‘Philippines needs at least $72 billion for climate action plan’

MANILA, Philippines — The Philippines will require at least $72 billion (about P4 trillion) in financing to reduce its carbon emissions and support global efforts in confronting the climate crisis.

This was what Environment Secretary Raphael Lotilla highlighted during a recent climate summit organized by investment platform GenZero.

According to Lotilla, the funding targets key sectors such as energy, transport and agriculture as part of the country’s commitment to its nationally determined contribution (NDC) under the Paris Agreement.

“Mobilizing this capital from public, private and international sources is critical to achieving the targeted reductions in greenhouse gas (GHG) emissions from these sectors,” he said.

In April 2016, the Philippines, along with 174 countries, signed the Paris Agreement, an international treaty adopted during the United Nations Climate Change Conference in 2015.

As outlined in its NDC, the Philippines has committed to reducing its GHG emissions by 75 percent by 2030.

Lotilla said the Marcos administration is set to undertake a comprehensive update of the NDC submission, incorporating strategies to accelerate the country’s transition away from fossil fuels.

“For the energy sector, updating of the NDC is aligned with the Philippine Energy Plan and focuses on policy measures that promote renewable energy and energy efficiency,” he said.

To drive more clean energy investments, the Department of Energy is developing a carbon credit policy for the power sector, aligned with the country’s climate goals.

The DOE, designated as the lead agency for the energy sector’s GHG inventory, is proposing a set of guidelines for the issuance, management and monitoring of carbon credits.

The proposed framework outlines criteria for determining the eligibility of mitigation activities, or projects and programs designed to generate and receive carbon credit certificates (CCCs).

These projects include voluntary early retirement of coal-fired power plants, renewable energy development, energy efficiency improvements, biofuel blending and adoption of electric vehicles.

A CCC, as defined by the DOE, is a tradeable certificate that represents one ton of carbon dioxide equivalent of GHG emissions reduced or removed from the atmosphere.

Such certificates can be traded or used in international and domestic compliance markets, as well as in the voluntary carbon market, according to the draft circular.

Energy Undersecretary Felix William Fuentebella said the DOE plans to release and implement the circular by next month, adding that the rate for each CCC has yet to be determined.

“If we don’t do this, other agencies won’t take action,” Fuentebella said in a recent interview.

In terms of power generation, coal still makes up the bulk of the country’s energy mix at around 63 percent, while renewables account for only about 22 percent.

To help accelerate the country’s energy transition, Ayala-led ACEN Corp. is also exploring the utilization of transition credits for the early retirement of its massive coal plant in Batangas.

The move aims to shut down the South Luzon Thermal Energy Corp. plant as early as 2030 after 25 years of operations, replacing its generation output with clean power.

“We started to divest our coal plants and basically invest everything into renewables in the Philippines,” ACEN president and CEO Eric Francia said.

As the listed energy platform of the Ayala Group, ACEN intends to fully transition to renewable power by year-end.