An international coalition of financial backers, including the Rockefeller Foundation, ACEN Corporation, and the Monetary Authority of Singapore are joining together to pilot a program aimed at phasing out coal-fired power plants in the Philippines. The Coal to Clean Credit Initiative (CCCI) is beginning the project with a pilot program that will finance the transitioning of a coal power plant to clean energy by utilizing funding from the carbon market in the form of “transition credits.”
The Rockefeller Foundation states in its press release that:
“The project, the South Luzon Thermal Energy Corporation (SLTEC) coal plant, would become the world’s first coal-fired power plant to leverage carbon credits to enable its early decommissioning. While financial tools are already in place to support the early retirement of coal-fired power plants and their replacement with clean power, these are challenging to deploy in emerging markets and developing economies (EMDEs). The partners will explore the viability of an early retirement and repurpose the plant towards cleaner energy options as early as 2030, a decade ahead of its current retirement date.”
In addition to replacing the coal plant with clean energy, the program also aims to offer new pathways to employment for those who previously relied on the fossil fuels industry for their employment.
The project represents the ambitions of green finance at a global level and is similar to a concept voiced by none other than BlackRock CEO Larry Fink in 2021. The goal of the SLTEC project is to establish a blueprint with the pilot plant, then expand and apply this methodology to other coal-fired plants. However, CCCI is heavily dependent on existing voluntary carbon markets for the promulgation of their new “transition credits.” Voluntary carbon markets have faced difficulties in the past, especially concerning the validity of carbon offsets. If “transition credits” are to be widely adopted, then the world will need a clear understanding of what they are and how they work. Hopefully, the Philippines project can go a long way towards developing a robust methodology.
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