What is Philippines's pathway to limit global warming to 1.5°C?

Current Situation

Emissions profile

Energy, the Philippines’ highest emitting sector, accounted for 58% of emissions in 2017. The Philippines has high shares of coal power generation and has a strong dependence on oil imports for its growing transport sector. More than half of the total primary energy supply is imported coal and oil, posing risks to energy security.1 Net energy imports have increased 121% over the past decade.2

Agriculture is the second largest contributor to emissions at 28%. The majority share of agriculture emissions is from rice cultivation (62%), while remaining emissions are from manure (13%), enteric fermentation (12%), synthetic fertiliser (9%) and crop residues (4%).3

The waste sector accounts for 9% of emissions, these emissions are from solid waste and waste water. The Philippines generates 35,000 tons of municipal waste of which a large portion is burned, resulting in emissions.4

Industrial processes and product use accounts for 5% of total emissions, with the bulk of these emissions from cement production. The cement industry emissions intensity (683 KgCO₂/tonne) in 2016 was higher than the world average (614 KgCO₂/tonne).5

Philippines' current GHG emissions

MtCO₂e/yr

Energy system

Energy security is a key issue in the Philippines. More than half of the total primary energy supply is imported coal and oil.6 Net energy imports have increased 121% over the past decade.7 Meanwhile, the Philippines plans to almost double fossil gas from 2019 to 2030 in power generation.6 A high reliance on imported fossil fuels creates uncontrollable economic risk as prices fluctuate, exacerbated recently by the global energy crisis, and poses risks to energy security.

The Philippines has seen some renewable energy developments, but this is outweighed by fossil fuel plans. Renewables can increase energy security by reducing import dependence and by decarbonising the power and transport sectors through sector coupling.

The Philippines’ Energy Plan (PEP 2020-2040) is carbon intensive and relies on high levels of natural gas imports and generation for the future energy mix.6 This plan is reflected in the current policy trajectory in the graph here. Natural gas additions amount to 20.8 GW by 2040, with 3.5 already installed in 2020.

The PEP aims to add 46-74 GW of renewables by 2040, amounting to 35% of power generation by 2030, and 35% to 50% by 2040. Additionally, the PEP forecasts up to a 2240% increase in solar power generation from 2020 to 2030, a large increase due to the low current levels of generation (just 1 TWh in 2020).

There are many renewable energy policies developments, but modest levels of renewable energy power generation, representing 21% in 2020 (mainly hydro). In 2022, the Department of Justice announced renewable energy investments are exempt from the 40% foreign ownership restriction that is placed on the rest of the energy sector to encourage investments.8 The Philippines has undertaken a number of electricity market reforms allowing for a competitive power market favouring renewable energy, including the Green Energy Option, renewable auctions, the Renewable Portfolio Standard, and a carve out clause for the Philippines main utility to curtail coal generation in favour of cheaper renewable energy.1

The Philippines is highly dependent on coal, and the announcement of the coal moratorium in October 2020 indicated a political shift. Despite the moratorium, committed projects were allowed to continue, and there are 2.6 GW of additional capacity to be added between 2020 to 2025, on top of the 10 GW already in place.6 To be 1.5 compatible, the moratorium needs a larger coverage to halt further capacity additions, and should be complemented with a plan to phase out existing capacity by 2035. At COP26, the Philippines announced the formation of a partnership with the Asian Development Bank for the energy transition mechanism, aiming to retire all coal plants in the next 10 to 15 years.9 This plan needs to be translated into policy.

There are at least 3 LNG terminals due to open in 2023.8 The recent expansion plans for LNG will continue import dependence, increase the Philippines’ vulnerability to global price fluctuations, and lock in fossil fuels in the energy mix, risking expensive stranded assets. The LNG industry faces many issues including a lack of transmission and distribution infrastructure, rapid falls in renewable energy prices, regulation restrictions, and power market structural changes.10 Scaling up cost-effective renewable energy would remove the need for gas expansion in the Philippines.

Recently, there has been support for nuclear energy in the country to revive the Bataan Nuclear Plant Project or small module reactors.11 Nuclear energy remains risky for a country prone to typhoons, flooding and earthquakes, and expensive compared to renewables.

Targets and commitments

Economy-wide targets

Target type

Baseline scenario target

NDC target

Unconditional NDC Target:

  • GHG emissions reduction and avoidance of 2.71% against a business-as-usual (BAU) cumulative baseline (NDC excludes LULUCF and BAU includes LULUCF).

Conditional NDC Target:

  • GHG emissions reduction and avoidance of 72.29% against a business-as-usual cumulative baseline (NDC excludes LULUCF and BAU includes LULUCF).

Market mechanisms

  • Philippines will continue to explore market mechanisms.

Long-term target

  • None.

Sectoral targets

Energy

  • 24% energy savings across all sectors by 2040.

Power

  • 35% renewable generation by 2030 and 35-50% in 2040.6

Transport

  • Current blending schedule for biofuels (2.0% biodiesel and 10% bioethonol) maintained to 2030
  • 5-10% penetration rates of electric vehicles for road transport by 2040.6

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