The Department of Energy (DOE) said the agency is developing a carbon credit policy for the energy sector to attract investments, reduce emissions, and help the country meet its climate goals.

In a statement on Monday, Aug. 18, the DOE said the policy aims to guide energy stakeholders, particularly the private sector, in using carbon credits and preparing for future carbon market mechanisms.

The agency said a dedicated DOE Task Force will coordinate efforts to ensure environmental integrity by promoting projects that genuinely reduce emissions, ensuring transparency in carbon credit generation and trading, and aligning with the Philippines’ commitments under the Paris Agreement.

Energy Undersecretary Felix William B. Fuentebella said that the policy is a “game-changer” for the Philippine energy sector and will equip the sector with the “tools to generate and manage carbon credits with integrity, ensuring every ton of reduced carbon dioxide is real and verifiable.”

He added that this will build trust and “unlock investment in effective climate solutions.”

To ensure an inclusive and transparent policy development process, the DOE will convene a public consultation Tuesday, Aug. 19, on the draft Department Circular outlining general guidelines for the issuance, management, and monitoring of carbon credits.

The consultation will gather feedback from around 120 representatives from various energy stakeholders to improve and finalize the draft policy. It will also clarify proposed institutional roles, responsibilities, and implementation mechanisms and promote awareness and readiness among energy stakeholders to participate in carbon markets.

The development of the policy is a proactive step towards achieving the goals of the Philippine Energy Plan 2023-2050 for a low-carbon energy future, the DOE said.
It noted that by capitalizing on the country’s renewable energy resources, the policy will incentivize clean, indigenous energy sources and promote energy efficiency for a cleaner, more resilient, and sustainable energy system for the Philippines.

In August 2024, the Philippines and Singapore signed a memorandum of understanding to collaborate on carbon credits under Article 6 of the Paris Agreement, which will facilitate the exchange of best practices for high-integrity carbon markets and identify mutually beneficial projects.

In addition to promoting a lower-carbon-emissions future, the DOE is also considering reinstating policies for the Net Metering Program to simplify and standardize the application process timeline, following President Ferdinand Marcos’ mandate to address red tape.

The program allows electricity end-users to install up to 100 kilowatt of renewable energy facilities and export excess power to the distribution utility for bill credits.

According to the DOE, the initiative aims to address consumer issues with the program, which have left some applicants facing delays due to numerous documents and prolonged approval periods before their systems are connected.

Energy Secretary Sharon Garin earlier stated that the DOE will “tear down the walls of red tape, set clear and uniform rules, and fast-track approvals so households can start generating and selling clean power without being buried in paperwork.”

The DOE has identified delays in obtaining the Certificate of Final Electrical Inspection (CFEI) and Electrical Permits from local government units (LGUs) as a primary cause of the holdup. The agency noted that these permits, intended to ensure electrical safety, are “often held up by additional, non-essential requirements that have no direct relevance to electrical compliance.”

To streamline the process, the DOE has met with the Energy Regulatory Commission (ERC), Department of the Interior and Local Government (DILG), National Electrification Administration (NEA), and Manila Electric Co. (Meralco).

Meralco also pledged to support the initiative through digitalization efforts, as well as the accreditation of solar PV installers and the standardization of solar equipment. There are currently 17,175 users under the net metering program, with a total of 157 MW of aggregated installed capacity.