DEPARTMENT CIRCULAR NO. DC2023-05-0017 PRESCRIBING THE GUIDELINES ON THE PHILIPPINE TRANSPORT VEHICLES FUEL ECONOMY LABELING PROGRAM (VFELP) FOR COMPLIANCE OF VEHICLE MANUFACTURERS, IMPORTERS, DISTRIBUTORS, DEALERS, AND REBUILDERS WHEREAS, Section 2 of Republic Act (RA) No. 7638, as amended, or the Department of Energy (DOE) Act of 1992 states that it is the policy of the State to ensure a continuous, adequate, reliable, and economic supply of energy through, among others, judicious conservation, renewal, and efficient utilization of energy, to keep pace with the country's growth and economic development; WHEREAS, RA 11285 or the Energy Efficiency and Conservation (EEC) Act declares the policy direction of the government in terms of energy efficiency, conservation, sufficiency, and sustainability in the country; WHEREAS, Section 17 of the EEC Act directs the DOE, as the lead agency in the implementation of said Act, to develop the fuel economy performance labeling requirements and fuel efficiency testing guidelines with the assistance of the Department of Environment and Natural Resources (DENR) and the Department of Transportation (DOTr); WHEREAS, Rule XII of the EEC Act Implementing Rules and Regulations (EEC-IRR), mandates the Energy Labeling for Transport Vehicles (Section 60) and Examination, Testing and Verification (Section 61); WHEREAS, Rule XVIII of the EEC-IRR enumerated the prohibited acts and enforcement methods, as well as the administrative and criminal liabilities; WHEREAS, Section 5 of the DOE Department Circular (DC) No. DC2020-06-0015 states that the coverage for fuel economy performance and labeling requirements for transport shall be made after public consultation and coordination with the DENR and DOTr, while DC No. DC2020-10-0023 provides the policy framework for the development of the fuel economy rating, fuel economy performance for transport vehicles and related EEC policies for transport vehicles and other support infrastructures in the country; WHEREAS, Section 11 (k) of the Implementing Rules and Regulations of the Electric Vehicle Industry Development Act (EVIDA-IRR) mandates the DOE on the enforcement of electric vehicles (EVs) to comply with the Fuel Economy Performance for Transport Vehicles under the EEC Act; WHEREAS, conservation and efficient utilization of energy are among the major strategies of the Government to realize energy self-sufficiency and reduce environmental impacts of energy generation and utilization as emphasized in the Philippine Energy Plan (PEP) and the National Energy Efficiency and Conservation Program (NEECP); WHEREAS, the PEP covers the Energy Efficiency Program for land, air and water transport for the medium and long-term planning of the DOE, particularly on compliance with the EEC Act and other related DCs; WHEREAS, after a series of meetings, the Inter-Agency Working Group (IAWG) created under Section 4 of DC No. DC2020-10-0023 has supported the recommendation of the DOE for the institution of the transport vehicles labeling program in the country; WHEREAS, the mandatory implementation of the VFELP will lead to, among others, the empowerment of consumers by enabling them to validate information provided by vehicle manufacturers, importers, distributors, dealers, and rebuilders which will facilitate the selection of fuel-efficient transport vehicles, realization of fuel savings, elimination of fuel-inefficient vehicles in the market, and reduction of greenhouse gas emissions; NOW, THEREFORE, in consideration of all the foregoing premises, the DOE hereby imposes and promulgates the following VFELP Guidelines: Section 1. Title. This DC shall be known as the "VFELP Guidelines". Section 2. Scope and Application. This DC shall apply to all manufacturers, importers, distributors, dealers, and rebuilders of all transport vehicles. Section 3. Definition of Terms. For the purposes of this DC, its Annexes, and the VFELP Implementing Guidelines, the following terms and definitions shall apply: a. Applicant — refers to any natural or juridical person engaged in the manufacturing, importing, distributing, rebuilding, dealing, retailing and/or selling of transport vehicles who registers with the DOE in compliance with the requirements of this DC and the VFELP Implementing Guidelines; b. Code of Practice on Fuel Economy Performance (COPE) — refers to the particular product requirement (PPR) which is an integral part of the VFELP Implementing Guidelines; c. DOE Monitoring Team — refers to a core group of personnel from the Energy Utilization Management Bureau (EUMB), and/or other DOE-authorized representatives to assist the agency in the conduct of monitoring and verification activities as specified in the VFELP Implementing Guidelines; d. Enforcement — refers to an activity or operation