1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 1817 
Introduced by  
Representatives Jose Manuel F. Alba and Anna Victoria Veloso-Tuazon 
AN ACT 
ESTABLISHING THE CARBON RIGHTS ACT, PROVIDING FOR THE 
OWNERSHIP, 
TRANSFER, 
AND 
BENEFIT-SHARING 
OF 
CARBON 
CREDITS, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The proposed Carbon Rights Act seeks to address the significant gaps 
in the current legal and policy frameworks governing carbon rights in the 
Philippines. The intent of this legislation is to create a comprehensive, clear, 
and robust legal framework that will facilitate private sector investments in 
carbon projects including nature-based solutions and technology-based 
solutions, thereby contributing to global climate change mitigation efforts 
and supporting the socio-economic development of local communities and 
indigenous peoples. 
Trends in Carbon Markets 
Globally, carbon markets have experienced substantial growth, driven by 
the increasing recognition of the urgent need to address climate change and 
the economic opportunities presented by carbon trading. The value of the 
July 14, 2025
10:08 am


2 
global voluntary carbon market grew to nearly $2 billion in 2021, a 
significant increase from previous years, reflecting the heightened demand 
for carbon credits as corporations and governments strive to meet their 
emission reduction targets (Ecosystem Marketplace, 2022). Compliance 
markets, such as those established under the Paris Agreement, provide 
additional platforms for trading carbon credits generated from various 
carbon reduction and sequestration projects. These markets incentivize 
investments in sustainable practices, offering economic benefits to project 
developers and contributing to global emission reduction targets (World 
Bank, 2022). 
Opportunities for the Philippines 
The Philippines, with its rich biodiversity and extensive natural resources, 
holds significant potential for carbon sequestration projects. The country's 
forests, mangroves, and other ecosystems are capable of sequestering 
substantial amounts of carbon. According to the Food and Agriculture 
Organization (FAO), the Philippines has approximately 7.6 million hectares 
of forested land, which offers vast opportunities for carbon sequestration 
through afforestation, reforestation, improved forest management, and 
mangrove restoration projects (FAO, 2020). Additionally, technological 
solutions such as renewable energy projects and waste management 
initiatives can further contribute to the country's carbon reduction efforts. 
By tapping into both voluntary and compliance carbon markets, the 
Philippines can attract substantial private sector investments, drive 
sustainable development, and enhance its climate resilience. 
Barriers to Private Sector Investment 
Despite these opportunities, several barriers hinder the scaling up of private 
sector investments in carbon forestry and other carbon projects in the 
Philippines: 
1. Lack of Clarity on Carbon Rights: Existing laws such as the


3 
Philippine Constitution, PD 705 (Revised Forestry Code), and RA 
8371 (Indigenous Peoples' Rights Act) do not explicitly define 
carbon rights, creating uncertainty regarding ownership, transfer, 
and benefit-sharing of carbon credits derived from carbon 
sequestration activities. Without clear legal definitions and 
guidelines, 
project 
developers 
face 
significant 
risks 
and 
uncertainties that can deter investments. 
2. Overlapping Jurisdictions: Conflicts between state-declared forest
lands and ancestral domains complicate project implementation
and management. These overlaps can lead to disputes over land
use and resource rights, necessitating clear legal guidelines to
resolve such conflicts. The absence of a harmonized framework for
recognizing and respecting overlapping jurisdictions hampers the
effective implementation of carbon projects.
3. Regulatory and Administrative Barriers: The complex regulatory
environment in the Philippines, coupled with the absence of local
validation and verification bodies, increases costs and causes
delays for carbon project developers. The lack of streamlined
processes for project approval, monitoring, and certification further
deters private sector investments. Simplifying these processes and
establishing 
local 
validation 
and 
verification 
bodies 
could
significantly reduce transaction costs and facilitate timely project
implementation.
4. Proving Additionality: Demonstrating additionality, a requirement
for carbon certification, is particularly challenging under current
laws like the NIPAS Act, which already mandates conservation
activities. 
Additionality 
requires 
that 
carbon 
sequestration
activities provide benefits beyond what would have occurred in the
absence of the project. The existing legal framework does not
provide clear guidelines on how to prove additionality, creating
obstacles for project certification (Verra, 2020).
5. State's Share of Carbon Rights: The lack of explicit provisions
detailing the government's share of revenues from carbon credits


