The United States is stepping up its push for small modular reactors (SMRs) in the Philippines. In mid-February 2026, the U.S. Trade and Development Agency (USTDA) announced $2.7 million in technical assistance for Meralco PowerGen Corp. (MGEN). The work will review advanced U.S. SMR designs and create an implementation roadmap for what could become the country’s first SMR nuclear power plant.
USTDA framed the project as “vendor-neutral” evaluation support that can help the Philippines compare options and plan the steps needed to move from concept to construction. The goal is to speed early planning, such as technical screening and sequencing, before major capital decisions.
This is not a power plant approval. It is a funded study and planning effort. Still, it signals stronger U.S. backing for nuclear cooperation at a time when the Philippines is looking for more reliable, low-carbon power sources.
Meralco Chairman Manuel Pangilinan remarked:
“Through the generosity of the US government, we are laying the groundwork for the responsible integration of nuclear into our energy mix through small modular reactors. This offers a safe and responsible pathway towards energy security for generations to come.”
Coal Dependence and Rising Demand Drive the Debate
The Philippines still relies heavily on fossil fuels for electricity. Official DOE data show that in 2024, total power generation reached 126,941 GWh. Coal produced 79,359 GWh, which is about 62.5% of the country’s electricity that year.
- Natural gas produced 18,047 GWh (about 14%). Renewable energy produced 28,193 GWh (about 22%). Oil produced 1,342 GWh (about 1%).
On the capacity side, the DOE reported 29,706 MW of total installed generating capacity in 2024, with the following breakdown:
- Coal capacity was 13,006 MW (about 44%);
- Renewable energy capacity was 9,520 MW (about 32%);
- Natural gas was 3,732 MW (more than 12%); and
- Oil was 3,448 MW (almost 12%).
Demand growth also shapes this debate. In the DOE’s power planning materials, the country’s peak demand is projected to rise from 16,596 MW in 2022 to 68,483 MW by 2050, which the DOE notes equals an average annual growth rate of 5%.
These numbers help explain why policymakers and utilities are reviewing many options at once. They include grid upgrades, energy efficiency, renewables, storage, gas, and now nuclear.
SMRs Explained: Smaller Reactors, Big Expectations
An SMR is a nuclear reactor designed to be smaller than traditional large reactors. The International Atomic Energy Agency (IAEA) defines SMRs as reactors with a capacity of up to 300 MW(e) per unit. That is roughly one-third of the size of many conventional reactors.
The image is an example of an SMR design by NuScale Power, an American SMR company.
Supporters point to three practical features. First, SMRs aim for modular construction. Developers may build parts in factories and assemble them on site. Second, SMRs can be scaled by adding modules over time. Third, SMRs can provide steady output that does not depend on weather, which can help a grid manage variability from wind and solar.
At the same time, SMRs do not remove hard requirements. Any nuclear project still needs a strong regulator, safe site selection, trained staff, emergency planning, fuel and waste plans, and long-term financing. These items often drive timelines and costs, especially for a first plant in a country that is new to commercial nuclear power.
Small Reactors, Big Global Ambitions
Around the world, interest in small modular reactors is growing fast. Designers have created more than 120 SMR designs in recent years, with dozens in early review or licensing stages.
The global market for SMRs is also expanding. Analysts estimate the value of SMR markets at several billion U.S. dollars today, and rising over the next decade. Some forecasts show markets increasing to roughly double or more by the early 2030s, around $10–16 billion.
Installed SMR capacity is also expected to rise. Industry reports project several hundred megawatts of capacity by 2030, with further growth as more designs reach construction, up to 2.0 GW per IEA forecast.
Countries in North America, Europe, and the Asia Pacific are leading deployment and planning. Many governments see SMRs as a way to add reliable, low-carbon power alongside renewables.
Global forecasts to 2050 show SMRs could play a bigger role in clean energy systems, especially under scenarios that aim for low emissions and stable power. However, real deployment depends on licensing, investment, and supply chain development.
The 123 Agreement: Legal Groundwork for Nuclear Cooperation
A key reason U.S. firms can offer nuclear technology is the U.S.–Philippines Agreement for Cooperation in the Peaceful Uses of Nuclear Energy, often called a “123 Agreement.” The U.S. State Department said the agreement entered into force on July 2, 2024. It sets the legal framework for civil nuclear cooperation and can support exports of nuclear material, equipment, and components under U.S. rules.
In practice, this type of agreement is one building block. It does not select a reactor design and does not guarantee financing. It does create the conditions for deeper technical engagement, training, and potential commercial activity, as long as both sides meet non-proliferation and regulatory requirements.
From Planning to Licensing: Mapping the Nuclear Timeline
The Philippines began its nuclear journey after the 1973 oil crisis. It built the 621 MWe Bataan Nuclear Power Plant in 1984 at a cost of USD460 million. However, safety and financial concerns stopped it from operating. The plant was never fueled but has been maintained.
