Danessa
Rivera (The Philippine Star) - August 5, 2018 - 12:00am
MANILA, Philippines —
Scrapping the incentives under the Renewable Energy Law of 2008 will further
slow down the development of clean and indigenous resources and only promote
coal-based projects, advocacy group Center for Energy, Ecology and Development
(CEED) said.
According to CEED, the
renewable energy sector has yet to feel the incentives under the RE Law.
“Although it has been
10 years since the RE Law was passed, the first subsidy under the law has only
been implemented less than four years ago. Its intended effect, which is to
kickstart RE investments, has not yet been felt,” CEED legal officer Avril de
Torres said.
Under the RE Law, only
the feed-in tariff (FIT) system, the net-metering for RE end-users and
renewable portfolio standards (RPS) have only been enforced.
In end-July, the
Department of Energy finally issued the green energy option program (GEOP)
rules that allows end-users to choose renewable energy resources for
their electricity requirements.
The agency has yet to implement the Renewable Energy Market (REM), which
functions much like the Wholesale Electricity Spot Market (WESM) but for
trading energy from renewable sources.
REM is a market for the
trading of renewable energy certificates (RECs) under the RPS.
The law also calls for
the creation of the RE trust fund, which will be used mostly for research,
development, demonstration, and promotion of RE.
“If we are serious in
pushing for RE instead of dirty energy, subsidies must be expanded, not
removed. Currently, only RE developers are granted subsidies. These in fact
must extend to and reach factories, small to medium enterprises, and
residential consumers,” de Torres said.
Under the second
package of the Tax Reform for Acceleration and Inclusion (TRAIN) Act,
incentives promoting RE development will be removed or reduced.
Among the incentives
proposed under TRAIN 2 include income tax holiday applicable only for the first
five years of commercial operations and for a period not exceeding three
years, corporate income tax rate of 15 percent based on net taxable
income, duty-free importation on raw materials and capital equipment in the
first five years, removal of the VAT incentives and special realty tax rates,
and repeal of the net operating loss carry-over, accelerated depreciation, tax
exemption on carbon credits, tax credit on domestic capital equipment and cash
incentives for missionary electrification.
“Removing these
subsidies will only make the playing field further in favor of coal, which
already enjoys incentives from the Coal Development Act, the Investment Code,
Oil Exploration and Development Act, and EPIRA. The willingness of the House to
remove these subsidies is disconcerting considering their reluctance to
increase taxes on coal in the first TRAIN package,” de Torres said.
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