Press Releases

Salceda: LNG will “accelerate shift from coal;” House tax chair urges government policy for “LNG boom” in next three years

May 28th, 2023

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that a government policy framework that encourages liquified natural gas (LNG) investments in the country will “accelerate our shift away from coal, which will reduce emissions in the medium-term and ease energy prices.”

Salceda made the statement as the House tax committee is set to deliberate on the tax provisions of the substitute Bill to measures promoting the development of the Philippine downstream natural gas industry on Tuesday. Salceda is also one of the principal authors of the measure.

“LNG emits 50% less CO2 than coal. And it could diversify our energy portfolio, so we aren’t so concentrated on coal, which accounts for 60% of our power, so you suffer a crisis each time the price goes up,” Salceda added.

“So, I think as far as a medium-term way of avoiding emissions goes, LNG is sensible,” Salceda said.

Promote LNG boom

Salceda cited studies suggesting that up to 2038, LNG would be a sensible carbon avoidance option versus coal.

“Since these projects take 3-4 years to complete, and our tax incentives could give LNG 12-17 years, you want a boom in LNG project registrations soon.”

“That’s why I am pushing for strong time-bound incentives for LNG projects that will register over the next three or four years,” Salceda added.

Salceda adds that “during the energy transition period, if LNG is a quick way to shift to coal, then it also merits similar treatment as renewable energy on the VAT side.”

“What’s slowing down RE adoption is it takes up a lot of land to produce significant quantities of energy, it’s not baseloadable yet, and it can be unstable in some cases. LNG looks attractive when you point those out,” Salceda said.

“So, at least an incentives regime and a regulatory framework that promotes LNG development over the medium-term is, I think, good for both energy security and our environmental objectives.”

Infrastructure to promote indigenous LNG

Salceda adds that building LNG terminals and facilities “even for imported LNG” will “prepare the way for natural gas finds in our territory.”

“There remain promising prospects in the West Philippine Sea. There could be some 12 trillion cubic feet of natural gas in those waters. Once you develop the onshore facilities, the offshore exploration and extraction becomes more commercially viable,” Salceda added.

Salceda also proposes that “our LNG policy framework should prioritize indigenous gas for dispatch, subject to some exceptions.”

“If the ecosystem exists, we will be able to maximize economic benefits once more gas turns up in WPS,” Salceda said.

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