4 
creates uncertainty for equitable benefit-sharing arrangements. 
Without clear legal mechanisms for revenue allocation, it is 
difficult to ensure that the benefits of carbon projects are 
distributed fairly among stakeholders, including the government, 
local communities, and project developers. 
Proposal for the Carbon Rights Act 
To address the barriers to scaling up private sector investments in carbon 
forestry and other carbon projects in the Philippines, the Carbon Rights Act 
is proposed with the following key provisions: 
1. Definition of Carbon Rights Ownership and Transfer: Clearly define
carbon rights as the legal entitlements to benefits from carbon
sequestration activities, including ownership, transfer, and trading
mechanisms, providing a firm legal basis for carbon credits.
2. Resolution of Overlapping Jurisdictions: Establish provisions to
resolve conflicts of carbon rights ownership between state-declared
forest lands and ancestral domains, ensuring clarity in policy
frameworks guided by relevant jurisprudence.
3. Affirmation of Market Rights: Grant owners of carbon credits the
freedom to sell these credits in local and international markets,
providing legal certainty and market access.
4. Mandate to Government for Exclusion of Carbon Credits from
Nationally Determined Contributions (NDCs): Ensure that carbon
credits from private and indigenous projects are not double
counted in national climate commitments, making them available
for market transactions.
5. Dynamic NDC Monitoring, Reporting, and Verification (MRV)
System and Corresponding Adjustments: Mandate the Climate
Change Commission (CCC) to establish a comprehensive MRV
system for accurate accounting of national climate actions and
compliance with international standards. The CCC shall also lead
in 
coordinating 
mitigation 
outcomes 
from 
various 
sectors,


5 
including agriculture, waste, industry, transport, forestry, and 
energy. 
6. Baseline Development for Carbon Stock: Require the Department of
Environment and Natural Resources (DENR) to develop carbon
stock baselines to reduce upfront costs for project developers and
facilitate project registration.
7. Government Responsibility for Carbon Stock Maintenance: Ensure
the government maintains carbon stocks upon the expiration of
tenurial instruments, ensuring long-term sustainability and carbon
sequestration benefits.
8. Benefit-Sharing Mechanisms: Establish guidelines for equitable
benefit-sharing from carbon sequestration projects to support
community development and conservation efforts.
9. Streamlined Regulatory Framework: Simplify regulatory and
administrative processes for carbon projects to reduce costs and
improve efficiency.
10. Tax Incentives for Carbon Project Developers: Provide tax
incentives, including 100% tax deductibility of expenses related to
project registration in carbon certification programs and tax
exemptions on the sale of carbon credits, to encourage private
sector investment in carbon projects.
For the foregoing reasons, the immediate consideration and approval 
of this bill is earnestly sought. 
JOSE MANUEL F. ALBA 
Representative, 1st District, 
Bukidnon 
ANNA VICTORIA VELOSO-TUAZON
Representative, 3rd District, 
Leyte 


6 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 1817 
Introduced by  
Representatives Jose Manuel F. Alba and Anna Victoria Veloso-Tuazon 
AN ACT 
ESTABLISHING THE CARBON RIGHTS ACT, PROVIDING FOR THE 
OWNERSHIP, 
TRANSFER, 
AND 
BENEFIT-SHARING 
OF 
CARBON 
CREDITS, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
ARTICLE 1 
General Provisions 
SECTION 1. Short Title. — This Act shall be known as the "Carbon 
Rights Act of 2025." 
SECTION. 2. Declaration of Policy. — It is hereby declared the policy of 
the State to promote sustainable development and address climate change 
through the establishment of a comprehensive legal framework for carbon 
rights. This includes the recognition, transfer, and benefit-sharing of carbon 
credits derived from carbon sequestration activities to foster private sector 


7  
  
investment 
and 
support 
the 
socioeconomic 
development 
of 
local 
communities and indigenous peoples. 
 
