SMC needs to clean up dirty, costly energy businesses, power a ‘world made better’ with renewables – report finds

San Miguel Corporation (SMC) drives the continued proliferation of dirty and costly energy from fossil fuels in the Philippines, which goes against climate, environmental, and socio-economic interests of Filipinos. We explore this in CEED’s latest report – Will San Miguel Corporation power a world made better? A report scoping the energy transition direction of the Philippines’ biggest fossil fuel expansionist.
 
SMC accounts for about 17% of the national power mix, with fossil fuels accounting for 87% of this capacity – including 2.9 GW coal and 1.2 GW gas. Having led coal expansion in the past, SMC now stands as the Philippines’ biggest gas expansionist with over 14 GW in the pipeline.
 
“SMC is making a name for itself as a fossil fuel-obsessed corporation blind to both climate and environmental imperatives starkly confronted by the Philippines. Its energy directions of promoting coal and now gas are costly not only to our planet and environment but also to the pockets of Filipino consumers. By building our dependence on imported liquefied natural gas (LNG), SMC is cementing our exposure to volatile global gas prices for decades to come,” said Gerry Arances, Executive Director of CEED.
 
Touted as a fuel that would complement the entry of more renewables in the future, energy, and consumer welfare advocacy groups have been questioning the desirability of fossil gas and LNG in the Philippines, considering its costly nature and the availability of an abundant potential for far cheaper renewable energy.
 
“Current projections for the price of generating energy from LNG are up to three times more than that of renewables, which are as low as Php 3/kWh. Last year, global prices for LNG power averaged as high as Php 16/kWh. SMC says it also intends to assist in ramping up renewables, but it can only prove itself to be truly at the service of Filipinos if it abandons its aggressive LNG ambitions. Otherwise, any contribution by SMC to advance renewables is eclipsed by a legacy of dirty, costly energy,” said Arances.
 
SMC engages in efforts to advance energy storage for renewables, with commitments to expanding its battery energy storage system (BESS) portfolio to 1 GW nationwide. It has also previously declared commitments to expand its renewable energy portfolio to 10 GW.
 
Released on the occasion of the energy giant’s annual stockholders’ meeting (ASM), the report provides an overview of SMC’s location in the energy transition in the Philippines, and seeks to support in enabling stakeholders to push SMC to power a ‘world made better’ considering the many controversies and challenges faced by the company’s gas and coal operations.
 
“SMC seems to have failed to learn from the massive opposition it received in the past on coal, which led to  many shelved projects. Today, it is damaging the Verde Island Passage for an LNG plant that does not have a power contract despite already nearing completion. It is still expanding coal and even entering coal mining, even as its existing plants continue to pollute with no exit plans in sight. Now, it also figures as a polluter behind the oil spill devastating the VIP, alongside other highly opposed projects like PAREX. SMC clearly has a lot of straightening up to do if it cares about its shareholders, investors, and stakeholders,” Arances explained.
 
Last week, communities host to SMC’s fossil fuel projects also wrote to the company’s shareholders, providing them an overview of the real-life impacts of SMC’s dirty operations and urging them as co-owners of the company to put forward clean energy transition directions for SMC.
 
With its release coinciding with the celebration of the country’s Independence Day, the report called on SMC to stop blocking the Philippines’ own independence from costly, dirty fossil fuels.
 
“SMC has every potential to unlock a hastened energy transition in the Philippines and contribute to freeing Filipinos from the clutches of expensive and dirty energy, but it is instead serving as the chain tying us to decades more of fossil fuel dependence. Where is SMC’s ‘malasakit‘ in that?” said Arances.

POST COVER PHOTO BY BASILIO SEPE. A drone image shows an LNG carrier docked at a liquified natural gas (LNG) terminal and plantation in Ilijan town, Batangas province south of Manila, Philippines. June 9, 2023.