The DOE has publicly set nuclear targets in its 2022 planning. Reporting around the Philippine Energy Plan has cited a pathway that aims for at least 1,200 MW of nuclear capacity by 2032, rising to 2,400 MW by 2035, and 4,800 MW by 2050.
The DOE has also discussed regulatory readiness. In a November 2025 media release, the DOE said the Philippines aims to begin accepting nuclear power plant license applications by 2026, linked to the creation of the country’s nuclear safety regulator under Republic Act No. 12305.
International reviews add more context. In December 2024, the IAEA reported that the Philippines was making progress on nuclear infrastructure development, while still working through the many steps needed for a full nuclear power program.
Against that timeline, the USTDA-MGEN work looks like an “early stage” accelerator. It helps narrow design choices and map steps. It does not replace the national licensing process.
Geothermal’s Role in a Future Nuclear Mix
The Philippines already has a major source of steady renewable power: geothermal energy. DOE statistics list 1,952 MW of geothermal installed generating capacity in 2024. Geothermal generation reached 10,789 GWh in 2024.
This matters for the SMR discussion because many people describe nuclear as “baseload,” meaning it can run day and night. In the Philippines, geothermal already provides a similar kind of steady output in many areas. The challenge is that geothermal expansion depends on location, drilling success, and up-front exploration risk.
This is why planners often look at a mix. They can expand renewables like geothermal, hydro, wind, and solar, while adding storage and grid upgrades. They can also evaluate nuclear for future reliability needs, especially if coal plants retire over time.
For the U.S. side, the near-term goal is clear. It wants U.S. designs and services to be part of the shortlist. For the Philippines, the task is also clear. It must match any technology choice to national needs, grid limits, safety rules, and long-term affordability.
The post America Backs First Manila SMR Study: The New Nuclear Roadmap for Philippine Power appeared first on Carbon Credits.
Insetting program design starts with your supplier map. The carbon claim comes much later.
Consider a coffee procurement team that funds a farm intervention before checking its sourcing data. The supplier aggregates coffee lots from several regions. The buyer lacks farm-level traceability. Another purchaser expects to report the same outcome. A more attractive project brochure solves none of these problems.
If the distinction between a value-chain intervention and a purchased credit is still open, read CCC’s Insetting vs Offsetting guide before you set the brief.
Insetting program design begins with the purchasing relationship and works outward. You need to decide 1) where an intervention belongs, 2) what business problem it addresses, 3) who pays for it, 4) how results will be measured, and 5) what the evidence will let you say about them. This five-step playbook turns that sequence into a procurement plan.
Step 1: Insetting program design starts with supplier mapping
Start with the commodities that matter most to your Scope 3 inventory and sourcing continuity. Ask finance for spend by supplier, sustainability for the emissions baseline, and category managers for origin and volume records. Then identify which suppliers can trace material to a jurisdiction, sourcing region, producer group, or individual land-management unit.
The level of traceability affects what you can account for. Under the GHG Protocol Land Sector and Removals Standard, the spatial boundary for purchased land-based products depends on the traceability associated with each volume. Farm-specific factors or removals require physical traceability through an acceptable chain-of-custody model. A contract with a tier-one trader, by itself, does not establish a link to the farms behind its deliveries.[1]
Build a first-pass table with five columns: commodity and annual volume; supplier and origin; current traceability level; land-use and production risks; and the business owner who can change the purchasing terms. Mark missing data plainly. A blank cell is cheaper to fix before a program starts than after a claim is drafted.
If your company sets an SBTi Forest, Land and Agriculture target (FLAG), keep its land-related target boundary separate from energy and industry emissions. The current FLAG guidance also requires relevant companies to assess primary deforestation-linked commodities in their value chains.[2]
Step 2: Choose a commodity and jurisdiction for a pilot
Select one supply corridor where the sourcing connection can be established and procurement has a reason to stay. A useful pilot has repeat purchases, suppliers willing to share records, an intervention matched to a diagnosed problem, and a defined plan to measure the result. Carbon potential alone is a poor selection rule if the supplier cannot deliver the crop your business needs.
Compare candidate regions on land-use risk, supplier concentration, local rights and tenure, the availability of baseline data, and exposure to drought, erosion, or forest conversion. Check the relevant legal requirements separately. A nature project does not satisfy a due-diligence obligation merely because it has a carbon method attached.
Consider a coffee buyer sourcing from two districts. In the first, producer-group records identify the farms, while recent dry seasons have increased rejected green coffee lots. In the second, deliveries pass through several intermediaries and farm origins are unknown. Pilot shade management in the first district, with local agronomic advice and quality checks built into the plan. The buyer can trace purchases there and test the intervention against a defined sourcing problem.
Use a short decision memo to record why the selected corridor beats the alternatives, what remains uncertain, and what would stop the pilot. That memo is the first control against a project drifting toward whatever happens to photograph well.