SECTION 3. Definition of Terms. - For the purposes of this Act, the 
following terms are defined: 
 
a) Carbon Rights – The legal entitlements to the benefits derived from 
carbon avoidance, carbon reduction, or carbon removal activities. 
These rights pertain to the outputs of such activities, which shall 
not be deemed as natural resources. Carbon rights include the 
ownership, transfer, and trading of carbon 6 credits resulting from 
these activities. 
b) Carbon Credits – Certificates or instruments representing the 
reduction, avoidance, or removal of one metric ton of carbon 
dioxide equivalent (C02e) from the atmosphere. These credits are 
generated through verified carbon reduction or sequestration 
activities, and their ownership is tied to the carbon rights defined 
in this Act. 
c) Certificate of Ancestral Domain Title (CADT) – Refers to the formal 
recognition 
of 
the 
rights 
of 
Indigenous 
Cultural 
Communities/lndigenous Peoples (ICCs/lPs) over their ancestral 
domains as provided under the Indigenous 
Peoples' Rights Act 
(RA 8371) 
d) Corresponding Adjustments – Refers to the process of adjusting a 
country's greenhouse gas inventory to account for the transfer of 
mitigation outcomes to ensure that there is no double counting of 
emission reductions. 
e) Internationally Transferred Mitigation Outcomes (ITMOs) – Refers to 
internationally traded units of greenhouse gas reductions or 
removals as provided under Article 6 of the Paris Agreement, 
which can be used by countries to meet their Nationally 
Determined Contributions (NDCs). 
 


8  
  
f) Monitoring, Reporting, and Verification (MRV) – Refers to a system of 
accurately monitoring, reporting, and verifying greenhouse gas 
emissions reductions or removals to ensure transparency and 
accountability in climate actions.  
g) Nationally Determined Contributions (NDCs) – Refers to the climate 
action plans submitted by countries under the Paris Agreement, 
outlining their efforts to reduce national emissions and adapt to 
the impacts of climate change. 
h) Nature-Based Solutions (NBS) – Refers to actions that protect, 
sustainably manage, and restore natural or modified ecosystems 
to 
address 
societal 
challenges 
effectively 
and 
adaptively, 
simultaneously providing human well-being and biodiversity 
benefits. 
NBS 
includes 
activities 
such 
as 
Afforestation, 
Reforestation, and Restoration (ARR) and Reducing Emissions 
from Deforestation and Forest Degradation (REDD+). 
i) 
Project Developers – Refers to individuals, companies, or 
organizations that initiate, develop, and implement carbon 
projects, including those involved in the generation and trading of 
carbon credits. 
j) 
Tenurial Instruments – Refers to legal documents issued by the 
DENR granting tenure holders the rights to use and manage 
specific areas of public domain lands for conservation, restoration, 
and other related activities. This includes instruments such as 
Forest Land Use Agreement (FLAG), Community-Based Forest 
Management Agreement (CBFMA), Integrated Forest Management 
Agreement (IFMA), Protected Area Community-Based Resource 
Management Agreement (PACBRMA), and Special Use Agreement 
in Protected Areas (SAPA). 
k) Voluntary Carbon Markets – Refers to markets where carbon 
credits are traded on a voluntary basis, allowing private entities, 
organizations, and individuals to offset their carbon emissions by 
purchasing carbon credits from verified projects that reduce or 
sequester greenhouse gas emissions. 


