The International Tracking Standard Foundation (I-TRACK Foundation) is pleased to announce the introduction of a six-month trial period, during which a wider range of generation devices in the Philippines may seek registration and issuance of I-REC(E), provided they are not participating in other renewable energy certificate (REC) programmes. These extended permissions remain subject to safeguards against double-counting and ongoing review of domestic rules pertaining to the national compliance system and associated tracking instruments.

Background on the Philippines Market Context

In November 2021, the I-TRACK Foundation implemented a pause on I-REC(E) issuance for Philippine assets commissioned in or after 2009. This decision was taken to minimize the risk of double-counting between I-REC(E) and the Philippines’ Renewable Portfolio Standards (RPS) and its associated Renewable Energy Market (REM)—a domestic registry which performs REC issuance for compliance with the national RPS. A summary of the original I-REC(E) pause in issuance and the associated rationale is available here: https://www.trackingstandard.org/update-on-the-philippines-market-release-of-the-renewable-portfolio-standard-policy-and-its-implications-for-i-rece-issuance/

Since implementing the Philippines’ pause in issuance, the I-TRACK Foundation has remained in dialogue with domestic authorities to ensure that market activity continues to uphold ownership integrity and avoid overlap with national compliance mechanisms.

What Has Changed

Several developments have taken place since the initial pause in issuance, supporting the need for a reassessment of the rules initially laid out in November 2021. The I-TRACK Foundation and the issuer for the Philippines, the Green Certificate Company (GCC), have considered the following as a part of the assessment leading up to the present announcement:

The I-TRACK Foundation received an Advisory from the Philippine Department of Energy (DOE) dated 5 April 2024, indicating that DOE does not object to the operation of voluntary REC markets or the registration of assets in voluntary systems, provided that (i) voluntary systems take responsibility for avoiding double counting, and (ii) issuance does not occur for assets that are mandatory participants under the RPS:

“The DOE interposes no objection to the issuance and trading of [voluntary market] REC for the energy output of PH-based RE facilities, provided that it shall not include the energy output covered by RPS compliance.” (DOE Advisory 2024-04-003-SEС, available at: https://legacy.doe.gov.ph/sites/default/files/pdf/announcements/RECs%20Trading%20Advisory_2024-04-003-SEC.PDF )

Several Market Participants have since provided documentation indicating that not all renewable assets commissioned in or after 2009 in the Philippines are required to participate in the REM or RPS, despite the pause in issuance covering all generation commissioned in or after 2009. Documentation submitted indicates that the REM Rules define categories of Mandatory and Voluntary actors that must or may participate in REM, and further review of such documentation has helped substantiate that there are categories of generation assets not required to issue RECs in REM. Provided that such assets are otherwise eligible to issue I-REC(E), prohibiting relevant issuance is not necessary for the avoidance of double counting, given the optional status of participation in the Philippines REM. One excerpt of text from a market participant’s communication to the I-TRACK Foundation indicates that: “REM Rules Clause 2.1.3. enumerates the categories of RE Facilities that may be registered on a voluntary basis by the Mandated Participants for RPS compliance, subject to the consent of the asset owner.” Subsequent review of the REM Rules indicates that there are, in fact, asset categories for devices commissioned after 2009 which are not required to issue RECs into the compliance system, creating opportunities for issuance of I-REC(E) from devices previously prohibited from issuing in the Philippines.

These provisions, together with the 2024 DOE Advisory confirming no objection to voluntary REC issuance for generation not used for RPS compliance, provide a basis for differentiating between mandatory and non-mandatory assets, and in turn, for expanding I-REC(E) issuance permissions under defined guardrails, on a trial basis.

Trial Framework and Timeline

Considering the above, the I-TRACK Foundation and GCC are supportive of adjusting restrictions initially put into effect in the November 2021 pause in issuance, provided they are demonstrably not at risk of double-counting attributes captured under REM.

However, given that the REM Rules and issuance structures in the Philippines make it possible for distribution utilities to register assets in REM on behalf of asset owners, a unilateral statement from asset owners may not be sufficient to credibly demonstrate that the asset will not or has not been registered by a third-party distribution utility. It is therefore necessary for I-REC(E) issuance permissions to be paired with clear confirmations from relevant entities that the asset in question is not and will not be registered in the national system.

To this end, issuance of I-REC(E) in the Philippines for devices commissioned in or after 2009 will require more evidence than a standard SF-02A – Registrant’s Declaration and SF-02C – Owner’s Declaration Letter. Entities seeking issuance of I-REC(E) in the Philippines from assets commissioned in or after 2009 may proceed to contact GCC for asset registration, provided that:

1. The asset is not mandated to participate in the RPS/REM. Registrants are advised to review the REM Rules (see section 2) to identify whether their assets are required, permitted, or prohibited from participating in REM. Only assets which are prohibited or permitted (not mandated) to participate in REM may be eligible for I-REC(E) issuance;
2. The asset is otherwise eligible under the I-REC Code for Electricity. Devices must meet all conventional requirements for I-REC(E) issuance, as defined in the relevant Code for Electricity or associated documentation; and
3. The asset owner can demonstrate that the device has not been and will not be registered in the domestic REM registry. Appropriate confirmation from either the REM registrar or the relevant distribution utility that the device has not been registered will be required as a mandatory supplementary document during the registration process.

Acceptable evidence for point 3 above may include:

• A written notification from the asset owner to the REM registrar/issuer confirming the non-mandatory status of the device, the intent of its owner or representative not to register it in REM, and an acknowledgement from the registrar/issuer of the above; or
• A comparable exchange between the asset owner and the relevant distribution utility, confirming that the asset has not been and will not be registered in the REM.

Important Note: The above must be provided to GCC during the asset registration process and must include a reply either from the REM registrar/issuer or the distribution utility. Unilateral communications from the asset owner to either the distribution utility or REM registrar without confirmation from their recipients will not be considered suitable evidence.

During the trial period, registrations will be reviewed individually. Subject to successful implementation and absence of objections from national stakeholders, GCC intends to update its Local Working Instructions (LWI) for the Philippines following the six-month window and, together with the I-TRACK Foundation, review relevant documentation.

Forward-Looking Note: The Philippines DOE has stated publicly that it is considering the future development of a domestic voluntary REC system. The I-TRACK Foundation will remain responsive to such developments and to the preferences of national actors. Given this, Registrants and Market Participants seeking to issue I-REC(E) in the Philippines are advised to review prevailing market documentation and to monitor any potential changes in issuance permissions or requirements set forth by national actors. The I-TRACK Foundation cannot make assurances on behalf of national authorities. The present trial is intended to address immediate market needs while preserving safeguards against double-counting and alignment with domestic policy.