Rockefeller Foundation Launches Initiative to Retire Coal Power Plant in the Philippines
Using Carbon Credits to Combat Climate Change
On the sidelines of COP28, the Coal to Clean Credit Initiative (CCCI) has announced its plan to retire a coal power plant in the Philippines before its natural life ends. Led by the Rockefeller Foundation, the consortium aims to use carbon credits to decommission the South Luzon Thermal Energy Corporation (SLTEC) plant in Batangas as early as 2030.
A Global Effort to Reduce Fossil Fuel Dependency
The United Nations climate talks, held in Dubai until December 12, are focused on finding solutions to reduce the world’s reliance on fossil fuels. However, there is a divide among nations on whether to prioritize emissions reduction or to cease fossil fuel production altogether. The CCCI’s initiative is a step towards incentivizing asset owners and communities to retire coal plants, reduce emissions, and create job opportunities.
A First-of-its-Kind Project
The CCCI’s project is unique in that it plans to finance the early closure of the SLTEC plant using carbon credits. The initiative is supported by Philippine energy company ACEN and the Monetary Authority of Singapore. By working with schemes like the Energy Transition Mechanism (ETM), the CCCI aims to close plants ahead of schedule using credits generated by the CO2 cuts resulting from the early closure in the Philippines.
Tighter Scrutiny of Carbon Credits
Regulators are calling for stricter scrutiny of carbon credits, as environmental groups argue that they allow the continued use of fossil fuels instead of promoting emissions reduction. The draft methodology to verify the credits generated by the CCCI’s project has been submitted for public consultation.
The Need for a Global Carbon Price
Many delegates at COP28 believe that establishing a global carbon price would be a crucial step towards addressing climate change. A higher carbon price would provide planning certainty and encourage the full conversion away from fossil fuels. However, reaching a consensus on the price has proven challenging.
Complementing the Energy Transition Accelerator
The CCCI’s initiative aligns with the Energy Transition Accelerator (ETA), which is set to launch in April. The ETA, designed by the Rockefeller Foundation and other groups, aims to accelerate the shift away from coal by utilizing funds from high-quality carbon credits. Preliminary estimates suggest that the ETA could generate over $200 billion in transition finance by 2035.
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