The Makati Business Club (MBC) is urging the government to streamline policies and intensify efforts to reduce landfill waste ahead of the upcoming Green Energy Auction (GEA), which will include waste-to-energy (WtE) technologies.

In a briefer, the influential business group noted major gaps that could impede WtE development, such as poor inter-agency coordination needed to secure waste feedstock, the high cost of WtE technology, and the need to boost investor confidence.

While the Department of Energy (DOE) has previously said that renewed focus on WtE could rekindle interest in passing the WtE Act (Senate Bill No. 2267), the MBC pointed out the existence of conflicting regulations.

The organization cited the Ecological Solid Waste Management Act (RA 9003), the Clean Air Act (RA 8749), the Renewable Energy Act (RA 9513), and various issuances from the DOE and the Department of Environment and Natural Resources (DENR).

“From a business perspective, the issue is not the absence of laws, but the lack of coherence,” the MBC stated. “Rules overlap, agencies interpret them differently, and implementation is uneven, leaving both investors and LGUs [local government units] hesitant.”

The group criticized the DOE, DENR, and the Department of Interior and Local Government (DILG) for "continu[ing] to act in silos," resulting in a lack of consistent guidance for LGUs. This regulatory incoherence, the MBC warned, increases investor hesitancy and could delay project implementation.

Instead of waiting for a new law, the MBC proposed a joint circular among the three agencies to immediately lessen investor and LGU compliance burdens.

Following the DOE’s October announcement of a WtE auction for Metro Manila, targeting completion by the fourth quarter of 2027, the MBC suggested a special pricing mechanism to bolster investor interest.

“Models worth considering include a feedstock cost pass-through or indexing tariffs to a benchmark like coal,” the business club noted. “Both provide predictable revenue streams that reflect the unique costs of WtE, making projects more bankable.”

The MBC also cautioned that a WtE plant can cost approximately $10 million per megawatt, a figure that flags the necessity of providing predictable revenue streams for private capital investors.

Moreover, the MBC said that the success of WtE hinges on improved LGU coordination and local waste systems, as WtE facilities rely on a steady supply from landfills.

For this reason, the group proposed closing down illegal dumpsites, implementing a landfill tax as well as creating clear tipping fee rules to stabilize supply and form the basis for long-term contracts.

The MBC added that supporting Refuse-Derived Fuel (RDF) production could serve as a practical initial step to reduce landfill waste and strengthen the groundwork for future WtE development.