including on-site inspections where DOE detects violations or possible violations for the purpose of checking the compliance with the provisions of this DC; e. Fuel Economy Label (FEL) — refers to the prescribed tag/sticker/marker in this DC that bears the DOE logo and essential fuel economy performance information compliant with the PPR; f. Fuel Economy Performance Rating (FEPR) — refers to the distance travelled against the fuel and/or energy consumed by a transport vehicle; g. Minimum Energy Performance for Transport Vehicles (MEPV) — refers to the minimum fuel economy performance rating for transport vehicles set by the DOE as specified in the VFELP Implementing Guidelines; h. Monitoring — refers to an activity where the DOE systematically observes, checks, and keeps a record of compliance with the requirements of this DC and the VFELP Implementing Guidelines; i. National Energy Efficiency and Conservation Database (NEECD) — refers to a centralized, comprehensive, and unified database on national energy consumption, the application and use of energy efficient and renewable energy technologies, and other critical and relevant information to be used for evaluation, analysis, and dissemination of data and information related to energy efficiency and conservation; j. Particular Product Requirements (PPR) — refer to a component of the VFELP Implementing Guidelines that provides the detailed technical requirements of transport vehicles, particularly requiring the attachment of appropriate fuel economy label; k. Road Transport Vehicle — refers to land vehicle conveying cargo or passengers, regardless of size or weight classification designed to operate on a road; l. Transport Vehicles — refer to land, air, or water vehicles conveying cargo or passengers, regardless of size or weight classification; and m. Verification — refers to the process of validating the correctness of the FEPRs and other information on the fuel economy label, and/or the process of establishing through tests, the veracity and accuracy of claims of the Applicant on fuel economy. Section 4. Implementation Mechanism. The EUMB shall be responsible for the formulation, promulgation, enforcement, review, and evaluation of the VFELP policy and for implementing monitoring activities to ensure the industry player's compliance. EUMB shall discharge the functions through the Alternative Fuels and Energy Technology Division (AFETD). The EUMB may seek the assistance of the Field Offices (FOs) for market monitoring, and enforcement to ensure industry players' compliance with the VFELP in coordination with the local government units and other national government agencies. The Information Technology Management Services (ITMS) shall provide support in maintaining the NEECD and the online VFELP services. The Legal Services — General Legal Services Division (LS-GLSD) shall be responsible for the adjudication for violations or prohibited acts under the EEC Act, the EEC-IRR, this DC, VFELP Implementing Guidelines, and any related issuances for non- compliant transport vehicles, in cooperation with EUMB. Section 5. Covered Transport Vehicles. Under this DC, the VFELP will initially cover road transport vehicles powered by an internal combustion engine (ICE) and EVs with reference to Section 5 of the EVIDA-IRR: Provided, That additional transport vehicles, specifically for water and air transport vehicles, shall be included within the coverage of the VFELP upon coordination and consultation with relevant government agencies and stakeholders. Section 6. Responsibilities of Applicants. Applicants shall have the following responsibilities: 6.1. Ensure that their vehicles, for which an application of fuel economy label has been approved, comply with the requirements of the VFELP and its Guidelines; 6.2 Make available, and if required, submit reportorial documents to EUMB, as may be specified in the VFELP Implementing Guidelines; 6.3 Pay the application fees in accordance with Annex A of this DC (Table of Fees) and be responsible for all attendant costs such as verification testing (drawing / transport of samples and other related fees); 6.4 Print and place the fuel economy label on the vehicles: Provided, That for vehicles on sale, attachment of fuel economy label is on the visible side of the transport vehicle; and 6.5 Cooperate fully with the DOE Monitoring Team during the conduct of enforcement, monitoring, and verification activities. Section 7. Responsibilities of Manufacturers, Importers, Distributors, Dealers, and Rebuilders. The following are the responsibilities of manufacturers, importers, distributors, dealers and rebuilders: 7.1. Ensure that the transport vehicles covered by the VFELP and for sale in stores have the fuel economy labels attached to them on the location