News & Updates

Patricia A. O. Bunye | Alexander James B. Tan

The Department of Energy (“DOE”) has issued Department Circular No. DC2025-09-0018 (the “Circular”), prescribing the general guidelines for the generation, management, and monitoring of carbon credits in the Philippine energy sector. The issuance implements the country’s commitments under the Paris Agreement, supports the Nationally Determined Contribution (“NDC”), and aligns national policy with cooperative mechanisms under Article 6 of the Paris Agreement.

This Circular establishes the Philippines’ first comprehensive framework for carbon credits in the energy sector.

It enables project developers and utilities to participate in both domestic and international carbon markets while upholding transparency, and commitment to the pursuit of environmental goals.

Through this measure, the DOE positions the energy sector at the forefront of the country’s transition toward a low-carbon, climate-resilient economy.

General Framework and Principles

The Circular sets out a General Framework for Carbon Credits in the Energy Sector, guided by three key principles:

1. Assistance and guidance – providing energy stakeholders with support in developing mitigation activities capable of generating Carbon Credit Certificates (“CCCs”).
2. Transparency – ensuring the effectiveness of national and international climate change mitigation efforts while ensuring environmental integrity, social safeguards, and a just energy transition.
3. Policy alignment – integrating management of CCCs with the operationalization of Article 6 engagements, voluntary carbons markets, and prospective carbon-pricing instruments.

Definition and Nature of CCCs

CCCs are tradeable certificates representing one metric ton of verified carbon-dioxide equivalent (tCO₂e) greenhouse gas (“GHG”) emissions reduced or removed by a qualifying project.
Each CCC must be real, additional, measurable, and permanent, with safeguards against double counting or reversal.

CCCs may also be designated as Internationally Transferred Mitigation Outcomes when transacted across borders in line with Article 6 of the Paris Agreement.

Eligible Mitigation Activities

Projects that may generate CCCs include:

1. Voluntary Early Retirement of Coal-Fired Power Plants;
2. Renewable Energy Development;
3. Voluntary Early Decommissioning with Renewable Energy Replacement;
4. Energy Efficiency Improvements;
5. Emerging Zero- and Low-Carbon Energy Technologies;
6. Fuel Switching, Hybridization, or Co-Firing in Power Generation;
7. Switch to Electric Vehicles;
8. Biofuels Blending; and
9. Other Mitigation Activities in the energy sector that have the potential to generate CCCs. as approved by the DOE.

Inclusion in this list does not guarantee automatic qualification. Each activity must undergo validation under a recognized carbon-crediting methodology. Activities already counted in NDC Unconditional activities are ineligible.

Carbon Rights and Market Mechanisms

Project proponents hold the full rights attached to the CCCs, including the right to use, trade, or transfer them domestically or internationally.

To preserve environmental integrity, double issuance is prohibited — a facility may generate only one type of certificate (either a CCC or a Renewable Energy Certificate).

The Circular recognizes three trading domains:

1. International Compliance Market – under Article 6, through ITMOs;
2. Domestic Compliance Market / Emissions Trading System; and
3. Voluntary Carbon Market (VCM) for private transactions.

Institutional Framework

The DOE shall constitute the Task Force on Energy Carbon Credits within three months of effectivity, which shall be a permanent body overseeing all activities pursuant to the Circular.

Effectivity

The Circular takes effect 15 days after publication in a newspaper of general circulation and registration with the UP Law Center–Office of the National Administrative Register.

Department Circular No. DC2025-09-0018  may be accessed through this link.