Methane’s global warming potential is about 21 times greater than that of CO2. Methane is produced and emitted by landfills, during wastewater treatment, in natural gas and petroleum systems, from agricultural activities (livestock and rice cultivation), and during coal mining. Methane is basically ‘natural gas’ and can therefore be captured and used as a source of energy.
There are two types of methane projects. The first type captures and burns (flares) methane. Through combustion, methane gas is turned into less potent carbon dioxide and water. Examples of such projects include the capture and flaring of landfill gas and of coal mining gas. The second type of project captures methane and uses it to produce either hot water or electricity. Such projects include those that capture and purify methane in wastewater treatment plants or landfills and use it for electricity production or the production of another form of energy.
Biofuel plants that use agricultural or forestry waste to produce electricity also use methane: organic matter is anaerobically digested and the resulting methane is used to produce electricity. But such biofuel projects are considered renewable energy projects rather than methane capture.
It is usually quite easy to establish additionality for methane projects because there is generally no other source of revenue from the activity aside from the sale of offsets. Yet methane offset projects could potentially create disincentives to regulate landfills and agricultural emissions (e.g. from manure lagoons). Once methane capture and destruction becomes profitable, there is little incentive for project owners to support legislation that would mandate capture and destruction from all methane sources. Yet such regulation would likely cover more sources of methane, and would decrease emissions directly without generating offsets that would allow buyers to increase their emissions. In other words, the climate benefits of government regulation could be greater overall. This issue of perverse incentives that could stifle more effective regulation is not limited to methane project but holds true for many offset types.
Not all offset project types are equally effective at producing the emissions
reductions that they initially set out to deliver. Methane projects are
notorious for underperforming. CDM landfill methane projects, for example,
realize just 35% of their projected emissions reductions.