Thailand has taken proactive steps as becoming the second country in Southeast Asia, after Singapore, to implement a carbon tax regime. This commitment highlights Thailand’s dedication to environmental stewardship and addressing the pressing issue of climate change The Emission Trading Scheme, Carbon Tax on Products, and Crediting Mechanism are some of the potential economic instruments to be implemented
This insight article highlights key developments in the carbon tax market in Thailand. and planned initiatives by the country.
Within Thailand, the market for carbon credits is managed by the Thailand Greenhouse Gas Management Organization, or the TGO, which began development of a voluntary carbon market in 2012.
This covered: (i) trading in carbon credits from voluntary reduction programs that met international standards (i.e., verified reductions in emission); and (ii) trading in carbon credits from voluntary reduction programs that met domestic Thai standards (the Thailand Voluntary Emission Reduction Project, or T-VER). In addition, the TGO began operating the Thailand Voluntary Emissions Trading Scheme (TVETS) in 2015, with this initially covering the 10 pilot industries of petrochemicals, cement, iron and steel, paper and paper pulp, food and drink, plastics, oil refining, glass manufacturing, ceramics, and textiles.
Way Forward
The Thai government has set a carbon credit offset limit of 15% significantly surpassing Singapore’s 5% limit. Thailand aims to achieve net-zero emissions by 2065. The government has identified 2,166 facilities across the energy, construction, transportation, and agricultural sectors to be included in the cap-and-trade system.
The Stock Exchange of Thailand (SET) and Intercontinental Exchange (ICE) have signed a Memorandum of Understanding (MoU), effective February 2025, to advance Thailand’s carbon market development.Thailand is set to introduce its voluntary carbon market (VCM) by 2027, as confirmed by the country’s Securities and Exchange Commission. The move comes as part of Thailand’s broader strategy to establish a comprehensive carbon trading system by 2030.
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