Delay in formulating carbon trading regulations in the Philippines troubling to industry experts

The Philippines is making significant strides in the realm of carbon trading, with a commitment to global pacts like the Convention on Biological Diversity and women and gender pacts, providing additional protection for carbon projects in the country.

In the middle of September, the Department of Energy (DOE) plans to release carbon trading rules, aiming to regulate the energy transition plans. This move comes as a response to the growing importance of having some standards in place to make carbon projects auditable and comparable, as emphasized by Tom van der Meulen.

Despite the lack of rules governing their trade, several carbon projects are already up and running in the Philippines, according to Rose Josol, senior director for climate change and sustainability services at SGV & Co. However, Josol warns that these projects may have to restart their transactions due to the new guidelines.

One of the key benefits of having a carbon credit market is the provision of financial solutions to nature-based projects, as noted by Control Union Philippines' Tom van der Meulen. This is crucial for providing funding for projects that focus on conservation, energy efficiency, and decarbonisation, among others.

The government agencies responsible for developing carbon credit rules in the agriculture and forestry sectors are primarily the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). These agencies collaborate on policies and frameworks related to carbon market mechanisms and sustainable land use management.

However, the current carbon crediting system is not perfect, as noted by van der Meulen. One of the challenges lies in the risk of impermanence in carbon projects, where carbon stored or avoided may be released back into the atmosphere. To address this, rules must address the risk of impermanence and ensure the long-term storage of carbon.

Another concern raised by Josol is the potential for too many metrics, rules of quantification and qualification, which may alienate stakeholders, especially communities. It is essential to strike a balance between regulation and accessibility to ensure the success of carbon projects.

The Philippines already has a lot of laws and safeguards in place to ensure high integrity in carbon credits, according to Wilson John Barbon. Despite this, the country is lagging behind its Southeast Asian neighbors in terms of carbon trading rules, as mentioned by Barbon, the country executive director of Conservation International Philippines.

Notably, Thailand has become the first Southeast Asian country to sign a carbon trading deal with Singapore under Article 6 of the Paris Agreement. Meanwhile, countries like Malaysia and Indonesia have established carbon markets, with Malaysia having a voluntary carbon credit trading platform, and Indonesia having a compliance-based carbon market with emissions trading systems targeting sectors like coal power.

Forest carbon projects in the Philippines require the free, prior, and informed consent of Indigenous People (IP) living in the area. These projects are expected to be equitable, transparent, and benefit communities and nature.

In conclusion, the Philippines' move towards carbon trading is a significant step towards sustainable development and energy transition. The new rules set for mid-September by the DOE will only be applicable to energy transition plans, not for nature-based carbon removals. It is crucial to continue efforts to develop comprehensive rules for nature-based carbon removals to ensure the success of these projects and the protection of our environment.

The topics discussed in this article include carbon accounting, carbon credits, carbon trading, energy efficiency, energy intensity, energy security, financing, conservation, energy, decarbonisation, carbon offsetting, nature-based solutions, energy transition, Indigenous peoples, nature, biodiversity, and the SDGs 8 (Economic growth) and 9 (Infrastructure).

Delay in formulating carbon trading regulations in the Philippines troubling to industry experts