The Philippines’ Department of Energy (DOE) said last month that carbon trading rules are expected to be released in the middle of September, just weeks after the agency held a public consultation on a draft policy it is developing to attract investments in clean energy.
Speaking at the event in Manila last Thursday, Rose Josol, senior director for climate change and sustainability services at consultancy firm SGV & Co said that there are several carbon projects already up and running in the country despite a lack of rules governing their trade.
“We are overdue some guidance on the carbon markets as there are already multiple projects registered under the major standards,” Josol told an audience of about 150 stakeholders from corporate, civil society and academia.
“The danger we’re facing now is that these projects are up and running, [and may have to] restart their transactions [because of new guidelines].”
She cited how carbon projects in Indonesia operated under voluntary market standards without formal regulatory backing until carbon trading rules were launched in 2021. This meant that many projects had to wait for clear regulation and formal government permission to continue credit issuance.
Speakers discuss the Philippine carbon market in a panel at the Unlocking capital for sustainability conference on 28 August 2025 at the Marco Polo Hotel Ortigas in Metro Manila, Philippines. Image: Eco-Business
Wilson John Barbon, country executive director of nonprofit Conservation International Philippines said moves to finalise carbon trading rules are not premature because the Philippines is already lagging behind its Southeast Asian neighbours.
Last month, Thailand became the first Southeast Asian country that Singapore inked a carbon trading deal with under Article 6 of the Paris Agreement. It marked the eighth legally binding pact Singapore has signed for the bilateral trading of carbon credits to meet its national climate targets.
Malaysia has a voluntary carbon credit trading platform while Indonesia has established a compliance-based carbon market with emissions trading systems targeting sectors like coal power.
However, Barbon lamented that the new rules set for mid-September will only be applicable to energy transition plans, not for nature-based carbon removals, since DOE will be spearheading it.
The Department of Environment and Natural Resources (DENR) is the lead agency for developing carbon credit rules for the agriculture and forestry sectors, but it has yet to launch carbon credit rules for nature, he added.
Most climate finance globally is channelled into the energy transition, urban decarbonisation and development, but not into protecting forests, he said. In the case of the Philippines, he noted that it is driven by commitments to trade carbon credits with Southeast Asian neighbours, like its inaugural carbon deal last year with Singapore.
The Philippines is tapping carbon credits to unlock financing using transition credits, which arise from the emissions reduced through a coal plant’s early retirement and replacement with cleaner energy sources.
No new law needed to assure high integrity credits
The Philippines does not need new laws to ensure that its emission reductions and removals are real and have verifiable climate impacts, said Barbon on the same panel.
“The space for natural resources in the Philippines is already riddled with a lot of laws and safeguards that you have to comply with to be assured of high integrity [carbon credits],” he said.
For instance, he cited how forest carbon projects cannot be greenlit without going through the long process of ensuring the free, prior and informed consent of Indigenous People (IP) living in the area.
The government is also committed to global pacts like the Convention on Biological Diversity as well as women and gender, which already creates additional protection to ensure that carbon projects in the Philippines are equitable, transparent, and benefit communities and nature, he added.
At the same time, rules must address the risk of impermanence, where carbon stored or avoided by a project may be released back into the atmosphere, reversing the environmental benefits, said SGV’s Josol.
“Anyone who works in conservation knows that if you put in too many metrics, rules of quantification and qualification, you alienate many stakeholders, especially communities,” she said.
Tom van der Meulen, managing director of carbon credit certification body Control Union Philippines noted that having some standards in place is important to make projects auditable and comparable.
“The balance improves over time. The current crediting system is definitely not perfect but at least it’s an attempt to provide financial solutions to nature-based projects, which will not occur if there’s no carbon credit market,” he said.
