The Stock Exchange of Thailand (SET) has announced new activation measures to fully implement the Emission Trading System (ETS) as part of the country’s broader efforts to reach net zero emissions by 2065. This initiative aligns with Thailand’s commitment to carbon footprint management and its response to the voluntary carbon market activation and the Carbon Border Adjustment Scheme (CBAM).
Strengthening Carbon Trading Framework
SET currently operates the ‘SET Carbon’ platform, which manages industrial carbon emission data, following a memorandum of understanding (MOU) signed in January with the Ministry of Natural Resources and Environment and the Export-Import Bank of Thailand. The partnership aims to drive cooperation in achieving Thailand’s long-term climate goals.
According to the Climate and Energy Cooperation Center under the Ministry of Foreign Affairs, the Thai government plans to fully implement its national emissions trading system by 2030. Under this system, companies will be able to offset up to 15% of their greenhouse gas emissions with carbon credits—significantly higher than Singapore’s cap of 5% under its carbon tax framework.
Rapid Growth in Thailand’s Voluntary Carbon Market
Thailand’s Voluntary Carbon Market (VCM) has already seen significant expansion, with the total carbon credit volume surging 314% year-on-year to 1.19 million tons in 2022, while the price per ton of carbon credits rose 219% year-on-year to 108.22 baht (approximately 4,160 won). This rapid growth reflects increasing private-sector participation in carbon trading.
Bangkok’s E-Bus Program: A Model for Carbon Reduction
As part of its decarbonization strategy, Thailand is advancing the ‘E-Bus Program,’ a pioneering carbon market project under Article 6 of the Paris Agreement. The initiative focuses on deploying clean energy electric buses in Bangkok, a city facing severe air pollution. The program, which enables Thailand to measure and sell carbon reduction performance, is the first of its kind in Asia and the second globally.
The Klik Foundation, a Swiss government-led initiative, is funding the program, allowing Switzerland to take responsibility for the resulting carbon reductions. A bilateral agreement supporting the initiative was signed between the two countries’ environment ministers in March 2023.
Legal Framework for Net Zero Implementation
To establish a solid regulatory foundation for its carbon trading mechanisms, Thailand’s Ministry of Natural Resources and Environment is actively working on the ‘Climate Change Act,’ which will legislate a national carbon emissions trading system and carbon tax. This law aims to provide a legal basis for carbon reduction measures aligned with the country’s net zero 2065 target.
With these initiatives, Thailand is positioning itself as a regional leader in carbon trading and emissions reduction, ensuring that its industries can transition toward a more sustainable future while remaining competitive in the global economy.
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