The General Framework for Carbon Credits in the Energy Sector establishes a national framework for carbon credit generation, management, and monitoring in the energy sector. It operationalises the country’s energy-sector contribution to its Nationally Determined Contribution (NDC) and sets the basis for participation in Article 6 markets, domestic compliance systems, and the voluntary carbon market (VCM). The framework defines the rules for generating Carbon Credit Certificates (CCCs) from eligible energy-related mitigation activities and authorising and accounting for Internationally Transferred Mitigation Outcomes (ITMOs).
Institutional Arrangements
- Department of Energy (DOE): The DOE is the lead agency, responsible for policy development, authorisation of CCCs adn ITMOs, monitoring, and oversight of the carbon credit framework.
- Designated National Authority (DNA): The DNA coordinates and approves participation in Article 6 cooperative approaches. The DOE must report eligible projects and CCC issuance to the DNA.
- Technical Working Group on Carbon Pricing Instruments (CPI TWG): The CPI TWG is responsible for developing national carbon pricing policies (ETS and carbon tax) that the DOE must align with.
Project Eligibility
- Eligible mitigation activities include: voluntary early retirement of coal-fired power plants; renewable-energy installation or expansion; early fossil-fuel decommissioning with RE replacement; energy-efficiency upgrades; low-carbon hydrogen, nuclear, and energy-storage projects; fuel switching or hybridization; electric-vehicle deployment; and biofuel blending.
- Ineligible mitigation activities: activities classified as unconditional NDC measures.
- The TFECC recognizes internationally accepted carbon-crediting standards (e.g., Gold Standard, Verra, ISO) and accredits validation and verification bodies.
Authorisation and Corresponding Adjustments
Conditions for Authorisation
- Unconditional NDC activities are not eligible for authorization.
- Conditional NDC activities may be authorized, provided financial additionality is demonstrated.
Corresponding Adjustments (CAs)
- Applied only to authorized ITMOs or VCM credits used for Other International Mitigation Purposes (OIMP).
- CCCs used toward the Philippines’ own NDC do not undergo CA.
- The DOE records and tags each CCC accordingly in coordination with the DNA and TFECC.
Market Participation
- Project proponents retain full ownership and transfer rights to CCCs generated by their mitigation activities.
- CCCs may be sold, traded, transferred, or retired domestically or internationally under voluntary or compliance systems.
- Under the Renewable Energy Act (2008), proceeds from CCC sales are tax-exempt.