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ARTICLE 2 
SCOPE OF CARBON PROJECTS COVERED 
 
SECTION 4. Carbon Project Specifications. A carbon project, for 
purposes of this Act, refers to any initiative, activity, or program that results 
in the reduction, removal, or avoidance of carbon dioxide (C02) or other 
greenhouse gas (GHG) emissions, thereby generating carbon credits. Such 
projects 
shall 
adhere 
to 
internationally 
recognized 
standards 
and 
methodologies, including those outlined by the United Nations Framework 
Convention on Climate Change (UNFCCC), globally accepted voluntary 
carbon market standards and certification programs- All projects must 
adhere to the principles of these standards including demonstrating 
additionality, ensure proper monitoring, reporting, verification, and comply 
with relevant local, national, and international regulations.  
 
SECTION 5. Types of Carbon Projects covered. Carbon projects 
covered in this act covered the following types: 
 
a) Nature-Based Solutions (NBS): Projects utilizing natural processes to 
reduce, remove, or avoid GHG emissions, including but not limited 
to: 
 
a.1) Afforestation, Reforestation, and Revegetation (ARR): Initiatives 
involving the planting of trees or vegetation on land that has 
not been forested for a significant period or restoring previously 
forested or vegetated land to enhance carbon sequestration. 
 
a.2) Improved Forest Management (IFM): Practices aimed at 
enhancing the carbon sequestration potential of existing 
forests through sustainable management techniques, such as 
selective logging, extended rotation periods, and reduced-
impact logging. 


10  
  
 
a.3) Reduced Emissions from Deforestation and Forest Degradation 
(REDD+): Projects aimed at reducing emissions by preventing 
deforestation and forest degradation, conserving forest carbon 
stocks, and promoting sustainable forest management. 
 
a.4) Wetland Restoration and Conservation (WRC): Rehabilitation 
and conservation of wetlands to enhance their capacity for 
carbon sequestration, including peatland restoration and the 
protection of freshwater and coastal wetlands. 
 
a.5) Mangrove Restoration: Replanting and protection of mangrove 
ecosystems to enhance their carbon storage benefits and 
provide coastal protection. 
 
a.6) Soil Carbon Sequestration: Practices that increase carbon 
storage in soils 2 through improved agricultural techniques, 
such as no-till farming, cover 3 cropping, and agroforestry. 
 
b) Technology-Based Solutions (TBS): Projects applying technological 
innovations to reduce or capture GHG emissions, including but not 
limited to: 
b.1) Renewable Energy Projects: Generation of energy from 
renewable sources such as solar, wind, hydro, biomass, and 
geothermal. Methodologies include those under Verra's 
Verified Carbon Standard (VCS) and Gold Standard. 
 
b.2) Energy Efficiency Projects: Implementation of measures to 
reduce energy consumption and improve efficiency in 
industrial, 
commercial, 
and 
residential 
settings. 
Methodologies include energy savings through improved 
appliances, lighting, and building retrofits under Verra and 
Gold Standard frameworks. 


11  
  
b.3) Carbon Capture and Storage (CCS): Capture of carbon 
emissions from industrial processes and their storage 
underground to prevent release into the atmosphere. This 
includes methodologies recognized by Verra and other 
international standards. 
 
b.4) Waste Management Projects: Reduction of emissions through 
waste reduction, recycling, composting, and methane capture 
from landfills. Methodologies include landfill gas capture and 
utilization, and organic waste composting under Verra and 
Gold Standard. 
 
c) Hybrid Projects: Projects combining nature-based and technology-
based approaches to achieve greater carbon sequestration and 
emission reduction, including but not limited to: 
 
c.1) Integrated Renewable Energy and Agroforestry: Combination of 
solar or wind energy projects with agroforestry practices to 
maximize land use and carbon benefits. 
 
c.2) Sustainable Agriculture with Biogas Production: Utilization of 
agricultural residues for biogas production while implementing 
sustainable farm practices. 
 
