Mitsubishi and DGA join ACEN, GenZero, and Keppel to drive energy transition with transition credits

Mitsubishi Corporation and its subsidiary, Diamond Generating Asia, Limited, joined ACEN, GenZero, and Keppel Ltd. in a pioneering collaboration aimed at accelerating the early retirement of coal-fired power plants in favour of clean energy, through the innovative use of Transition Credits. The initiative focused on a 246 MW coal-fired power plant in the Philippines and sought to replace its generation capacity with reliable, renewable alternatives.

Mitsubishi and DGA formalised their participation by signing a Deed of Accession to the Memorandum of Understanding established in 2024 by ACEN, GenZero, and Keppel. The original MOU signing was witnessed by Singapore’s Minister for Sustainability and the Environment, Ms Grace Fu, and the Philippines’ secretary for Environment and Natural Resources, Ms Maria Antonia Yulo Loyzaga.

This collaboration built on ACEN’s earlier success in implementing the world’s first market-based Energy Transition Mechanism. The landmark 2022 transaction involved the divestment of the 246 MW South Luzon Thermal Energy Corp. (SLTEC) coal plant, with a commitment to retire the asset by 2040—effectively halving its typical 50-year lifespan and transitioning to renewable energy. ACEN later announced its intent to bring forward the retirement target to 2030.

The Transition Credits mechanism was designed to play a critical role in facilitating a just transition, by making renewable energy replacements economically viable and supporting displaced workers and local communities. These credits, issued for high-integrity emissions reductions, were intended to reward projects that retired coal plants ahead of schedule and replaced them with clean power generation.

The addition of Mitsubishi and DGA to the partnership enhanced access to the Japanese market, which played a vital role in global decarbonisation efforts and was expected to support Japan’s emissions trading framework.

Shinichiro Suzuki, CEO of DGA, stated:

“We were honoured to join this landmark initiative, which represented one of the world’s first credible and scalable Transition Credits schemes. What made this project unique was not only the early retirement of a coal-fired power plant, but also its replacement with equivalent renewable energy capacity—enhancing both clean energy deployment and the credibility of the carbon credits. This initiative aligned with our strong commitment to decarbonisation and contributed to dialogues between Japan and the Philippines on emissions trading.”

Frederick Teo, CEO of GenZero, added:

“Asia’s energy transition poses a distinct challenge: balancing decarbonisation, economic growth, and energy security. Transition Credits offer a powerful mechanism to mobilise capital for coal plant retirement while ensuring affordable clean energy and a just transition for communities. Mitsubishi and DGA’s participation strengthened this mission and provided a scalable model for sustainable energy transformation.”

Cindy Lim, CEO of Keppel’s Infrastructure Division, commented:

“We welcomed Mitsubishi and DGA’s involvement, which opened further opportunities in voluntary and emerging compliance markets for Transition Credits. Through this partnership, we aimed to advance dispatchable renewable energy solutions with innovative financing models that supported Southeast Asia’s sustainable future.”

The Transition Credits initiative was designed to be implemented under Article 6 of the Paris Agreement, with corresponding adjustments and adherence to the highest standards of environmental and social integrity. The parties to the MOU also explored the adoption of a robust methodology to reinforce the credibility of the mechanism.

A Model for Scalable Global Transformation

Since 2023, ACEN had worked in partnership with the Monetary Authority of Singapore and The Rockefeller Foundation to develop a Transition Credits methodology that quantifies emissions avoided through early coal retirements, while incorporating social and environmental safeguards. Following extensive public consultation, the methodology gained recognition at the 2025 GenZero Climate Summit in Singapore, where Verra CEO Mandy Rambharos announced its approval under Verra’s Verified Carbon Standard programme as part of the Coal to Clean Credit Initiative.

This approval laid the groundwork for high-integrity Transition Credits to be generated by coal plants retired ahead of schedule, ensuring community protection, emissions reduction, and energy security through clean replacements. The model provided a financial incentive for plant owners to exit coal operations without compromising consumer affordability or investor returns.

A Strategic Alliance for Global Impact

The entry of Mitsubishi and DGA marked a pivotal step toward mainstreaming the Transition Credits framework. If successful, this pilot initiative could be replicated globally, catalysing the early retirement of coal plants and accelerating the shift to renewable energy.

Eric Francia, CEO of ACEN, remarked:

“This partnership represented a significant milestone in addressing the challenges of energy transition. By pioneering the Transition Credits mechanism, we demonstrated a credible pathway for coal-reliant economies to transition sustainably. We hope this serves as inspiration for other coal plant owners to begin their clean energy journey.”

Mitsubishi and DGA had previously partnered with ACEN, Ayala Corporation’s listed energy platform, on renewable projects such as wind farms in Ilocos Norte. Their renewed alliance with ACEN, GenZero, and Keppel further deepened their collaboration and accelerated the use of Transition Credits as a credible mechanism for clean energy development.

This strategic partnership marked a new chapter in global climate finance and energy transformation. By combining the strengths of industry leaders from Southeast Asia and Japan, the initiative set a powerful precedent for delivering high-integrity, scalable solutions that support a just and inclusive transition from coal to clean energy—regionally and globally.

For more information visit www.acenrenewables.com