Pyrolysis is a combustion process of woody biomass conducted under low or no oxygen conditions. It converts any kind of biomass into biochar, bio-oil, or biogas. Hence plants’ woody material can also be converted into bioenergy products. Valorization of woody biomass in the form of energy-rich compound biochar is a more sustainable technique as compared to conventional burning which leads to toxicity to the environment. Innovations and the need to limit open burning have resulted in numerous mobile and fixed plant pyrolysis methods that burn a variety of woody residues. Production technologies that reduce the need for open burning, the main source of potential pollutants, fall under the regulations in the Clean Air Act of 1990. This Act is the legal instrument to regulate air pollution at its source across the United States of America and it is implemented and enforced through the Environmental Protection Agency, in coordination with sister agencies. One newer innovation for reducing wood residues and emissions is an air curtain incinerator. Currently, the Clean Air Act regulates stationary solid waste incinerators, and this is also applied to mobile air curtain incinerators burning woody biomass. However, other woody biochar production methods (e.g., flame cap kilns) are not subjected to these regulations. Discrepancies in the interpretation of definitions related to incineration and pyrolysis and the myriad of differences related to stationary and mobile air curtain incinerators, type of waste wood from construction activities, forest residues, and other types of clean wood make the permit regulations confusing as permits can vary by jurisdiction. This review summarizes the current policies, regulations, and directives related to in-woods biochar production and the required permits.