 
ARTICLE 3 
CARBON RIGHTS OWNERSHIP AND TRANSFER 
 
SECTION 6. Carbon Rights for NBS Cabon Projects. Carbon rights 
shall be recognized as separate and distinct property rights, independent of 
land ownership. The ownership of carbon rights shall not affect or alter 
existing land tenure rights, including but not limited to ownership, 
possession, or management of land. 


12  
  
  
SECTION 7. Carbon Rights for NBS Carbon Projects on Lands under 
Public Domain. The Ownership of carbon rights on activities that generate 
carbon credits on lands under public domain are hereby defined as follows: 
 
a) Ownership. Carbon rights on carbon reduction or avoidance 
generated from lands under public domain belong to the State, as 
defined by the Regalian Doctrine and laws such as PD 705 
(Revised Forestry Code), NIPAS Act (RA 8 7586 as amended by RA 
11038), and the Public Land Act.  
 
b) Affirmation of carbon rights. All holders to land tenure issued by 
DENR under various tenurial instruments including but not 
limited to: Forest Land Use Agreement (FLAG), Community-Based 
Forest 
Management 
Agreement 
(CBFMA), 
Integrated 
Forest 
Management 
Agreement 
(IFMA), 
PACBRMA 
(Protected 
Area 
Community-Based Resource Management Agreement) and SAPA 
(Special Use Agreement in Protected Areas) are granted rights to 
carbon credits gained from the conservation, restoration, and 
protection activities of the tenure holders. 
 
SECTION 8. Carbon Rights for NBS Carbon Projects on Private Land 
and Indigenous Peoples' Land. The Ownership of carbon rights on activities 
that generate carbon credits on private lands and ancestral domains are 
hereby defined: 
 
a) Carbon Rights on Private Land. The full rights of private landowners 
to carbon credits generated from activities that generate carbon 
credits on private lands are hereby affirmed. These rights are based 
on the provisions of the Public Land Act and the 1987 Philippine 
Constitution, specifically Article 12, Section 6. 
 


13  
  
b) Carbon Rights on Ancestral Domains. The full rights of Indigenous 
Cultural Communities/lndigenous Peoples (ICCs/lPs) to carbon 
credits generated from activities that generate carbon credits on 
ancestral domains are hereby affirmed. These rights are based on 
the provisions of the Indigenous Peoples Rights Act (RA 8371) and 
the 1987 Philippine Constitution, specifically Article 12, Section 5. 
 
SECTION 9. Carbon Rights for NBS Carbon Projects in Overlapping 
Jurisdictions. Carbon rights in jurisdictions where there are overlaps are 
hereby defined: 
 
In cases where there is an overlap in jurisdiction between an Ancestral 
Domain Title (CADT) or Certificate of Ancestral Domain Title (CADT) and 
tenurial instruments issued by the Department of Environment and Natural 
Resources (DENR), the carbon rights shall be vested in the holders of the 
CADT. This provision recognizes the precedence of ancestral domain claims 
over conflicting tenurial instruments, ensuring that the Indigenous Cultural 
Communities/lndigenous Peoples (ICCs/IPs) retain their full carbon rights 
within their ancestral domains. 
 
Provided, however, that in areas declared as part of the National 
Integrated Protected Areas System (NIPAS) under the NIPAS Act, the carbon 
rights shall belong to the State, even if these areas are part of a CADT. This 
exception ensures that the State retains carbon rights within nationally 
protected areas to support national conservation goals. 
 
