Thai businesses are eager for the country’s new government, which came into power last month, to implement long-awaited regulatory frameworks aimed at tackling climate change and accelerating decarbonisation.
The two most anticipated policies by industry are Thailand’s power development plan (PDP), which could pave the way for greater renewable energy adoption, and the country’s climate change act, said Dr Thanyaporn Krichtitayawuth, executive director of the United Nations Global Compact Network (UNGC) Thailand.
Regulatory uncertainty has thus far been the biggest hindrance to Thai companies increasing their investments in decarbonisation agendas and solutions, she said at the Thailand edition of Eco-Business’ flagship summit Unlocking capital for sustainability 2025 on Tuesday.
“There is money and financial support [for decarbonisation] but we cannot unlock that capital because there are still a lot of issues with regulation,” Krichtitayawuth said in a panel discussion.
Of UNGC Thailand’s 20,000-plus members, only 1,400 have pledged carbon neutrality – and while those companies can have developed action plans, they are struggling to meet their near term emissions targets, she said.
Krichtitayawuth expressed hope that Thailand’s new government will expedite the PDP, which had been initially scheduled for implementation from May 2024 to 2037, but has yet to be approved by Thailand’s National Energy Policy Council.
She said that UNGC Thailand would advocate for an increase in the targeted share of renewable energy and include a timeline for the introduction of small modular reactors to add nuclear power to the country’s energy system.
Meanwhile, Thailand’s Climate Change Act is anticipated to be tabled in parliament within the next three sittings, said Krichtitayawuth.
Key provisions under the Act include a mandatory emissions trading scheme (ETS), the establishment of a carbon border adjustment mechanism (CBAM) modelled after the European Union’s taxation system of the same name, an enhanced carbon tax framework and mandatory corporate emissions reporting.
Krichtitayawuth expects this to galvanise the Thai economy towards decarbonising their operations and products, as businesses which do not produce low-carbon products will have to pay higher taxes.
The new Act will also establish a Climate Fund to support innovation for emissions reduction solutions and climate adaptation. It will be financed by revenues from the ETS and carbon-related taxes.
Experts, however, have said that Thailand’s government still needs to strengthen its institutions and fortify legislation for the Climate Change Act to be truly effective.
Thailand’s newly appointed prime minister Anutin Charnvirakul, who had been sworn in on 5 September, told parliament that environmental issues are one of four immediate threats that his government aims to address. This included plans to bring forward Thailand’s commitment to achieving net-zero emissions to 2050, from a previous target of 2065.
Charnvirakul is the country’s third prime minister in two years. Paetongtarn Shinawatra was removed as prime minister in late August due to ethical misconduct in handling the country’s border dispute with Cambodia.
Public-private collaboration needed
In terms of the availability of climate and transition finance, businesses are less worried about not being able to access adequate financing given that banks have been supportive of feasible climate and transition plans.
“If companies have good and responsible transition plans, banks will always be there [to support us with transition finance] – that is according to our experience for over a decade now,” said Somruedee Chaimongkol, senior executive officer and former chief executive officer of integrated energy company Banpu.
“That is why we need to focus more on the collaboration of the government, so they can liberalise the energy sector and we can have an energy trading platform,” she said at the same event.
A liberalised energy market that allows for third-party access would significantly accelerate Thailand’s decarbonisation, said Chaimongkol. Enabling third-party access would mean that renewable energy producers which do not own or operate the grid could use it to transpport and sell clean electricity. Policies that enable net energy metering, a billing mechanism that allows individuals or companies to produce and use their own renewable energy at any time, would also help, she said.
UNGC’s Krichtitayawuth agreed, adding that a combination of new renewable energy projects and adding battery energy storage can pave the way for low-carbon electricity to be less than four baht per kilowatt hour. Electricity prices currently range between 4.2 and 4.3 baht per kilowatt hour.
When it comes to existing energy infrastructure however, Thailand may still need the support of public funds to finance the transition away from fossil fuels, said Chow Wong Yuen, chief sustainability officer at United Overseas Bank (Thai).
“What we have realised over time is that even if we want to retrofit gas plants to make them more cost-efficient, the cost of this retrofitting has gone up through the roof,” he said. “New solar builtouts are cheap, but the economics of making the existing infrastructure more efficient may not make sense anymore.”
As such, some government intervention and public sector technical expertise may be needed to identify areas in existing infrastructure that are worth upgrading, said Chow.
He pointed out that smaller scale, government-led initiatives in Thailand have proven effective, with an example being a sustainable tourism initiative led by the Department of Climate Change and Environment in Phuket. The initiative saw the government partnering more than 20 established for upgrades to meet the Green Hotel Plus standard, which involves assessing and finding ways to lower their carbon footprints. It aims to certify some 600 hotels by March 2026. Reports suggest that it has already helped raise awareness about renewable energy certificates (RECs) among non-industrial sectors.
“This shows that a micro-project pushed by the government can succeed, rather than big plans for public-private partnerships,” said Chow.