Thailand has sought to become a regional leader on Responsible Business Conduct (RBC). In October 2019, Thailand became the first country in Asia to adopt a National Action Plan on Business and Human Rights (NAP), as recommended by the United Nations. Thailand’s NAP seeks to strengthen RBC across four areas: 1) labor; 2) community, land, natural resource, and environment; 3) human rights; and 4) cross-border investment and multi-national enterprises. Implementation of this plan is ongoing.
On labor, Thailand has taken steps to improve its legal and regulatory framework for protecting labor rights, partially in response to high-profile abuses in the fishing industry. While conditions have improved in the fishing industry, concerns remain regarding the ability of migrant workers to form unions or serve as union officials.
Regarding the environment, Thailand has introduced a range of environmental laws and regulations which the government enforces, although some civil society groups have called for stronger enforcement of laws related to Environmental Impact Assessments.
Thailand has also taken steps to adopt a taxonomy system to support sustainable investment. At the end of 2022, the Bank of Thailand and the Securities and Exchange Commission put out the first draft of the Thailand National Taxonomy for public consultations https://www.bot.or.th/Thai/SustainableBanking/Documents/Thailand_Taxonomy_phase_1.pdf . The draft taxonomy focuses on defining activities that reduce greenhouse gas emissions to achieve climate change mitigation objectives set out in Thailand’s climate policy and international obligations. The current draft taxonomies cover only energy and transportation, while other sectors (industry, agriculture, and water & wastewater supply, processing & remediation) will be addressed later.
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Thailand places high priority on climate change as one of the key challenges affecting communities’ livelihood, economic growth, and sustainable development. The country is among the top 10 countries most vulnerable to climate change and the world’s 20th largest emitter of greenhouse gases. Since 2007, Thailand has incorporated climate change into its national economic and social development plans, including at the highest policy level under the National Strategy (2018-2037) to ensure long-term continuity of the issue alongside other economic and social considerations, including poverty eradication.
On November 2, 2022, Thailand submitted its second updated National Determined Contribution to the United Nations Framework Convention on Climate Change (UNFCCC), reflecting its intention to reduce its greenhouse gas emissions by 30 percent from the projected business-as-usual (BAU) level by 2030, and in line with the long-term goal of carbon neutrality by 2050 and net-zero greenhouse gas emission by 2065 that Prime Minister Prayut Chan-o-cha announced at the 2021 United Nations Climate Change Conference (COP26). Thailand’s total mitigation, for the first time, will consider agriculture, in addition to energy, waste, and industrial process and product use. The level of contribution could increase up to 40 percent, subject to adequate and enhanced access to technology development and transfer, financial resources, and capacity building support across four areas: policy implementation, mitigation and adaptation technology development and transfer, mechanisms, and instruments to support implementation, and climate information and monitoring and evaluation systems.
Thailand is also drafting a new Climate Change Act that will help ensure stronger interagency coordination among authorities and solidify Thailand’s Climate Change Master Plan, which will be revised every five years. Other notable components of the draft law include establishment of a greenhouse gas emissions database, reporting requirements for government and private sector entities (along with penalties for non-compliance), and guidelines for use of the Thailand Environment Fund. Thailand has also developed the National Adaptation Plan (NAP) with the aim to build adaptive capacity and enhance climate resilience in six priority sectors including water resources management, agriculture and food security, tourism, public health, natural resources management, and human settlements and security.
On December 22, 2022, the Thai cabinet approved the proposal by the Ministry of Natural Resources and Environment (MONRE) to set up the Department of Climate Change and Environment to drive country’s efforts to achieve its climate change goals and plans. The new department will reorganize several offices within MONRE. The Climate Change Management and Coordination Division – Thailand’s focal point for the United Nations Framework Convention on Climate Change (UNFCCC) – will be transferred from the Office of Natural Resources and Environmental Policy and Planning (ONEP) and be merged with the Department of Environmental Quality Promotion. At the time of writing, MONRE is in the process of this reorganization and drafting of relevant regulations.
Clean energy technology is featured prominently in Thailand’s climate landscape, since the energy sector is currently the main source of greenhouse gas emissions. The Thai government is actively pursuing foreign investment related to clean energy, electric vehicles, and related industries. Thailand is currently developing a National Energy Plan (NEP) that will further increase the 2037 target of renewable energy to 50 percent in order to meet the new climate goals and align energy production with the government’s “Bio-Circular Green Economy” model. The NEP and the sub plans, including the Power Development Plan, are expected to be finalized in 2023. Private sector investment is a key driver of success.
The Thai government has established a special committee under the supervision of the Deputy Prime Minister/Minister of Energy to support increased investment in this area. In support of these policies, electricity producers can access tax and non-tax incentives from Thailand’s Board of Investment (BOI). The tax incentives include a corporate income tax holiday of six or eight years, depending on the type of power production used in electricity generation. Tax incentives also include custom duty exemptions for the import of new equipment. Thailand also has a feed-in-tariff (FiT) program and additional tax and investment incentives through the BOI. The FiT is designed to accelerate growth in renewable energy investment by offering a guaranteed, above-market price for long-term power purchase agreements (20–25 years). The FiT is currently offered for solar, solar with energy storage, wind, biomass, biogas, and waste-to-energy power production.
Electric vehicles are another key focus area for the Thai government and its “30@30” policy aims to have 30 percent of domestic vehicle production be electric vehicles by 2030. To achieve this, the Thai government in 2022 approved a suite of measures to increase domestic demand and foreign investment in electric vehicles and parts, including a range of tax incentives, subsidies, and other mechanisms. As of March 2023, nine companies have signed up for the Thai government’s EV manufacturing incentive scheme to date. Government procurement practices also allow government agencies to purchase electric vehicles as part of their vehicle fleet.
Thailand is ahead of its peers on creating a carbon crediting mechanism. The World Bank’s State and Trends of Carbon Pricing 2022 lists Thailand as the only country in ASEAN that implements a crediting mechanism. The Thailand Greenhouse Gas Organization (TGO), part of MONRE, has been leading Thailand’s efforts on carbon market development since 2015 through its Thailand Voluntary Emission Reduction Program (T-VER). T-VER is a carbon credits registry and issuance system for domestic trading that occurs “over-the-counter” between two parties. Meanwhile, state-owned utility Electricity Generating Authority of Thailand (EGAT) is leading efforts on Renewable Energy Certificate (REC) issuance. In September 2020, EGAT became the only local issuer of RECs according to the Netherlands’ International REC Standard (I-REC). On September 21, 2022, TGO and the Federation of Thai Industries (FTI) launched its first carbon credit exchange platform “FTIX” as a pilot for carbon credit, renewable energy, and Renewable Energy Certificate (REC) trading.
In 2022 Thailand became the first country in the world to join the Clean Energy Demand Initiative (CEDI), which aims to increase access to renewable energy for the private sector. Thailand also joined the New Zero World initiative, which will help to accelerate decarbonization of its energy systems.