Group asks govt to give incentives to EE projects
(PE2 Note: Energy reporter Lenie Lectura writes about PE2’s push before DOE regarding the broad re-classification of all EE projects as Tier III domestic market activity under the CREATE Act.)
NONPROFIT group Philippine Energy Efficiency Alliance (PE2) urged the Department of Energy (DOE) to endorse energy efficiency (EE) projects to the Bureau of Investment (BOI) for incentives.
The group told the agency to make all EE projects, strategic or otherwise, eligible for Tier III fiscal incentives as provided under Republic Act (RA) 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (Create) Act.
“PE2 hopes that DOE can still support our push before the BOI and the FIRB [Fiscal Incentives Review Board] for a universal Tier III classification of all EE projects, whether strategic or not,” PE2 President Alexander D. Ablaza said. “Otherwise, if there is a short-term need to define strategic EE for Tier III classification, PE2 believes that the value addition should not be technology-based; for technologies are rapidly evolving and cannot be captured by a static eligibility list.”
Ablaza, who is also president and CEO of Climargy Inc., further explained that “several innovative technologies do not necessarily deliver dependable energy savings.”
“Instead, we hope the DOE bases its endorsement of strategic EE on energy savings impacts, such as meeting the threshold of 25-percent energy savings measured at project boundary,” Ablaza said.
He raised PE2’s position during the second public consultation of the DOE on the agency’s draft circular on the guidelines for endorsement of EE strategic investments to the BOI for fiscal incentives.
Ablaza suggested that the clause in the circular excluding EE retrofitting and upgrading projects be removed as a qualification of strategic EE projects. However, a DOE official explained that retrofitting projects are already covered in the previously approved DOE circular for endorsement guidelines for non-strategic EE projects.
The DOE also said that PE2’s comment to reword Clause 3.3, specifically to ensure that the definition of “project proponent” be based on the legal entity that is raising the bulk of upfront project capital and exposed to investment risks, will remain open for discussion.
In response to Ablaza’s recommendation that qualifications for strategic EE projects not be technology-based, the DOE said it doesn’t intend to define or qualify strategic EE investments based on the type of innovative technology adopted.
Ablaza earlier said that the supposedly repealed Article 17 of Executive Order (EO) 226, which grants “pioneer” status to projects with technological innovation was not effective in attracting new EE incentives under the pre-Create Act policy framework.
The DOE, likewise, assured PE2 and other stakeholders that they will maintain open for discussion PE2’s suggestion for the draft DC to set guidelines for the endorsement of EE projects to other investment promotion agencies (IPAs), especially the Philippine Economic Zone Authority (PEZA).
Ablaza cited that while RA 11285 specifically mentions the BOI’s role in the granting of fiscal incentives and since the BOI coverage doesn’t cover jurisdictions of other IPAs, the DOE and the BOI should make it clear through respective guidelines how EE projects situated in the other IPA jurisdictions (e.g. PEZA zones) should be granted fiscal incentives.
