Production of bio-oil, gas and biochar from pyrolysis of biomass is considered a promising technology for combined production of bioenergy and recalcitrant carbon (C) suitable for sequestration in soil. Using a fast pyrolysis centrifuge reactor (PCR) the present study investigated the relation between fast pyrolysis of wheat straw at different reactor temperatures and the short-term degradability of biochar in soil. After 115 days incubation 3–12% of the added biochar-C had been emitted as CO2. On average, 90% of the total biochar-C loss occurred within the first 20 days of the experiment, emphasizing the importance of knowing the biochar labile fraction when evaluating a specific biochars C sequestration potential. The pyrolysis temperature influenced the outputs of biochar, bio-oil and syngas significantly, as well as the stability of the biochar produced. Contrary to slow pyrolysis a fast pyrolysis process may result in incomplete conversion of biomass due to limitations to heat transfer and kinetics. In our case chemical analysis of the biochars revealed unconverted cellulosic and hemicellulosic fractions, which in turn were found to be proportional with the short-term biochar degradation in soil. As these labile carbohydrates are rapidly mineralized, their presence lowers the biochar-C sequestration potential. By raising the pyrolysis temperature, biochar with none or low contents of these fractions can be produced, but this will be on the expense of the biochar quantity. The yield of CO2 neutral bio-oil is the other factor to optimize when adjusting the pyrolysis temperature settings to give the overall greatest climate change mitigation effect.