Thailand

Thailand ranks 24th in this year’s CCPI. It receives mixed ratings, with a high in GHG Emissions, medium in Energy Use, low in Climate Policy, and very low in Renewable Energy.

First Climate Change Act to Address Net Zero

Thailand is currently finalising its first Climate Change Act. The policy’s commitments include carbon neutrality by 2050 and net zero emissions by 2065. The Act will provide the legal framework for implementing several carbon pricing instruments, including a carbon tax covering oil-related products and an Emissions Trading System (ETS) covering high-emissions facilities and entities. The CCPI country experts welcome this climate action and note that details on the tax price and emissions cap for the ETS must still be defined. The public hearing was completed and the Act is expected to be proposed to the cabinet in the coming months.

Both the carbon tax and ETS could benefit Thailand in multiple ways. Implementing either would directly support Thailand’s goals under the Paris Agreement to reduce GHG emissions, contributing to Thailand’s 2065 net zero target. A well-designed ETS or carbon tax would also give predictable carbon prices, fostering investor confidence and promoting private-sector investment in cleaner technologies. Also, as the EU’s Carbon Border Adjustment Mechanism (CBAM) imposes a fee on both domestic and imported goods based on their carbon emissions, through the carbon tax and/or ETS, Thai industries exporting CBAM goods to the EU could reduce CBAM certificate fees and Thailand could use carbon pricing revenue to reinvest in green technology, supporting domestic innovation and job creation.

A Low Renewable Energy Share, But Targets Are Being Set

Thailand’s electricity market uses an enhanced single-buyer model, wherein the state utility largely controls electricity purchasing and distribution. This structure limits the energy trading potential and constrains the development of a competitive private-sector renewable energy market. The current renewable energy share in Thailand’s energy mix is low. The National Energy Plan (2022) includes the aim of achieving 50% renewable energy for new power generation capacity by 2050, with increased use of electric vehicles (EVs).

Recently, Thailand announced it would pilot a direct Power Purchase Agreement mechanism that enables large-scale energy consumers, such as data centres, to purchase renewable energy directly from power producers. Thailand’s upcoming utility green tariff mechanism allows consumers to purchase renewable energy directly from state-owned utilities. There are also current incentives for producing and selling EVs, leading to higher sales; 80,000 EVs were sold in the previous year, accounting for about 10% of new vehicle sales. Efforts are needed to increase clean energy, and the energy sector currently is the largest contributor to GHG emissions.

Thailand Taxonomy Phase 2, currently open for public consultation, focuses on defining sustainable economic activities in the agriculture, real estate, manufacturing, and waste management sectors. This taxonomy provides guidance for businesses and government to align with international and Thai environmental standards, promoting green finance and investments.

The experts highlight the voluntary actions of Thai businesses, which have formed several associations, such as the Thailand Carbon Neutral Network, RE100 Thailand Club, and Carbon Markets Club, stimulating voluntary climate actions in businesses.

Key Outcomes

CCPI Experts

The following national experts agreed to be mentioned as contributors for this year’s CCPI:

• Boonrod Yaowapruek (Creagy)