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GPCCI, in collaboration with the German Embassy in Manila, successfully hosted the 2025 Sustainability Forum: The Green Economies of Tomorrow on 31 January 2025.
Planet2050 was invited to join a panel on the Nationaly Determined Contributions of the Philippines. We take the opportunity to look at what is next for the carbon markets in the Philippines.
Although the Philippines is a relatively low emitter of greenhouse gases (GHG), it has committed to an ambitious 75% (2.71% unconditional, 72.29% conditional) reduction target by 2030, with total investment costs for Nationally Determined Contribution (NDC) implementation estimated north of $72 billion. The Philippines is also set to update its NDC later this year.
The forum focused on three key themes:
the Philippines' progress in meeting its Nationally Determined Contributions (NDCs) under the Paris Agreement
the role of Green Infrastructure and Business Solutions in reducing emissions and strengthening urban resilience
the importance of Green Jobs in driving sustainable economic growth.
GPCCI President Ms. Marie Antoniette E. Mariano formally opened the event, highlighting the Chamber’s dedication to sustainability and economic transformation.
This was followed by a welcome address from German Ambassador Pfaffernoschke, who reaffirmed the strong German-Philippine partnership in advancing long-term, innovative solutions for a resilient and inclusive future.
Climate Change Commission Vice Chairperson and Executive Director Sec. Robert E.A. Borje delivered the keynote address, stressing the urgency of collective action in tackling the climate crisis. He called for mobilizing resources and strengthening partnerships to achieve climate goals, highlighting the necessity of transitioning to renewable energy, limiting global temperature rise to 1.5°C, and fostering collaboration between the public and private sectors to build a sustainable, resilient economy.
“The private and public sectors are crucial partners in this transformation. The shift to renewable energy, electric vehicles, smart cities, and sustainable agriculture are all areas where we can advance".
Sec. Borje also underscored the need to shift toward sustainable economies, innovative industries, and inclusive policies that protect natural resources, mitigate social impacts, and support vulnerable communities. Effective climate action, he emphasized, requires engagement from all stakeholders and must address workers' needs, energy access, and agricultural modernization for small farmers.
The Philippines confronts a complex array of environmental challenges, including deforestation, illegal logging and fishing, waste burning, inadequate water treatment infrastructure, limited access to renewable energy, and underdeveloped agricultural value chains
In terms of energy production, the country's reliance on fossil fuels is significant. As of 2023, coal accounted for approximately 61% of total electricity generation, while renewable energy sources contributed around 22%, which is below the global average of 39%.
The Philippines is also highly susceptible to climate-related hazards. Estimates indicate that about 60% of its land area and 74% of its population are exposed to risks such as floods, cyclones, droughts, earthquakes, tsunamis, and landslides.
At the same time, the country possesses remarkable natural and human resources. With over 7,000 islands and rich biodiversity, coupled with a skilled and motivated workforce, there is significant potential for restoration, conservation, and sustainable development.
This presents an opportunity to harness climate finance and environmental credit mechanisms in collaboration with purpose-driven organizations, local communities, and businesses. By aligning sustainability efforts with market-based solutions, the Philippines can accelerate its transition toward a more resilient, regenerative, and low-carbon future.
The carbon market in the Philippines is probably one of the least developed compared to other countries in the South-East Asia but it is catching up.
The Philippines has a very ambitious NDC target (NDC quick facts) with investment required estimated at $72 billion. The fact that 72.79% of it is conditional opens the door to more external capital, including private capital from carbon markets. Especially as international public funding is questionned, or in certain areas frozen, under the Trump administration and reductions from other governments.
The country announced its roadmap for operationalization of Article 6 at COP29 in Baku. A key area to focus for 2025 will be to look at the NDC update, and if the Philippines will effectively take a carbon market friendly approach, adopting the latest rules from the Paris Agreement Article 6 for its domestic framework and the way it will seek for financing its NDC in the future. More announcements are expected later this year, assuming at the latest for COP30.
The Philippines plans to accelerate the retirement of up to 900 MW of existing coal generation capacity by 2027. In 2023 one of the first coal plant early-retirement scheme has been announced in the Philippines. The "Coal to Clean Credit Initiative" (CCCI) will expedite the decommissioning of a 246 MW coal-fired power plant under the South Luzon Thermal Energy Corporation. The goal is to retire and transition the plant by as early as 2030, a decade ahead of the initially scheduled retirement date. This type of credits is also referred to as "transition credits".
The Department of Energy has launched the first Renewable Energy Cetificate Market through the Philippine Electricity Market Corporation (PEMC) handled by the Independent Electricity Market Operator of the Philippines (IEMOP), a non-profit organization that manages the electricity spot market and retail operations. The price will be determined by market supply and demand. IEMOP in late 2024.
Philippines signed MoUs for bilateral Article 6.2 agreements on carbon credits with Singapore and with Japan under the JCM. The country also announced at COP29 a roadmap for the operationalization of Article 6.
The Philippines has been elected in 2024 as the host country of the Board for the UN Loss and Damage Fund (L&D Fund) helping low-income countries pay for the damage caused by climate-related natural disasters.
In February 2025, the House of Representatives approved on second reading a bill establishing a carbon pricing framework for Philippine companies in a bid to meet the country’s climate targets. “The measure creates a carbon pricing framework that requires companies exceeding government-set emission targets to spend or invest in environmental sustainability projects to offset their carbon footprint,” Bohol Rep. Edgar M. Chatto, who heads the House climate change committee, told the House floor. Medium and large-sized enterprises would be required to partake in the government’s decarbonization efforts, complying with a carbon threshold to be set by the Climate Change Commission.
Finally in late February 2025, the Department of Environment and Natural Resources (DENR) launched the Philippines' National Blue Carbon Action Partnership (NBCAP), a global initiative led by the World Economic Forum's Ocean Action Agenda under the Blue Planet Fund.
More take-aways on the Green Economies Forum here and here.
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