prescribed in this DC and are visible to the buyers; 7.2 Must exhibit or mention the fuel economy labels in the promotion of their vehicle products such as but not limited to publications and advertisements; and 7.3. Cooperate fully with the DOE Monitoring Team during the conduct of enforcement, monitoring, and verification activities. Section 8. Technical Working Groups (TWGs). To facilitate the development of PPRs, TWGs shall be created as interim bodies of technical personnel which shall be participated by the IAWG created under DOE DC No. DC2020-10-0023. TWGs shall be convened as necessary to discuss technical matters that pertain to PPRs and issues on special cases such as: 8.1 New technology not yet covered in the current VFELP 8.2 Expansion and updates on the VFELP The membership and composition of the TWG shall be determined according to specific technical issues such as products, test methods, technical requirements, coverage, etc. AFETD shall be the convener of the TWG for the development and formulation of the PPRs, development of technical requirements, conformity assessment procedures, and recognition of testing laboratories. Consistent with Section 5 of this DC, the output of the TWG on the VFELP Implementing Guidelines and the PPRs shall be for approval of the EUMB: Provided, That any expansion of covered transport vehicle will be endorsed by EUMB for approval of the DOE Secretary. Section 9. Implementing Guidelines. The DOE, through EUMB, shall issue the VFELP Implementing Guidelines on a per transport vehicle basis, which will include, among others, administrative, application procedures, general, technical, and PPR as well as the procedure for the monitoring, verification, and enforcement of the VFELP: Provided, That VFELP Implementing Guidelines shall only be issued after public consultation: Provided further, That the effectivity and timelines of any issued VFELP Implementing Guidelines will be mutually agreed upon by the DOE and the industry stakeholders. Section 10. Code of Practice on Energy Labeling of Transport Vehicle. Pursuant to Section 15 of the EEC Act, the Code of Practice on Energy Labeling of Products (COPE) provides for the calculation method for the FEPR and shall accompany each VFELP Implementing Guidelines issued pursuant to Section 9 of this DC. Section 11. Compliance Requirements. For effective implementation, all applicants of VFELP-covered transport vehicles shall ensure that the fuel economy labels, prescribed by the DOE, are displayed accordingly, and shall provide information that shall assist consumers to make informed decisions on such products. All applicants shall also submit annually to DOE, reckoning on the date of approval of the fuel economy labels, information on the inventory of sales and technical files of compliant models for estimating the fuel savings related to the implementation of these requirements. The DOE may issue template forms through the VFELP Implementing Guidelines to facilitate compliance. Section 12. Enforcement, Monitoring, and Verification. The enforcement, monitoring, and verification of compliance by applicants with the VFELP requirements in the various regions of the country shall be conducted at least once a year. Section 13. Prohibited Acts. Pursuant to the EEC Act and the EEC-IRR, any person or entity found in violation of any of the following shall be subject to the appropriate criminal, civil and/or administrative sanctions as follows: 13.1 Failure to comply with fuel economy label; 13.2 Removing, defacing or altering any fuel economy label before the product is sold to the first retail purchaser or leased to the first lessee; 13.3 Failing to provide accurate information or the provision of false or misleading information as required to be submitted under the EEC Act, the EEC-IRR, this DC, and other issuances of the DOE; 13.4 Selling, leasing, or importing transport vehicles that do not comply with FEPR and/or MEPV; 13.5 Willfully refusing to submit to an on-site inspection; 13.6 Failing or willfully refusing to submit any of the reports required herein; 13.7 Failing to comply with issued orders of the DOE in the discharge of its enforcement powers; 13.8 Failure to register VFELP-covered transport vehicles; and 13.9 Violating any provisions of the EEC Act, EEC-IRR, codes, and guidelines. Section 14. Administrative Procedures. The DOE may initiate, motu proprio or upon filing of complaint, an administrative proceeding against any person or entity who commits any of the prohibited acts under Section 30 of the EEC Act and Section 80 of the EEC-IRR, or other related issuances. The administrative proceedings will be conducted to determine the culpability of offenders and the applicable penalties in accordance with the provisions of the EEC Act, its