Recently, the Philippines has taken an important step on the path of energy transition, with the goal of accelerating the retirement of coal-fired power plants through a carbon credit program to reduce dependence on fossil fuels and strive to become a model for developing countries to move away from coal-fired power generation. However, this process has not been smooth sailing and faces many challenges and complex factors.

The Philippine government's determination to retire coal-fired power plants ahead of schedule stems from a profound understanding of environmental protection and sustainable development. As one of the main sources of carbon emissions, coal-fired power generation has had a significant impact on global climate change. Therefore, the Philippine government hopes to accelerate the retirement of coal-fired power plants, promote the optimization and transformation of the energy structure, in order to achieve the goals of the Paris Agreement and net zero emissions by 2050.

However, shutting down coal-fired power plants is not an easy task. These power plants often involve a large number of employed personnel and capital investment, and early closure will trigger social problems such as unemployment and income loss. In addition, many coal-fired power plants are also protected by long-term contracts and lack market competition pressure, resulting in a slow retirement process. According to Ke Teng, Executive Director of the Energy and Climate Team at the Rockefeller Foundation, although some countries have received billions of dollars in financing to shut down coal-fired power plants early, the results have been minimal so far.

To overcome these challenges, the Philippine government has introduced a carbon credit program, hoping to accelerate the retirement of coal-fired power plants through economic incentives. The plan, known as the Coal to Clean Credit Initiative (CCCI), aims to incentivize emerging economies to accelerate the phase out of coal-fired power plants using transformational carbon credit quotas. This plan has received support from the Philippine government and the Monetary Authority of Singapore, and both countries' public and private sectors have shown strong interest in transitioning to carbon credits.

The first target of the CCCI program is the coal-fired power plant of South Luzon Thermal Power Company in the Philippines. This power plant was originally planned to operate until at least 2040, but according to the CCCI plan, it will retire ten years earlier in 2030. This measure will avoid up to 19 million metric tons of carbon dioxide emissions and has a positive impact on environmental protection.

In order to achieve the smooth retirement of coal-fired power plants, the Philippine government also plans to replace them with renewable energy and battery storage, and provide financial support or compensation for affected workers. This measure aims to alleviate potential social issues that may arise during the retirement process and ensure a smooth transition to energy.