RESERVOIR METHANE CAPTURE MECHANISM INSTRUMENT ANALYSIS

The Reservoir Methane Capture Mechanism (RMCM) is a first-of-its-kind Special Purpose Vehicle (SPV) designed to unlock public and private investment for capturing methane from the turbined waters of hydroelectric plants. The mechanism uses a 'methane capture-as-a-service' model to remove the need for initial capital expenditure by hydropower operators. The project follows a three-stage implementation: a USD 6.5 million proof-of-concept, a USD 54 million pilot phase involving five plants, and a scale-up phase targeting 273 projects with a potential capital mobilization of USD 3 billion. Revenues are generated through the sale of electricity and carbon credits, with the latter requiring the development of a new methodology via Gold Standard. At full scale, the RMCM aims to capture 217,000 tons of methane annually, avoiding 6.8 million tons of CO2e.

• The RMCM is designed as a 'methane capture-as-a-service' structure that separates asset ownership from economic benefits, allowing hydropower operators to adopt the technology without incurring initial capital expenditures.
• The implementation plan consists of three phases: a proof-of-concept (POC) requiring USD 6.5 million in grants, a pilot phase requiring USD 54 million for five projects, and a scale-up phase that could mobilize USD 3 billion for 273 projects.
• The mechanism's financial sustainability relies on two primary revenue streams: the sale of electricity in the distributed energy market and the sale of carbon credits in the voluntary market, with the latter accounting for approximately 48% of revenues in the pilot model.
• The RMCM targets a specific market in Brazil consisting of 11 hydropower plants with a total capacity of 22 GW, representing approximately 20% of Brazil's total hydropower capacity.
• At full scale, the instrument aims to capture 217,000 tons of methane per year, which is equivalent to avoiding 6.8 million tons of CO2e annually.
• The project faces significant risks due to the novelty of the technology, the need to develop a new carbon offset standard with Gold Standard, and the potential volatility of voluntary carbon markets.

APA

Climate Policy Initiative (2022). RESERVOIR METHANE CAPTURE MECHANISM INSTRUMENT ANALYSIS. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/10/RMCM-report.pdf

Chicago

Climate Policy Initiative. RESERVOIR METHANE CAPTURE MECHANISM INSTRUMENT ANALYSIS. 2022. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/10/RMCM-report.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=RESERVOIR METHANE CAPTURE MECHANISM INSTRUMENT ANALYSIS |date=September 2022 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2022/10/RMCM-report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2022reservoir, author = {{Climate Policy Initiative}}, title = {{RESERVOIR METHANE CAPTURE MECHANISM INSTRUMENT ANALYSIS}}, institution = {Climate Policy Initiative}, year = {2022}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2022/10/RMCM-report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }