DoJ: No more limit on foreigners utilizing renewable energy resources

PURSUANT to the request of the Department of Energy (DoE), the Department of Justice (DoJ) issued a legal opinion that revisited foreign investment limits in the exploration, development and utilization (EDU) of solar, wind, hydro and ocean/tidal energy resources in relation to Section 2, Article 12 of the 1987 Constitution, which states that the EDU of natural resources, including all forces of potential energy, is limited to Filipino citizens or entities whose capital is at least 60-percent owned by Filipino citizens. Put differently, the foreign equity participation for the EDU of natural resources is limited to 40 percent.

On Sept. 29, 2022, the DoJ, through DoJ Opinion 21, Series of 2022, accepted the DoE's contemporary views on the matter and adopted an innovative and pioneering interpretation of the term "natural resources" in relation to the term "all forces of potential energy" under the Constitution. The DoJ opined that the EDU of kinetic energy (energy from water, marine current, wind, solar or the ocean) should not be subjected to the 40-percent foreign equity limitation under Section 2, Article 12 of the Constitution because such energy resources are beyond the ambit of the term "natural resources" as used in the said section and that the term "all forces of potential energy" should be understood in its technical sense, which necessarily excludes kinetic energy.