EACs seen as alternative for PH carbon credit market

The Philippines is considering the use of Energy Attribute Certificates (EACs) as part of its strategy to meet international climate commitments, while also addressing the challenges posed by global warming.

Former Department of Energy (DOE) Undersecretary Atty. Jay Layug said that while the country has ratified major climate agreements such as the Kyoto Protocol and the Paris Agreement, the implementation of carbon markets remains a developing concept.

“The EAC registry may be used to monitor legitimacy of carbon credits through stringent verification processes to ensure that only one certificate is issued for every amount of reduction in GHG emissions,” Layug said. 

The Paris Agreement, which superseded the Kyoto Protocol, introduced nationally determined contributions (NDCs), outlining emission reduction goals for each country. In 2020, the Philippines committed to reducing its greenhouse gas (GHG) emissions by 75%, with a significant portion of this target dependent on international support.

The concept of carbon markets, where countries and private sectors can trade carbon credits, is seen as a key tool in tackling climate change. Layug added that private-sector initiatives, such as carbon offsetting programs, have emerged globally.

Several Philippine-based corporations have also engaged in carbon credit schemes, such as the Balaoi wind project and ACEN’s solar project, which contribute to reducing GHG emissions.

Despite the global trend, the Philippines has yet to establish a carbon credit market or a system to measure GHG emissions among stakeholders. 

However, the DOE has set up a renewable energy market (REM) to facilitate the trading of renewable energy certificates (RECs). These certificates help ensure electricity suppliers meet their renewable portfolio standards by sourcing power from eligible renewable energy sources.

While carbon credits aim to cap global GHG emissions, RECs focus on shifting electricity generation from non-renewable to renewable sources.

One carbon credit is equivalent to one ton of avoided carbon dioxide or other greenhouse gas emissions, whereas one REC represents one megawatt-hour of electricity generated from renewable resources.

Layug also said that to institutionalize carbon credits in the Philippines, the passage of an enabling law would be required. In the meantime, the DOE, along with the Climate Change Commission and the Department of Environment and Natural Resources (DENR), may consider the creation of an EAC trading system.