“We are committed to a transparent and inclusive process to ensure that the policy becomes a credible and effective tool in advancing the country’s clean energy transition,” Felix William Fuentebella, energy undersecretary, told Eco-Business. “We plan to have it out mid-September.”
The department met on 19 August with 120 stakeholder representatives, including civil society leaders who questioned a move to fast track the policy even though the country has “no guidance on targets” for the carbon market.
“The country is definitely not ready to operationalise the carbon market because there is just no guiding national framework on it. While there are moves to fast track the low carbon investment bill, the fact remains that the government still does not have any decarbonisation roadmap,” said Jefferson Chua, a campaigner for watchdog Greenpeace.
Congress approved the low carbon economy bill last year, which will mandate Paris-aligned decarbonisation plans from large corporates, but it has been sitting in the Senate for over a year and has yet to be passed into law.
“
It is highly unusual that moves [for a draft carbon credits policy] are being done on the department level when everyone, even the private sector, knows that there are still critical elements missing.
Jefferson Chua, campaigner, Greenpeace
Chua also noted that a study to explore how a carbon pricing and emissions trading system would work in the Philippines, conducted by the Asian Development Bank and World Bank for the Department of Finance has yet to be released.
“It is highly unusual that moves [for a draft carbon credits policy] are being done on the department level when everyone, even the private sector, knows that there are still critical elements missing,” he added.
Cheng Pagulayan, climate justice portfolio manager of nonprofit Oxfam Pilipinas, who was present at the consultation of DOE, said officials told them that the Department of Environment and Natural Resources (DENR) has been working on a national framework on carbon credits, but civil society has yet to be consulted to review it.
“We haven’t seen any draft document on this supposed framework and they are yet to schedule consultations with concerned stakeholders. While Article 6 of the Paris Agreement has been finalised last COP29 in Baku, countries participating in this mechanism must conduct rigorous research and analysis before adopting a national policy and operationalising it,” said Pagulayan.
Countries at COP29 forged an agreement for rules for Article 6.4, a section under the Paris Agreement which lays out the foundation for countries to trade carbon credits.
Albert Magalang, DENR’s chief of climate change service, said in a previous virtual forum that market mechanisms such as carbon credits were needed to meet the country’s nationally determined contributions (NDCs).
Fuentebella noted that the country’s first memorandum of understanding for cross-border carbon credit transfers provided an “important opportunity to build capacity and confidence in international carbon market transactions under Article 6 of the Paris Agreement”. The Philippines signed its inaugural carbon credits agreement last year with Singapore, which leads Southeast Asia in its participation in international carbon markets.
An “evolving framework”
The DOE views the carbon credit policy for the energy sector not as a final product, but as an “evolving framework” that will be strengthened through continued consultations and coordination, said Fuentebella, a key figure spearheading the development and implementation of the carbon credit market in the Philippines.
“The carbon credit policy is intended precisely as a first step in providing early guidance for energy sector participation in both compliance and voluntary carbon markets,” he said.
The carbon credit policy does not establish separate or independent guidelines that would run counter to those issued by formally designated national agencies.
Fuentebella said he acknowledges the importance of aligning the policy with a broader national framework on decarbonisation. This is why the department is working with DENR, which will provide the policy framework to operationalise Article 6, and the DOF, which will inform the broader national strategy, including the possible adoption of an emissions trading or carbon tax regime.
The DOE is also coordinating with the Climate Change Commission to align with the development of the NDC implementation plan and the national greenhouse gas system which tracks and documents greenhouse gas emissions and emission reductions, he added.
