A coal plant near Manila, Philippines, is poised to become a model for how developing countries can transition away from fossil fuels. An initiative led by The Rockefeller Foundation plans to close the South Luzon Thermal Energy Corporation (SLTEC) a decade early, avoiding millions of tons of emissions and monetizing them as carbon credits. This project highlights the complexities of phasing out coal, which remains a cheap energy source for many developing nations.
The initiative, known as the Coal to Clean Credit Initiative (CCCI), aims to cover the costs of closing coal plants and converting them to renewable energy sources. The SLTEC was originally scheduled to operate until 2040 but is now set to close in 2030, potentially preventing up to 19 million tons of CO2 emissions. The plan includes replacing coal-fired operations with renewable energy generation and battery storage, while also providing compensation for affected workers and communities.
Despite the promise of this initiative, challenges remain. Critics point to issues with carbon credit projects, including the difficulty of proving 'additionality'—the assurance that emissions would not have been avoided without the carbon credit program. As renewable energy becomes increasingly cost-effective, there are concerns that market forces might drive coal plant closures independently of such initiatives.
With the support of the Monetary Authority of Singapore and private sector interest, the CCCI aims to create a financially viable pathway for coal plant owners to transition to cleaner energy. The methodology for this initiative is currently under review by Verra, a leading credit verifier.
This initiative could have significant implications for global climate policy, especially in regions heavily reliant on coal for energy. As countries grapple with the dual challenges of energy demand and climate change, the success or failure of the CCCI may influence future efforts to reduce carbon emissions worldwide.