DOE eyes carbon credit policy for energy sector

The Department of Energy (DOE) drafted a Carbon Credit Policy aimed at helping the Philippines tap into global carbon markets while accelerating its clean energy transition.

DOE Undersecretary Felix William B. Fuentebella said the measure was a crucial turning point for the country’s energy players.

“This Carbon Credit Policy is a game-changer for the Philippine energy sector,” Fuentebella said.

“It will equip our energy sector with the tools to generate and manage carbon credits with integrity, ensuring every ton of reduced carbon dioxide is real and verifiable. This builds trust and unlocks investment in effective climate solutions,” he added.

The proposed framework seeks to attract private sector investments in renewable energy and emissions-reduction projects, establish transparent rules for credit generation and trading, and align Philippine commitments with the Paris Agreement.

To refine the draft, the DOE scheduled a public consultation on August 19 with about 120 stakeholders across the energy value chain.

Discussions will focus on roles, responsibilities, and mechanisms for implementing the policy, as well as preparing the industry to participate in future carbon markets.

The effort builds on the Philippines’ 2024 Memorandum of Understanding with Singapore on collaborating for carbon credit trading under Article 6 of the Paris Agreement, which provides for cross-border cooperation in reducing emissions.

The DOE said the Carbon Credit Policy will also complement the Philippine Energy Plan 2023–2050, which targets maximizing renewable energy potential, strengthening efficiency measures, and advancing a low-carbon and sustainable energy system.

Energy analysts said the policy could help the country monetize emission reductions while improving investor confidence in clean energy ventures.

Carbon credit markets allow companies and countries to trade verified reductions in carbon emissions, with one credit typically representing one ton of carbon dioxide reduced or removed from the atmosphere.

Globally, the value of voluntary carbon markets reached nearly USD 2 billion in 2022, according to Ecosystem Marketplace, with prices varying widely depending on project type and credibility.

For the Philippines, a credible framework could channel billions of pesos in new investments into renewable energy, forestry, and energy efficiency projects, experts noted.

The DOE said the upcoming consultation would be key to finalizing the policy before a nationwide rollout.