Step 3: Design the supplier engagement and commercial model
The intervention needs an owner on each side of the contract. Decide who supplies planting material or training, who maintains the practice, who bears the cost if a harvest disappoints, and how long the buyer expects to purchase from participating suppliers. Where smallholders participate, budget cash flow and technical support for practices that offer a later return.
Put these terms in a supplier agreement or pilot addendum. It should cover eligible farms and volumes, consent to data collection, access for monitoring, any land or carbon rights that matter, benefit sharing, and what happens if the purchasing relationship ends. Ask local counsel and producer representatives to review the arrangement. The Accountability Framework is a useful reference for supply-chain work involving forests, ecosystems, and human rights.[3]
Avoid assigning an automatic carbon benefit to the buyer. The contract should say which party has the right to report each outcome, how overlapping claims will be checked, and how any issued credits will be handled. A reduction reported in a buyer’s inventory cannot simply be sold for someone else’s offset claim without an accounting review. SBTi FLAG guidance excludes purchased credits used as offsets from near-term FLAG target achievement.[2]
Set commercial measures beside environmental ones: delivered volume, rejection rate, supplier retention, and procurement cost. They tell you whether the program works as a supply-chain investment, even if carbon accounting takes longer to resolve.
Step 4: Build monitoring, reporting, and verification before rollout
Agree on the baseline and data flow before paying for a full rollout. Identify the land units or sourcing regions in scope, the practices that change, the records suppliers already keep, and the additional measurements the program requires. Decide which data can come from field visits, transaction records, or remote sensing, and who checks each source.
For carbon, separate three questions. Did the practice happen? Did emissions or removals change under an applicable method? Can the buyer attribute a defensible share to its purchased goods without double counting? The GHG Protocol’s 2026 guidance includes dedicated chapters on spatial boundaries, data and methods, evaluating actions, credited outcomes, and assurance.[1] These are distinct jobs. A photograph of a planted tree answers only part of the first.
CCC’s MRV and Additionality article explains the separate evidence questions a project reviewer will ask.
Create an evidence file for every reporting period: dated supplier and farm records, purchase volumes, methods and emission factors, uncertainty, quality checks, and changes from the baseline. Specify who can challenge the data and how corrections are recorded. If a project also seeks credit certification, keep project accounting and corporate inventory accounting separate. The GHG Protocol says its land standard focuses on entity-level inventories and does not set the rules for credit certification.[4]
Start with the minimum viable measurement design that can survive review. Add complexity when the pilot tells you which data actually changes a decision.
Step 5: Decide what can be reported and claimed
Insetting program design needs reporting rules before the marketing copy. Procurement, sustainability, finance, and legal should agree on four distinct outputs: operational performance; observed land or nature outcomes; inventory effects, if the accounting criteria are met; and any separately issued credits. One dashboard can display them, but they should not share a single unqualified headline.
SBTi FLAG guidance allows certain land-based removals within a company’s operations or supply chain to contribute to FLAG pathways, subject to criteria including permanence, traceability, data quality, and allocation. It does not allow purchased offsets to meet near-term FLAG targets.[2] Eligibility therefore depends on evidence and the applicable target rules, not on calling an activity “insetting.”
Draft a claims register. For each proposed sentence, record the period, boundary, data owner, calculation method, reviewer, and whether the result is measured, estimated, or still a goal. If the evidence supports only “we funded a pilot with 200 farms,” say that. Do not turn a funding fact into a verified emissions reduction.
What good looks like by year three
Treat year three as a review point, not a promised payback date. A mature pilot should have mapped participating supply volumes, a stable supplier agreement, a repeatable data collection process, and a comparison of commercial and environmental results against the baseline. It should also have a documented answer for outcomes that cannot be included in the buyer’s inventory.
Scale only where the pilot improves a sourcing decision and the evidence can follow the product. If neither condition holds, redesign the intervention or change the corridor. A disciplined program can conclude that a site is unsuitable. That is useful procurement intelligence.
Discuss your insetting program with CCC
Carbon Credit Capital designs nature-based supply chain investments around sourcing needs and measurable sustainability outcomes. Schedule a consultation with our carbon and sustainability experts to map your tier-one supplier network, FLAG exposure, and first pilot decision.
Sources
[1] GHG Protocol, Land Sector and Removals Standard, version 1.1, and companion Guidance, June 2026: https://ghgprotocol.org/land-sector-and-removals-standard ; https://ghgprotocol.org/land-sector-and-removals-guidance
[2] Science Based Targets initiative, Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, especially pp. 16–17, 37, and 41: https://sciencebasedtargets.org/resources/files/SBTiFLAGGuidance.pdf
[3] Accountability Framework initiative, Accountability Framework and guidance for companies: https://accountability-framework.org/
[4] GHG Protocol, Frequently Asked Questions: Land Sector and Removals Standard, questions 10 and 18: https://ghgprotocol.org/blog/frequently-asked-questions-land-sector-and-removals-lsr-standard
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
