Japan’s Mitsubishi Corp. and its unit, Diamond Generating Asia (DGA), have joined ACEN, GenZero and Keppel Ltd. to shut down a 246-megawatt coal plant earlier than planned using Transition Credits.

ACEN confirmed in a regulatory filing on Wednesday that the companies signed a Deed of Accession to a 2024 memorandum of understanding (MoU) to speed up the retirement of the South Luzon Thermal Energy Corp. (SLTEC) coal plant from 2040 to 2030.

Mitsubishi and DGA’s involvement could help open access to the Japanese carbon market and support Japan’s emissions trading system.

“We are honored to join this landmark initiative with ACEN, GenZero and Keppel, which represents one of the world’s first steps toward realizing a credible and scalable Transition Credits scheme,” DGA CEO Shinichiro Suzuki said.

The Transition Credits scheme will help fund new clean energy to replace the coal plant’s output while supporting workers and communities affected by the shutdown.

Emissions cut perks

Transition Credits are carbon credits given to projects that cut emissions by replacing coal with renewable energy.

“By pioneering the Transition Credits mechanism, we are not only accelerating decarbonization but also demonstrating a viable pathway for coal-dependent economies to transition sustainably,” ACEN CEO Eric Francia said.

“We hope this will serve as a catalyst for other coal plant owners to embark on their clean energy journey,” he added.

For GenZero CEO Frederick Teo, transition credits are a breakthrough tool for raising funds to shut down coal plants early, replace their output with clean energy, and ensure communities are not left behind.

“We are excited to welcome Mitsubishi and DGA on board this pioneering initiative, which not only advances our commitment to a net-zero future but also establishes a scalable model for sustainable energy transformation across the region,” Teo said.

Since 2023, ACEN has worked with the Monetary Authority of Singapore and The Rockefeller Foundation to develop the Transition Credits framework, which has gone through public consultation.

Mitsubishi and DGA are long-time partners of ACEN, including on wind projects in Ilocos Norte.