SECTION 10. Transfer of Ownership of Carbon Rights for NBS Carbon 
Projects. The transfer of ownership of carbon rights shall be governed by the 
following provisions: 
  
a) Contractual Agreements: The transfer of carbon rights from carbon 
rights owners to carbon project developers shall be effected 
through contractual agreements. These agreements shall be duly 


14  
  
notarized and shall specify the terms and conditions of the 
transfer, including the duration, scope, and any associated rights 
and obligations. 
 
b) Benefit-Sharing Agreements: Contractual agreements transferring 
carbon rights shall include provisions for equitable benefit-sharing. 
These agreements shall clearly define the allocation of revenues 
generated from carbon credits, ensuring fair compensation for all 
parties involved. Benefit-sharing mechanisms shall consider the 
extent of land use, carbon sequestration potential, and project 
profitability. 
 
c) Transparency and Equity: All agreements for the transfer of carbon 
rights shall be transparent and equitable. The terms of the 
agreements shall be communicated clearly to all parties, and 
provisions shall be made to ensure that the agreements are mutually 
beneficial and just. 
 
d) Registration: The transfer of carbon rights and the associated 
contractual agreements shall be registered with the Climate Change 
Commission (CCC) for monitoring and compliance purposes. The 
agreements shall comply with all relevant laws and regulations. 
 
e) Dispute Resolution: In case of disputes arising from the transfer of 
carbon rights or the implementation of benefit-sharing agreements, 
the parties shall first seek resolution through mediation or arbitration. 
If disputes remain unresolved, they may be brought before the 
appropriate legal or administrative bodies for adjudication. 
 
SECTION 11. Carbon Rights for Technology-Based Solutions (TBS) 
Carbon Projects. Carbon rights for Technology-Based Solutions (TBS) carbon 
projects are hereby defined: 
 


15  
  
a) Ownership: Carbon rights for TBS carbon projects shall belong to 
the project developers. Project developers shall have full rights to 
these carbon projects, including the right to use, sell, trade, or 
transfer the carbon credits generated from such projects. 
 
b) Full Entitlement: Project developers shall be entitled to all benefits 
arising from the carbon credits, and they shall have the authority 
to engage in transactions involving these credits, whether in local 
or 
international 
markets, 
under 
voluntary 
or 
compliance 
frameworks. 
 
 
ARTICLE 4 
SALE OF CARBON CREDITS 
 
SECTION 12. Sale in Voluntary Carbon Markets. This section provides 
legal certainty and facilitates market access for carbon credits generated by 
private entities and indigenous communities. The following aspects are 
hereby defined: 
  
a) Liberty to Transact: Owners of carbon credits, as defined under the 
carbon rights and transfer provisions of this Act, are hereby granted 
the unrestricted right to sell, trade, or transfer said carbon credits in 
both local and international voluntary carbon markets, or to buyers 
operating under voluntary carbon market frameworks. This right 
includes entering into agreements with buyers, brokers, and other 
market participants without undue interference. 
 
b) Compliance with Market Standards: All transactions involving the sale 
of carbon credits must comply with the standards and requirements of 
the respective voluntary carbon markets. This includes adherence to 
certification, validation, and verification processes recognized by 
reputable intemational voluntary carbon market standards. 


16  
  
 
c) Benefit-Sharing Agreements: Transactions must honor existing benefit-
sharing agreements with local communities, indigenous peoples, and 
other stakeholders. Sellers must ensure that the benefits derived from 
the sale of carbon credits are distributed equitably and in accordance 
with previously established agreements. 
 
d) Penalties for Double Selling or False Claims: Any individual or entity 
found guilty of double-selling carbon credits or making false claims 
regarding the carbon credits shall be subject to penalties and potential 
criminal charges as per the relevant laws. The Climate Change 
Commission (CCC) shall have the authority to investigate and enforce 
these penalties to maintain the integrity of the carbon market. 
 
SECTION 13. Sale and Transfer of Credits Under the Paris Agreement 
Article 6. Carbon project developers may collaborate with the government to 
sell carbon credits under the Paris Agreement, specifically through Article 6 
mechanisms. 
These 
mechanisms 
include 
Internationally 
Transferred 
Mitigation Outcomes (ITMOs) under Article 6.2 and the Sustainable 
Development Mechanism (SDM) under Article 6.4. 
 
