Philippines pushes carbon laws, energy deals with urgency

Environment Secretary Raphael “Popo” Lotilla urged Congress to prioritize climate legislation to help the Philippines meet its emission reduction goals.

Speaking at the Net Zero Carbon Alliance (NZCA) Conference 2025, Lotilla highlighted two key bills pending in Congress—the Low-Carbon Economy Investment Bill and the Carbon Rights Bill.

He noted that the Philippines has committed to a 75% reduction in greenhouse gas emissions by 2030 under its nationally determined contribution (NDC), but said the goal remains highly ambitious.

“I don’t know how many of you, even from the Net Zero Alliance, are convinced that this is a realizable goal,” Lotilla said.

The Philippines remains the only ASEAN country without a formal net zero target, which Lotilla attributed to the scale of transformation needed.

He explained that the high emissions reduction pledge was predicated on expectations of significant international climate financing—support that has not materialized.

“The motivation for setting a very high target for greenhouse gas emissions was that there will be international resources that are going to come in and support that ambitious goal. Now, since that goal was set, the expectations of international mobilization of resources has not been realized,” he said.

Lotilla said the Low-Carbon Economy Investment Bill, already passed on third reading in the previous Congress, would require large emitters to set emissions caps, prepare decarbonization plans, and invest in low-carbon technologies.

The bill also aims to establish an emissions trading system, offer clean energy incentives, and unlock global climate finance flows.

Its complement, the Carbon Rights Bill, seeks to clarify ownership of carbon credits, enabling forestry and ecosystem-based carbon projects.

“In the meantime, that the legislation is still to be adopted by Congress, this does not prevent the Executive Department from laying the groundwork for achieving the same objectives,” Lotilla said.

He cited existing initiatives like the Philippine Greenhouse Gas Inventory Management System, the 5 Million Trees Project by 2028, and the development of Philippine Carbon Regulations.

Lotilla called on the private sector to take responsibility, noting it contributes over 50% of the country’s emissions.

“The corresponding responsibility and accountability for making inroads into those emissions also lies with the private sector and the leadership that you are going to show,” he said.

Despite contributing less than 0.4% of global emissions, the Philippines faces outsize climate risks due to its geography.

Lotilla cited data showing that from 2014 to 2023, disasters displaced 43 million people in the Philippines, and typhoon-related losses reduced gross domestic product by 1.2% annually.

He warned that if left unchecked, climate change could reduce GDP by 13.6% by 2040.

Yet he remained hopeful, pointing to studies showing that two-thirds of these losses can still be avoided with urgent action.

“The Philippines must not only keep pace, we must lead by example, demonstrating credible science-based climate actions that balance economic growth with economic integrity,” Lotilla said.

“The Philippines cannot afford to wait as climate impacts, especially in our country, will not wait,” he concluded.

On the energy front, Energy Secretary Sharon Garin confirmed the Department of Energy (DOE) is developing its own carbon credit policy focused on the power sector.

“On the carbon credit policy of DOE, that’s only for energy. It doesn’t cover the rest of the carbon credit universe,” Garin said at the NZCA conference.

While the Department of Environment and Natural Resources and the Department of Finance are still finalizing a national framework, the DOE wants to act swiftly to seize trading opportunities.

“There’s already a draft, I think, with DENR and DOF because it will involve financing also. So hopefully they will finish within the year. But since there is a very specific energy, we want to go ahead para we can already deal with Singapore and Japan on the carbon credit policy that we have,” Garin said.

The DOE plan will allow utilities and energy companies to engage in international bilateral carbon deals, helping monetize emission reductions and support the country’s energy transition.

The government has previously identified carbon markets as key to financing coal plant retirements, expanding renewable energy, and improving transmission infrastructure.

As the broader framework develops to include reforestation and other sectors, the DOE’s head start could enable early benefits.

“Hopefully we’ll work it out soon with energy,” Garin said.