The Department of Energy (DOE) said it will release a memorandum next month to set official guidelines for carbon credit trading in the country.

On the sidelines of GenZero Climate Summit Insights 2025 (Manila), Energy Undersecretary Felix Fuentebella told reporters the DOE plans to roll out the circular to help issue, manage, and monitor carbon credits.

“We plan to have the circular out and effective next month. Because if we don’t do it, the other agencies wouldn’t move forward,” he said in an ambush interview.

The DOE will issue these credits, which are expected to support the Philippines’ energy transition efforts. The Department of Environment and Natural Resources (DENR) will serve as the designated national authority for trading.

Fuentebella explained that the DOE will have a regulatory body similar to the Securities and Exchange Commission (SEC).

“It will have a standard for how a project should be recognized, as well as procedures and audit. Basically, to preserve the integrity and reliability of the market,” he said.

The credits will be traded in both domestic and international markets. Fuentebella noted that international participation will be facilitated through bilateral and multilateral agreements. The new guidelines will also align with the Paris Agreement, under which the Philippines has pledged to reduce greenhouse gas (GHG) emissions by 75 percent by 2030.

The Department of Finance (DOF) will lead a technical working group to prepare carbon pricing instruments as part of the trading process.

Within the new guidelines, carbon rights will refer to legal entitlements from approved mitigation activities in the energy sector that reduce, avoid, or remove carbon emissions. These rights, which include ownership, benefits, and risks associated with Certified Carbon Credits (CCCs), can be traded, transferred, or retired.

While the draft circular is still pending, the DENR has emphasized the growing role of market-based mechanisms, such as transition credits, in lessening the impact of fossil fuels.

During his speech at the summit, DENR Secretary Raphael P.M. Lotilla stated that the agency will oversee carbon credit projects from an environmental perspective.

“The [draft order] aims to guide the establishment, management, and monitoring of forest carbon credit projects in forest lands, protected areas, and national parks in the country,” he said.

Ayala-led ACEN Corporation also highlighted the importance of strong government-to-government (G2G) partnerships and collaboration to realize the carbon credit system envisioned under Article 6 of the Paris Agreement.

“We've made a lot of progress and milestones; obviously, the G2G agreement is a critical one,” said Eric Francia, ACEN’s president and chief executive officer. “We will do this only under Article 6 because of the high-quality, high-integrity nature of this initiative.”