 
ARTICLE 5 
ROLE OF GOVERNMENT AGENCIES 
 
SECTION 14. Lead Agency – Mandate to the Climate Change 
Commission (CCC). The Climate Change Commission (CCC) is hereby 
mandated to establish the necessary protocols, procedures, and systems to 
effectively implement the mechanisms for ITMOs and other Article 6 
transactions, including: 
 
a) Coordination of Mitigation Outcomes: The CCC shall serve as the lead 
agency for coordinating and consolidating mitigation outcomes from 


17  
  
various sectors, including agriculture, waste, industry, transport, 
forestry, 
and 
energy. 
This 
integrated 
approach 
ensures 
a 
comprehensive and unified national climate action and reporting 
framework. 
 
b) Monitoring of GHG Emissions Mitigation Outcomes Under the 
Nationally-determined Contribution (NDC): The CCC shall establish a 
comprehensive Monitoring, Reporting, and Verification (MRV) 
system 
to 
dynamically 
adjust 
the 
Nationally 
Determined 
Contributions (NDC) mitigation outcomes. This system shall ensure 
accurate and transparent accounting of national climate actions 
and compliance with international carbon market standards. 
 
c) System for Issuance of Letter of Authority (LoA): The CCC shall be 
responsible for issuing Letters of Authority (LoA) to project 
developers seeking to engage in ITMOs. This LoA shall serve as 
official government approval for the transfer of carbon credits under 
Article 6 mechanisms, ensuring compliance with national and 
international regulations. 
 
d) System for Corresponding Adjustments: The CCC shall establish a 
system for making corresponding adjustments to the national 
greenhouse gas inventory and mitigation outcomes to reflect the 
transfer of ITMOs. This system shall prevent double counting of 
emission reductions and ensure the integrity of the country's NDC 
commitments. Carbon credits based on carbon rights granted by 
the government to tenure holders for lands of the public domain, as 
well as those generated in public lands and ancestral domain lands, 
shall not be claimed by the government as part of its NDC 
accomplishment or must be removed from government accounts. 
Such credits must be excluded from government accounts to 
prevent double-counting and ensure they remain available for 
market transactions. This provision aims to uphold the integrity of 


18  
  
private and indigenous carbon projects and their contributions to 
global climate mitigation efforts. 
 
e) Coordination for NDC Targets: The CCC shall be responsible for 
coordinating with relevant agencies to ensure that NDC targets are 
met even as project developers are entitled to sell ITMOs to other 
countries. The CCC shall develop a mitigation strategy for the 
government to deliver mitigation action to meet NDC targets, such 
as through conservation and restoration efforts in the forestry 
sector, or investments in GHG emissions mitigation in the waste 
sector. This mandate ensures that the government fulfills its NDC 
commitments while allowing the private sector to engage in 
international carbon markets. 
 
SECTION 15. Mandates to the Department of Environment and Natural 
Resources (DENR). The DENR is provided with the followng mandates: 
 
a) Monitoring and Reporting: The DENR is mandated to work with 
the CCC to monitor and report mitigation outcomes in the forestry, 
waste, and industry sectors. The DENR shall implement 
conservation, restoration, and waste management practices that 
contribute to GHG emission reductions and ensure these are 
accurately accounted for in the national climate action framework.  
 
b) Baseline Development for Carbon Stock: The DENR is required to 
develop carbon stock baselines to reduce upfront costs for project 
developers and facilitate project registration. This includes 
establishing 
a 
10-year 
historical 
deforestation 
or 
forest 
degradation baseline for areas suitable for carbon forestry projects. 
The provision aims to standardize and provide scientifically robust 
data to support carbon sequestration projects. 
 