IRR, and this DC. Section 15. Criminal Liability. The responsible officers and employees of any establishments or organization who willfully commit any of the prohibited acts under Section 30 of the EEC Act shall upon conviction, suffer the penalty of imprisonment of one (1) year to five (5) years or a fine ranging from a minimum of One Hundred Thousand Pesos (PhP100,000.00) to One Hundred Million Pesos (PhP100,000,000.00) or twice the amount of costs avoided for non-compliance, whichever is higher, or both, upon the discretion of the court. Any person who willfully aids or abets the commission of the prohibited acts, under Section 30 of the EEC Act or who causes the commission of such acts by another, shall be liable in the same manner as the principal. In cases of association, partnership or corporation, the penalty shall be imposed on the partner, president, chief operating officer, chief executive officer, director, or officer responsible for the violation. Section 16. Penalties. Upon the determination that any person or entity has committed any of the prohibited acts under Section 13 hereof, the DOE may issue an order against the said person or entity through the imposition of administrative fines and penalties in accordance with Annex B of this DC (Schedule of Fines and Penalties). Section 17. Publication. The DOE shall publish a biannual updated list of compliant transport vehicles on the DOE website and newspapers of general circulation indicating the vehicle brand name and model. An annual report on the status of the VFELP implementation shall be published which shall include, among others, compliance rate by applicants with fuel economy labeling requirements as well as improvement in the fuel efficiency of transport vehicles sold to consumers in the Philippines. Section 18. Information, Education, and Communication (IEC) Activities. Pursuant to Section 85 of the EEC-IRR, the DOE shall develop and undertake a national awareness and advocacy program covering energy efficiency and conservation and pursue partnerships with relevant stakeholders for the implementation of this DC. Section 19. Amendment Clause. The DOE may revise, supplement, and issue related guidelines, circulars, and other subsidiary issuance as it deems necessary for the effective implementation of the various provisions of this DC. Section 20. Repealing Clause. The provisions of other circulars, orders, issuances, rules, and regulations, which are inconsistent with the provisions of this DC are hereby repealed, amended, modified, or superseded accordingly. Section 21. Separability Clause. If for any reason, any section or provision of this DC is declared unconstitutional or invalid, such parts not affected shall remain in full force and effect. Section 22. Effectivity. This DC shall take effect fifteen (15) days following its publication in at least two (2) newspapers of general circulation. Copies of this DC shall be filed with the University of the Philippines Law Center — Office of the National Administrative Register. Issued in May 2023 at the DOE, Energy Center, Rizal Drive cor. 34th Street, Bonifacio Global City, Taguig City. RAPHAEL P.M. LOTILLA Secretary --- ## Annex A. Table of Fees [Note: OCR table partially illegible — amounts below are as captured; verify against original.] | Name of Activity | Fee (in PhP) | |---|---| | Application for Company Registration | 3,000 | | Application for Transport Vehicle Registration | [per transport vehicle — amount not captured] | | Request for Fuel Economy Label Issuance | [per label — amount not captured] | --- ## Annex B. Schedule of Fines and Penalties The following fines and penalties as stated in Section 16 of the VFELP Guidelines shall apply. Fines are on a "per vehicle model" basis. | Violation | PhP 10,000–200,000 | PhP 200,000–500,000 | PhP 500,000–1,000,000 | |---|---|---|---| | Selling of non-registered transport vehicle | 1st Offense | — | — | | Removal, defacing, altering, or absence of correct fuel economy label before sale to first retail purchaser or lease to first lessee | 1st Offense | 2nd Offense | 3rd Offense | | Failing to provide accurate or providing false/misleading fuel economy information | 1st Offense | — | — | | Selling, leasing or importing transport vehicle not complying with FEPR and/or MEPV | 1st Offense | — | — | | Willfully refusing to submit to an on-site inspection | 1st Offense | 2nd Offense | — | | Failing or willfully refusing to submit required reports | 1st Offense | 2nd Offense | 3rd Offense | | Failing to comply with issued orders of the DOE | 1st Offense | — | — | | Failure to register VFELP-covered transport vehicles | [amount not captured in OCR] | | | | Violating any provisions of the EEC Act, EEC-IRR, codes and guidelines | 1st Offense | 2nd Offense | 3rd Offense |