The Philippines should aspire to become the first country in Asia to sell sovereign carbon credits, House Committee on Ways and Means Chairman Joey Sarte Salceda said on Friday.
Salceda said the Philippines’s entry into the sovereign carbon credit market under the 2015 Paris Agreement could be a “key accomplishment” of the Marcos administration, as “the law and the incentives are already in place for making it work” and “we should aim to be the first country in Asia, and perhaps the world, to sell sovereign carbon credits.”
He made the remarks during the signing of a Memorandum of Understanding (MOU) between the Climate Change Commission, Maharlika Carbon Technologies, LLC, and LMC Consultancy (Luntian) as the private partner. Under the MOU, the company will assist the Philippine government in setting up the registry which will link to the United Nations Framework Convention on Climate Change (UNFCCC). The MOU was signed Friday.
The set up will allow the Philippines to participate in the trading of Certified Emissions Reductions (CER), more commonly known as voluntary carbon credits, and Internationally Transferred Mitigation Outcomes (ITMOs) between countries, which includes “sovereign carbon credits.”
“In short, it sets up the foundation for us to be in the market. There is a race among developing countries to be the first to sell sovereign carbon credits in the global market, and the Philippines should be in that race. That will be a key PBBM accomplishment, if ever,” Salceda said.
Countries and companies buy carbon credits to offset their emissions and meet their targets net emission levels.
“In recent years, there has been a push towards government-backed carbon credits, as some perceive them as more credible sources of emissions reduction,” Salceda said.
Salceda, who was co-chair of the UN-established Green Climate Fund, said that the entry into the carbon credits market could “bring in an initial $14 billion worth of benefits initially to the country, in cash and in kind like climate benign technologies, which are much needed for the Philippines shift towards sustainable socioeconomic development.”
He noted that the new Public-Private Partnership (PPP) Code “will accelerate our carbon credits efforts, because it identifies carbon credits as a sovereign asset that can be subjected to PPP arrangements.”
“That means the private sector can engage in projects and partnerships with the national government that generate and package carbon credits,” Salceda added.
The lawmaker is the principal author of the PPP Code and was chair of the technical working group that drafted the measure.
“This will be very good for us, and the tax incentives also already exist for renewable energy companies who want to work with us here.”
Salceda cited Section 15 of Republic Act No. 9513, or the Renewable Energy Law, which exempts the sale of carbon emissions credits by renewable energy developers from all taxes.
“We have not been able to maximize that provision. That is why I will be working with the PPP Center, the CCC, and the DOE so that we can come up with joint guidelines on how the private sector and the government can work together on this,” Salceda said.
Salceda hopes that such initiatives “will build financing for our clean energy transition.”
“President Marcos set the tone early on in his term that he will be a Green President. Making the Philippines a pioneer in carbon credits will be a key accomplishment. It will also provide much needed financial resources for our development,” he said.