Incentives pushed for energy efficient projects

A stronger push to legislate specific incentives to develop energy efficient (EE) projects is being sought from Congress to promote investments in energysavings projects that will help reduce carbon emissions and energy usage.

In a position paper sent to the House Committee Ways & Means (CWM), Philippine Energy Efficiency Alliance (PE2) – a non-stock, non-profit organization of energy efficiency market stakeholders composed of 27 companies – is seeking new language for Sec. 20 of the Energy Efficiency and Conservation (EE&C) Bill which specifies the fiscal incentives for energy efficient projects.

This is to allow appropriate perks even with the repeal of a long-list of incentives under the second package of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

PE2 is asking the House committee to specify the type of incentives and remove reference to Executive Order 226 or the Omnibus Investment Code of 1987, whose provisions will be repealed if TRAIN 2 is passed.

“The current language of Sec 20 (Fiscal Incentives) of the EE&C Bill merely makes reference to EO 226 or the Omnibus Investment Code of 1987, which gives the Board of Investments the power to determine the appropriate incentives for EE projects. That may have been initially acceptable if TRAIN-2 was not being proposed,” PE2 president Alexander Ablaza said in an e-mail to The STAR.

“Now that TRAIN-2 is being legislated, and since the TRAIN-2 bill effectively repeals certain provisions of EO 226, it would be best to be more explicit in identifying the specific incentives for EE projects and removing all references to EO 226,” he said.

Under its proposal, PE2 is asking the House committee to identify BOI as the lead investment promotion agency to administer the fiscal incentives for EE&C projects.

It is also proposing to include all EE&C projects in the Strategic Investments Priorities Plan (SIPP) of the government in the first 15 years of the law, if passed. The projects under the SIPP will be endorsed by the Department of Energy to BOI.

“Such language expressly indicates the legislative intent to ensure the availability of incentives for energy efficiency projects over the next 15 years. Under the provision, after the lapse of 15 years, energy efficiency projects may still be eligible for inclusion in the SIPP, however, such inclusion will no longer be automatic,” Ablaza said in the position paper.

PE2 noted that the SIPP will only be introduced upon the passage of the proposed TRAIN 2.

Projects listed under SIPP are proposed to receive incentives such as a six-year income tax holiday, 10-year duty-free importation of capital equipment, and zero-rated valued added tax.