Philippines partners with ADB for clean energy transition at COP26

November 7, 2021

The Asian Development Bank (ADB) officially launched its partnership with the Philippines and Indonesia at COP26 to phase out coal plants in Southeast Asia.

An energy transition mechanism (ETM) will be implemented with the two nations, who are among the top 10 coal expansionists in the world. 

“ETM can usher in a transformation in the battle against climate change in Asia and the Pacific,” said Masatsugu Asakawa, President of ADB. 

This mechanism will consist of two multibillion-dollar funds, each aiming for the early retirement or repurposing of coal plants and generating new cleaner energy investments. 

ADB plans to work with governments of both countries to secure capital from multilateral banks and private investors to enable this approach. 

“Indonesia and the Philippines have the potential to be pioneers in the process of removing coal from our region’s energy mix, making a substantial contribution to the reduction of global greenhouse gas emissions, and shifting their economies to a low-carbon growth path,” said Asakawa.

A full implementation of the ETM in Indonesia, the Philippines, and possibly Vietnam would result in cutting the coal fleet by 50 percent for the next 10 to 15 years. This will lead to reducing up to 200 million tons of carbon dioxide per year, which is the same pollution emitted by 61 million cars.

The Philippines, also one of the most vulnerable to the climate crisis, currently sources 57percent of its power generation from coal. 

“A clean energy transition in the Philippines will create jobs, promote national growth, and lower global emissions,” said Carlos Dominguez, Finance Secretary and Chairperson-Designate of the Climate Change Commission. 

“ETM has the potential to accelerate the retirement of coal plants by at least 10 to 15 years on average,” said Dominguez who heads the Philippine delegation to COP26 in Glasgow, United Kingdom. 

At the two-week summit, leaders from governments, businesses, and civil societies convene to develop solutions to address the climate crisis, amid rising greenhouse gas emissions. 

Opposition from green groups

Civil society organizations in the Philippines and across Asia criticized the ETM for some of its provisions that would undermine just energy transition in the region. 

In a joint statement, the groups called out ADB for a lack of basis on letting coal plants operate for up to 15 years under the mechanism. 

The groups said the mechanism lacks the guarantee for renewable energy development to benefit from the retirement of coal plants, as ADB recently expressed its support for natural gas under its latest energy policy.

“ETM seems eager to bail out coal developers and their financiers, using resources that include public funds, to boot, even though many of them pursued projects aware of stranding risks and social, environmental, and climate destruction they would bring,” said Gerry Arances, Executive Director of Center for Energy, Ecology, and Development. 

He also said that the ADB has not conducted enough consultations with civil society representatives over issues such as whether electricity users will bear the costs of bailing out coal plant operators. 

The Philippines, which has the second most expensive electricity rates in Asia, experienced shortages in power supply earlier this year due to issues with the operations of baseload coal plants.

“ADB and its partners need to pursue a massive push for renewable energy and a 1.5°C-aligned plan to phase out coal and other fossil fuels, which should both be integrated into target countries’ overall energy transition plan,” he added.

Arances said that without addressing these concerns in the context of climate justice, “it risks making Filipinos and fellow climate-vulnerable peoples terribly lose the climate fight, and risks wasting crucial financial resources that could instead be bolstering the development of renewable energy in the region.”

John Leo is a Climate Tracker Virtual Fellow for COP26. He has been a citizen journalist covering climate and environmental stories since 2016.

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