The establishment of a “decarbonization fund” will be mandated for large-scale enterprises that will exceed their carbon emissions target, as proposed in a “Low Carbon Economy” bill that recently secured approval from the House Committee on Climate Change.

The propounded “low carbon economy” legislation will primarily require businesses to chart specific targets for their decarbonization strategies. For emissions going beyond that, a specific pricing framework will be prescribed so businesses know how much they will be funneling into their own decarbonization fund.

By far, it was noted that the proposed measure has gained wide support from several legislators – primarily from House Committee on Climate Change Chairman Edgar Chatto; as well as Representatives Anna Veloso-Tuazon, Francisco Benitez, Steve Solon, Christian Yap, and Jocelyn Limkaichong; then from multiplicity of industries and businesses as well as climate advocate-groups in the country.

As reiterated by Chato, the policy will institutionalize the enforcement of a decarbonization fund if companies will exceed emission targets.

“For any emissions that exceed the targets set in the sectoral decarbonization pathways, companies will be required to allocate its own decarbonization fund. This fund can then be used by covered enterprises to invest in viable low-carbon business models,” he said.

On the fund utilization, the bill prescribes that this  can be: invested in low-carbon projects of companies that reduce emissions and generate savings; be pooled with other companies to jointly invest in low-carbon technologies, especially beneficial for smaller enterprises; or it can be allocated as equity investments in dedicated low-carbon enterprises that specialize in sustainable solutions.

In particular, the Cement Manufacturers’ Association of the Philippines (CeMAP) sounded off that the proposed law “is vital for our industry to transition effectively to a low-carbon future.”

The group emphasized since government infrastructure projects have been the biggest user of their cement products, the policy will greatly aid in mandating the production and utilization of low-carbon cement.

“This will not only enable the industry to meet its decarbonization targets but also stimulate further investment in sustainable practices,” CeMAP stressed.

According to Chatto, the propounded legislation is widely regarded as a game-changer for the Philippines, as “it not only sets a clear policy direction for decarbonization but also provides businesses with the tools and flexibility to achieve these goals in a way that supports economic growth.”

He qualified that the bill will potentially “encourage investments in low-carbon technologies that can deliver cost efficiencies for businesses while significantly reducing their environmental impact.”

The lawmaker explained that “the bill’s flexibility is designed to empower businesses to choose the most effective and economically viable path to decarbonization, whether through direct investments in their operations or by supporting broader industry-wide initiatives.”

Further, the bill provides “enabling measures to support investments in the low-carbon economy,” including those on “facilitating access to carbon markets and international climate finance, which can help de-risk investments and make them more profitable.”

Representative Jose Manuel Alba, who chaired the technical working group (TWG) in the bill’s deliberations, similarly conveyed that the measure “is not just about reducing emissions; it's about creating new opportunities for growth and innovation.”

He added that “by encouraging investments in sustainable technologies, the Philippines can lead the way in the global transition to a low-carbon economy. This is essential for our long-term economic resilience and for safeguarding our future against the devastating impacts of climate change.”

As narrated by some representatives of the Carbon Forestry Industry group, “Filipinos stand to lose the most from the impacts of climate change, and we cannot afford to miss out on the economic opportunities that the low-carbon transition presents.”

Owing to that, the group expounded that aligning the bill as a priority policy “is essential if we are to safeguard our future and seize the opportunities that come with decarbonization.”