Regulation
March 06, 2025
Thailand plans to launch the voluntary carbon market in 2027. (Photo: iStock)
Thailand’s carbon market is still in its early stages, with its Securities and Exchange Commission estimating that the voluntary carbon market (VCM) will be launched by 2027, ahead of the mandatory market.
The cap on carbon credits for offsetting emissions is set at 15%, matching Taiwan’s limit but significantly exceeding Singapore’s 5%. Thai authorities hope this measure will boost the country’s carbon market development.
Nature-based carbon credits to drive voluntary market
Suraphon Buphakposum, Vice President of Sustainability Services Development at the Stock Exchange of Thailand, shared during the Carbon Forward Asia conference in Singapore that the voluntary carbon market is tentatively set to launch in 2027. The details are still under discussion, but it is expected to focus on nature-based carbon credits, particularly those generated through forestry-related projects.
Compared to other Asian countries, Thailand’s offset limit is relatively high. For example, Singapore and South Korea only allow 5% offset, while Taiwan also allows up to 15%. Vietnam has proposed a 20% limit, which is seen as potentially weakening companies’ motivation to reduce emissions.
Thailand plans to fully launch its carbon trading system by 2030. The country has already implemented the voluntary greenhouse gas reduction program (T-VER) and is set to begin imposing a carbon tax of 200 baht per ton (about 5.95 USD) on petroleum products starting in March.
Thailand plans to fully launch its carbon trading system by 2030. (Photo: iStock)
Carbon trading soars to record levels in Thailand
According to the Thailand Greenhouse Gas Management Organization (TGO), the carbon credit transactions under the T-VER program hit a new high from October to December last year, with a total volume of 101,894 tons of carbon credits and a total value of THB 17.78 million (about USD 528,000 ). Most of these credits were derived from renewable energy projects.
Additionally, in December, the price of carbon credits from forestry and agricultural projects in Thailand rose in line with global trends, reaching THB1,700 to 2,076 per ton (about USD 50.5 to 61.7 ), pushing the average price for the quarter up to THB 174.45 (about USD 5.1 ), a 40% increase from the year before. This price is still lower than the carbon tax.
Thailand aims to achieve net-zero emissions by 2065. According to a BloombergNEF report, the Thai government has identified 2,166 facilities across the energy, construction, transportation, and agricultural sectors to be included in the cap-and-trade system. “The launch of the mandatory carbon market depends on the progress of the Climate Change Act. If the bill is passed by Parliament next year, the market could be launched in 2029,” said Buphakposum.
Source: Bloomberg, The Nation
