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Coal-reliant Philippines struggles to power up clean energy

Coal-reliant Philippines struggles to power up clean energy

LAMAO – For Nestor Castro and the other residents of Lamao village, which sits near two coal-fired power plants and an oil refinery, the country’s shift to renewable energy cannot come soon enough.

Not only would it lessen the pollution in their village in the northern Philippines, it could also mean cheaper electricity, Castro said.

“Coal just adds to the pollution and we … have expensive electricity,” he told the Thomson Reuters Foundation.

But the country’s first tax hike on coal in 30 years, introduced in March, may signal a shift in the government’s attitude towards the fossil fuel, environmentalists say.

Today, the Philippines has some of the highest power generation charges in Southeast Asia according to the country’s energy agency.

Renewable energy costs are falling around the globe, 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 pushing for a shift to renewable energy.

The 400 percent 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 Viña, a former environment undersecretary and veteran climate negotiator, told the Thomson Reuters Foundation in a phone interview.

“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 percent of its coal, mostly from Indonesia and Australia, according to the Philippines-based Institute for Climate and Sustainable Cities (ICSC).

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, head of power, energy and electrification at the National Economic Development Authority.

“In terms of fuel, coal is still the cheapest. In the long run, the government will see what (renewable energy) technology will bring,” she told the Thomson Reuters Foundation.