Advance Market Commitments Today Can Build a Low-Carbon Tomorrow

The guide describes advance market commitments (AMCs) as financial mechanisms where governments or private entities guarantee the purchase of a future product to stimulate development and reduce investor risk. It outlines the essential steps for designing an AMC, including defining market boundaries, identifying eligible suppliers and buyers, and establishing standards and procurement processes. The text highlights the utility of AMCs for sectors like aviation, buildings, hydrogen, and carbon dioxide removal, while noting that they should be complemented by other policies to address infrastructure gaps.

• Advance market commitments (AMCs) function as a financial tool to encourage the development of new technologies by providing a guaranteed future market, which offers suppliers the necessary proof to secure funding from investors, lenders, and developers.
• AMCs are particularly relevant for sectors requiring strong demand signals to attract financing, specifically aviation, buildings, and emerging industries such as hydrogen and carbon dioxide removal.
• The design of a successful AMC requires defining the market boundaries (products, geography, and customer base), determining payment structures, and identifying eligible suppliers and buyers, who may be public or private entities.
• Potential risks of AMCs include the lock-in of suboptimal technologies and financial risk for purchasers of unproven technologies; these can be mitigated by defining markets based on performance outcomes and making payments contingent on product delivery.
• AMCs are not sufficient on their own to develop shared infrastructure and should be used alongside complementary policies such as industrial clusters and supply-side incentives.

APA

RMI (2026). Advance Market Commitments Today Can Build a Low-Carbon Tomorrow. https://rmi.org/resources/clean-energy-101-advance-market-commitments-today-can-build-a-low-carbon-tomorrow/

Chicago

RMI. Advance Market Commitments Today Can Build a Low-Carbon Tomorrow. 2026. https://rmi.org/resources/clean-energy-101-advance-market-commitments-today-can-build-a-low-carbon-tomorrow/.

Wikipedia

{{cite report |author=RMI |title=Advance Market Commitments Today Can Build a Low-Carbon Tomorrow |date=6 July 2026 |url=https://rmi.org/resources/clean-energy-101-advance-market-commitments-today-can-build-a-low-carbon-tomorrow/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026advance, author = {{RMI}}, title = {{Advance Market Commitments Today Can Build a Low-Carbon Tomorrow}}, institution = {RMI}, year = {2026}, month = jul, url = {https://rmi.org/resources/clean-energy-101-advance-market-commitments-today-can-build-a-low-carbon-tomorrow/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }