for both sides
For a buyer, milestone structuring means capital isn't committed against unverified assumptions — each tranche is paid against evidence, not intent. For a supplier, it means the first agreement doesn't require claiming a delivery capacity that hasn't been demonstrated, which is the single most common way early-stage CDR suppliers damage credibility with the exact institutions they need for their next round. A smaller, honestly-scoped first agreement that is fully honored is worth more to a pre-seed supplier's track record than a larger one that requires optimistic assumptions to fulfill.
Where CocoChar stands on this today
We have not signed a volume-committed offtake agreement, and we are not presenting one as available. What we are doing is structuring discussions with prospective buyers around exactly this shape: small, verification-gated pilot tranches tied to our own batch data as it accumulates from Mandya and Hassan feedstock, rather than a headline number we cannot yet stand behind. Anyone evaluating us as a future counterparty should expect that scoping, not a spreadsheet with an aggressive multi-year volume curve attached.
A note on where market pricing sits right now
Third-party market research published this month (see our accompanying news brief) puts current carbon removal credit pricing at roughly ₹14,250 per tonne CO2e (≈US$150, converted at ≈₹95/US$1), with premium pricing reserved for high-integrity permanent removal. That is an industry-wide, indicative figure from a market report — not a CocoChar price, offer, or commitment, and we're not citing it as one. It's useful context for what "market-linked" might mean in a step-up tranche structure, and nothing more than that at our stage.
For grant bodies and offtake buyers doing diligence on early biochar suppliers: ask not just what volume a supplier says they can deliver, but what contract shape they're proposing to get there. The shape of the ask often tells you more about stage-appropriateness than the number does.