19  
  
c) Government Responsibility for Carbon Stock Maintenance: The 
DENR shall ensure the government assumes responsibility for 
maintaining carbon stocks upon the expiration of tenurial 
instruments. This responsibility includes protecting and ensuring 
carbon stock is maintained or increased upon the return of the 
land to the government, given the 25-year renewable period of 
tenurial instruments. This provision aims to ensure long-term 
sustainability and carbon sequestration benefits of forestry 
projects beyond the tenure period. 
 
SECTION 16. Mandates to Other Relevant Agencies. The following 
agencies are also provided with the following mandates:  
 
a) Department of Agriculture (DA): The DA is mandated to collaborate with 
the CCC to monitor and report mitigation outcomes in the agriculture 
sector. The DA shall implement and oversee agricultural practices that 
contribute to GHG emission reductions and ensure these are 
accurately accounted for in the national climate action framework. 
 
b) Department of Energy (DOE): The DOE is mandated to coordinate with 
the CCC to monitor and report mitigation outcomes in the energy 
sector. The DOE shall implement and oversee energy efficiency and 
renewable energy projects that contribute to GHG emission reductions 
and ensure these are accurately accounted for in the national climate 
action framework. 
 
c) Department of Transportation (DOTr): The DOTr is mandated to 
collaborate with the CCC to monitor and report mitigation outcomes in 
the transport sector. The DOTr shall implement and oversee 
transportation initiatives that contribute to GHG emission reductions 
and ensure these are accurately accounted for in the national climate 
action framework. 
 


20  
  
ARTICLE 6 
INCENTIVES TO PROJECT DEVELOPERS 
 
SECTION 17. Tax Incentives for Carbon Project Developers. The 
following incentives shall be provided to project developers: 
 
a) Tax Deductibility of Expenses: All expenses incurred by carbon 
project developers related to the registration of their projects in 
recognized carbon certification programs shall be 100% deductible 
from their taxable income. This includes, but is not limited to, 
costs associated with project validation, verification, monitoring, 
reporting, and any other expenses directly related to the 
certification process. 
 
b) Tax Incentives on Sale of Credits: The sale of carbon credits shall 
be exempt from all forms of taxation. This exemption includes, but 
is not limited to, income tax, value-added tax (VAT), and any other 
applicable taxes on the income derived from the sale or transfer of 
carbon credits.  
 
 
ARTICLE 7 
Miscellaneous Provisions 
 
SECTION 18. Appropriations. – The amount necessary for the initial 
implementation of this Act shall be charged against the current year's 
appropriations of the department/ agencies concerned. Thereafter, such 
sums as may be necessary for the continued implementation of this Act 
shall be included in the annual General Appropriations Act. 
 
SECTION 19. Annual Report to Congress. –  The implementing 
agencies shall report to Congress on their progress in carrying out the 
provisions of this Act for each fiscal year. The reports shall be consolidated 


21  
  
by the CCC for presentation to the appropriate Committee in Congress at a 
meeting called for the purpose. 
 
SECTION 20. Allocation of funds. –  Pursuant to Article 4 of this Act, 
the aforementioned agencies shall allocate from their annual appropriations 
the adequate funds for the implementation of their mandates, including 
training and capacity building, under this Act, subject to support under the 
mechanism of the Means of Implementation of the Paris Agreement. 
 
SECTION 21. Implementing Rules and Regulations. – The CCC, in 
coordination with relevant agencies, shall draft and issue implementing 
rules and regulations necessary, in coordination with other relevant and 
appropriate government agencies within sixty (60) days after its approval.  
 
SECTION 22. Separability Clause. – If for any reason any section or 
provision of this Act is declared by the Court as unconstitutional or invalid, 
the other sections or provisions thereof shall not be affected thereby. 
 
SECTION 23. Repealing Clause. – All laws, ordinances, rules, and 
regulations, and other issuances or parts thereof, which are inconsistent 
with this Act, are hereby repealed or modified accordingly. 
 
SECTION 24. Effectivity. – This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in a newspaper of general 
circulation. 
     
Approved,