THE Philippines’ plans to develop its renewables industry will require an easing of land ownership restrictions currently in place for foreigners, Bain & Co. and Temasek Holdings Ltd. said in a report.

The “Southeast Asia’s Green Economy 2022: Investing behind new realities” report, prepared with the participation of Microsoft Corp., said investment will hinge on foreign companies being able to access land.

“(The government should) eliminate land restrictions for foreign firms to further facilitate foreign investment in renewables,” the report said. “It should also develop clear decarbonization targets and establish decarbonization roadmap,” it added.

The report backed the establishment of a carbon tax and emissions trading scheme, increasing renewable sourcing requirements, and removing contractual obligations to produce energy from coal.

“(The Philippines has made the) slowest progress among Southeast Asian nations towards a carbon tax. (There are) ongoing discussions over the last few years but no concrete decision and/or implementation plan,” the report said.  

The report noted that the Philippines is aiming to reduce carbon emissions by 75% by 2030, of which is 72.29% is conditional on the availability of foreign funding.

However, the report said the Philippines has not defined its net-zero target.

As a result, one challenge is that emissions may continue to rise under current policy rather than drop to meet the conditional target.

“Recent implementation of a coal power moratorium (is) encouraging. However, it is essential to also enact a moratorium on current pipeline projects and phase out all coal by 2040,” according to the report.  

In October 2020, the Energy department stopped approving new coal-fired power plants.

The report also noted improvement in Philippine policy towards electric vehicle (EV) manufacturers, though it cited the absence of incentives to spur consumer demand.

In March, the Trade department announced that it is pushing for the implementation of a zero-tariff regime for imported EVs to encourage adoption.

Bain and Temasek, the Singapore government-controlled investment firm, called the Philippine renewables sector “attractive” due to government support and capacity potential.

Some opportunities include sustainable farming via farmer service platforms that boost production with the use of digitalization; commercial and industrial solar power; onshore and offshore wind; and energy efficiency in the built environment.

They said the downsides include a lack of government advocacy and support for digital agriculture; lengthy and complex procedures for obtaining solar project permits; and the weakness of the regulatory regime. 

“With its vibrant and dynamic digital-fueled economy, Southeast Asia has tremendous potential to make a long-term, meaningful impact in the global green transition,” Temasek Chief Sustainability Officer Steve Howard said.

“The opportunities are immense, but it will take collective will, unprecedented collaboration and meaningful financing to unlock the full potential of decarbonization levers across all green investment asset classes,” he added. — Revin Mikhael D. Ochave