Philippines Struggles to Embrace Renewable Energy

Renewable energy costs are falling across the world, but the Philippines, up to now, has shown few signs of moving away from coal, despite ratifying the Paris Agreement to curb climate change and passing laws promoting a shift to renewable energy.

The 400% tax hike on imported coal—part of a wider package of tax reforms passed last year to help fund a major infrastructure project—could change that, environmental experts say.

“Globally, coal is a sunset industry,” Antonio La Vina, a former environment undersecretary and veteran climate negotiator, told the Thomson Reuters Foundation in a phone interview, Eco-Business reported.

“It is just being propped up by subsidies and is the only reason it is cheap in the Philippines. The coal tax signals to investors that they should invest in other energy sources because coal is no longer the preferred energy source in the country,” he added.

The Philippines imports 75% of its coal, mostly from Indonesia and Australia, according to the Philippines-based Institute for Climate and Sustainable Cities.  

Some officials say coal is needed to power the nation’s growth, including the government’s centerpiece push to build new roads, airports and mass transit systems.

“We need a continuous and stable supply of electricity, and coal is the most stable source of energy,” said Christine Danao, the head of power, energy and electrification at the National Economic Development Authority.

The Philippines, however, still has plans for more than 10,000 MW of new coal power in the pipeline, worth $20.8 billion, according to a study published by ICSC and the Institute for Energy Economics And Financial Analysis last year.

But international efforts to address climate change—including a potential flight of investor capital from dirtier fuels and the rise of ever-cheaper renewable alternatives—could mean that coal investment will not deliver the expected returns, the study said.

 “In terms of fuel, coal is still the cheapest. In the long run, the government will see what renewable energy technology will bring,” Danao said.