Senate Bill No. 1382 / Committee Report No. 58
AN ACT PROVIDING THE NATIONAL ENERGY POLICY AND REGULATORY FRAMEWORK FOR THE USE OF ELECTRIC VEHICLES AND THE ESTABLISHMENT OF ELECTRIC CHARGING STATIONS
Tuesday, March 03, 2020
Session Hall, Senate of the Philippines
Delivered by Hon. Win Gatchalian, Senator of the Republic:
Mr. President, peers in the Senate, good afternoon.
On March 14, 2017, the Senate voted to ratify the Paris Agreement, an ambitious multilateral convention which seeks to substantially reduce greenhouse gas emissions worldwide by 2030. The Philippines made one of the most determined declarations among all countries under the Paris Agreement when we undertook to reduce our greenhouse gas emissions by 70% by 2030. During remarks delivered on the floor in favor of ratification, this representation noted that our ability to make good on this lofty promise would be contingent upon the accessibility of new technologies to reduce emissions in an economically responsible manner.
Mr. President, the bill we are sponsoring today will increase accessibility and economic viability of a key emerging technology which will help the Philippines meet its emissions reduction goals: the electric vehicle, or EV for short. Before I discuss the salient features of Senate Bill No. 1382, otherwise known as the Electric Vehicles and Charging Stations Act, allow me to provide some data on the great potential of EVs in reducing Philippine greenhouse gas emissions, fostering greater energy independence for our country, and providing economic savings for industry and households.
According to the Department of Energy, the Philippines imported an estimated 97 percent of the total crude supply in 2019, with the first half of the year showing 74 percent being imported from the Middle East alone. This means we are almost completely dependent on foreign powers to fuel the day-to-day workings of our economy, including even the act of getting to and from the office daily.
The transport sector in fact accounts for the largest share in the total final energy consumption at 35 percent, 88 percent of which is for road transport. This share is expected to increase given the increasing number of motor vehicles in the country. In 2014, the Land Transportation Office estimates there were 8 million registered motor vehicles including motorcycles in the country. Assuming a ten percent increase every year, the Department of Energy estimates that the number will go up to over 90 million by 2040.
The dominance of fossil fuel-powered vehicles in the Philippine market has had severe repercussions for the environment. The transport sector is the second highest contributor to the Philippines’ greenhouse gas emissions in 2016 at 31.6 percent. Overall, motor vehicles in the country released 34.7 million tons of CO2 equivalent into the environment in the year 2016 alone. Based on the current trajectory of Philippine greenhouse emissions, we will not be able to reduce emissions by 70 percent, let alone by 0.1 percent, from now until 2030. Instead, we are looking at an approximate 150 percent increase in emissions, to around 250 million tons of CO2 equivalent per annum by 2030, with the transport sector having an annual average growth rate of 5.3%.
Despite all of this, however, EVs represent but a miniscule share of the Philippine market. Only 0.3% of the country’s transport energy demand is serviced by electricity. Then again, this is not surprising considering that according to the 2014 data of the Philippine Statistics Authority, there are only 145 light electric vehicles in the country compared to 1.9 million diesel and 6.1 million gasoline vehicles.
The tiny market share of EVs in the Philippines can be attributed to two main reasons. The first is that electric vehicles – whether battery electric vehicles, hybrid-electric vehicles, or plug-in hybrid-electric vehicles – are significantly more expensive than internal combustion engine or ICE vehicles running on gasoline or diesel. A comparative cost analysis of ICE vehicles and their EV equivalents in the Philippine Electric Vehicle Policy Analysis Report shows that battery EV small car models cost between 1.08 to more than 2 times that of their ICE vehicle counterparts. Meanwhile, the PHP 1.6 million cost of an electric jeepney is roughly twice the cost of the standard diesel jeepneys which currently service the majority of PUV routes. The second reason is the lack of a national infrastructure of charging stations for electric vehicles. This makes it impractical for individuals to invest in EVs, and impossible for businesses to transition to heavy EVs for industrial long-haul purposes.
Mr. President, the Electric Vehicles and Charging Stations Act seeks to address these barriers head-on by establishing a national policy framework to mainstream the use of EVs in the private and public sectors. This legislation outlines policies to spur demand generation for and industry development of EVs.
To facilitate practical and convenient use of EVs, gasoline stations nationwide will be required to provide space for the installation of charging stations. These charging stations will be run by the owners of the gasoline stations themselves or by third party service providers. Additionally, all public and private buildings constructed after the effective of this Act shall be required to designate dedicated parking slots for the exclusive use of EVs. These parking slots will double as charging stations to further widen the nationwide network of charging stations. Furthermore, the bill mandates large industrial and commercial companies, public transport operators, and government agencies and instrumentalities to adopt a minimum 5 percent share of EVs within their respective fleets. Local government units are also tasked to create green routes for electrified public utility vehicle fleets.
To parry the high cost of EVs until its eventual parity with ICE vehicles, fiscal and non-fiscal incentives are provided for the importation, utilization, and manufacture of EVs. This includes a 9-year exemption from value-added tax, customs duties, and discounts on the Motor Vehicle User’s Charge as well as expedited registration procedures for EV users. Moreover, the Department of Trade and Industry and the Board of Investments are mandated to establish a time-bound, targeted, performance-based, and transparent EV incentive strategy to attract EV and EV parts manufacturing.
This bill also provides a whole-of-government approach to the development of the EV sector through first, the creation of a Comprehensive EV Roadmap to be undertaken primarily by the DOE together with the DOTR, DTI, BOI, and DOST, and second, the assignment of specific duties and responsibilities for these agencies including ERC, DENR, DPWH, and the LGUs to guarantee the law’s effective implementation. This synergistic government policy framework will ensure that all aspects of the EV policy will be formulated and implemented by the most capable agency for that purpose.
If implemented correctly, Mr. President, we estimate that the electrification of the Philippine fleet of vehicles could end up reducing oil consumption in the country by as much as 146.56 million barrels per year. This would create savings of 9.8 billion dollars of 490 billion pesos per year. Essentially, this bill is good for the environment and good for our wallets too.
Considering the seismic environmental and economic implications of this bill, Mr. President, I join the honorable co-authors of this legislation, namely Senate President Pro-Tempore Ralph Recto, Senator Kiko Pangilinan, Senator Migz Zubiri, Senator Manny Pacquaio, Senator Grace Poe, and Senator Koko Pimentel in sponsoring this measure and urging the chamber to approve the same. Thank you, Mr. President.