Policy Alignment Needed to Support Low-Carbon Technologies in the Philippines’ Food Cold Chain

CCI-Hub Article Image, Policy Alginment

The Philippines today is beginning to see unprecedented growth in the adoption of low-carbon technologies for the food cold chain industry.

This is being driven by an acceleration of new ideas and innovation aimed at addressing the climate crisis.

The government should take advantage of this momentum and match it by coming up with policy reforms, targets and updated standards, following this industry’s growth pace.

In addition, there is huge potential to fundamentally transform the Philippines’ distribution system of essential goods, be it food or vaccines.

As a developing economy, the cold chain remains underdeveloped and therefore presents an opportunity for the entire sector to leapfrog into low-carbon technologies.

Decoupling Cold Chain from Emissions

Although the economy has been slowed by COVID-19, the cold chain sector is still projected to expand. Energy demand will increase as the economy bounces back, but economic recovery can be decoupled from activities that increase greenhouse gas emissions.

This can be done through synergistic initiatives among government agencies, the private sector and other key stakeholders and will entail a multi-stakeholder and “whole of government” approach since most policies affecting the country’s shift to low-carbon development remain fragmented.

In terms of climate ambitions, the Climate Change Act of 2009 is the country’s legislative framework, while the National Climate Change Action Plan (NCCAP) provides a blueprint for priority areas such as food security.

The NCCAP also highlights “Climate-Smart Industries and Services” which are being pursued in partnership with the private sector to create green jobs.

In terms of food security, the NCCAP highlights the importance of climate-smart agriculture — but it fails to account for the supply chain infrastructure needs that will link agricultural products to urban centers.

This reflects how the distribution and cold chain sector has been neglected over the years and how the country’s climate efforts across sectors are disjointed, and need to be harmonized.

In recent years, new policies are presenting opportunities to fill these gaps, but more alignment across agencies are needed to address them.

Tax and Energy Efficiency Incentives for Cold Chain Technologies

There are two newly created laws that define the development of the cold chain industry in the Philippines.

One is Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Law for short).

The CREATE Law presents a menu of incentives that will cover various sectors including the cold chain with special provisions for businesses using low-carbon technologies.

The other is Republic Act No. 11285 or the Energy Efficiency and Conservation Act. This law requires energy utilization reporting with the goal of promoting energy-efficient technologies, especially in energy intensive sectors such as the cold chain.

In terms of synergy among government agencies and the private sector, the “Palamigan ng Bayan” project is showcasing the potential benefits of cold chain development for strengthening food security as well as local economic development — a feat worthy to be replicated and upscaled.

The project is being jointly implemented by the Department of Transportation, Department of Agriculture and Department of Energy.

The “Global Partnership for Improving the Food Cold Chain in the Philippines”

There are also various initiatives by international development organizations that support government efforts in pursuing low-carbon development.

This includes our project — the “Global Partnership for Improving the Food Cold Chain in the Philippines” or FCC for short.

One of the goals of the FCC project is to facilitate the adoption of policy measures promoting the use of low-carbon and energy-efficient technologies in the food cold chain sector.

In line with this, we held an online event titled “Policy Forum: Creating a Sustainable Food Cold Chain in the Philippines” on June 28, 2021. The forum’s goal was to provide a platform for dialogue between policy makers and industry players.

Speakers included Mr. Anthony Dizon (Cold Chain Association of the Philippines), Dir. Raquel Echague (Board of Investments), Dir. Patrick Aquino (Energy Utilization and Management Bureau, Department of Energy), Mr. Onofre Escota (Philippine Ozone Desk, Department of Environment and Natural Resources), Atty. Maria Asuncion Hiyasmin H. Delos Santos (Philippine Port Authority) and Engr. Gilda Garbigay (FCC Project).

The forum is a first among a series of activities that aim to influence policy alignment for the phase-in of a new generation low-carbon cold chain technologies for the Philippines in the coming years.

View a recording of the event here.

View the presentation slides here.