PH hydrogen energy plans draw foreign interest

INQUIRER FILE PHOTO

“Numerous” companies from Australia, Europe and North America have expressed interest to develop hydrogen sources in the country for power generation, according to the Department of Energy (DOE).

Energy Undersecretary Alessandro Sales said the DOE was “pleasantly surprised at the level of interest” among international players to participate in future biddings for hydrogen contracts. “These hydrogen contracts are in fact novel in today’s world because apparently, it’s only the Philippines that has bid an area purposely for hydrogen exploration,” Sales said.

The DOE has offered two areas for hydrogen exploration —one is in Zambales and the other is at the western portion of Central Luzon.

It will evaluate all proposals in August.

Energy Secretary Raphael Lotilla had said that the discovery of natural hydrogen deposits in Mali and Europe was one of the reasons behind the “high interest” of European entities to consider venturing into hydrogen.

“I am sure that even our East Asian neighbors will also be looking at the opportunities in this area,” Lotilla said.

Signed in January this year, the DOE issued Department Circular No. 2024-01-0001 to incentivize entities that will help the government secure its power supply by investing in hydrogen energy for power generation.

The said DOE policy governs the national policy and general framework, roadmap and guidelines for hydrogen in the energy sector.

It also consolidates and harmonizes all existing issuances to ensure and accelerate investments in safe, effective and efficient hydrogen development, production and utilization.

Under the policy, hydrogen energy projects with the primary purpose of producing, importing and exporting green hydrogen and green hydrogen derivatives for power generation and other applications may avail certain incentives from the government.

These include income tax holiday, special tax rates, net operating loss carry-over, tax exemption of carbon credits, zero percent value added tax rate and exemption from duties on renewable energy (RE) machinery, equipment and materials.

The DOE issued the policy as it considers hydrogen as another viable alternative and cleaner energy source and aims to increase the use of renewables nationwide to meet its future requirements.

“The potential for utilizing hydrogen resources, if optimally developed, will play a major role in improving the country’s energy security by reducing dependence on imported fossil fuels and in achieving the country’s goal for a low-carbon future,” the circular said.