Energy Absolute is generating the carbon credits by launching a fleet of 4,000 electric buses in Bangkok. (Photo: EA Group)
Thai electric bus operator, Energy Absolute, announced on Jan 8 that it had sold the first carbon offsets under a new system established by the Paris Agreement to a Swiss fossil fuel group, a major landmark for putting into action the United Nations climate accord.
The Paris Agreement allows for governments and companies to offset some of their emissions by paying for steps to cut climate pollutants elsewhere. Those offsets are packaged as credits, each equivalent to reducing one metric ton of carbon dioxide emissions.
However, some environmentalists criticize carbon offsets, saying this allow pollution to continue when the focus should be on eradicating it.
Switzerland's KliK Foundation, which represents fuel importers, said that it had completed the first purchase of 1,916 carbon credits from Thailand's Energy Absolute in last December.
Chatrapon Sripratum, an EA executive overseeing the project, said. " We are pioneers. This market will really boom in the future."
Energy Absolute is generating the credits by launching a fleet of 4,000 electric buses in Bangkok.
The executive said the sales price was over $30 per credit, declining to give the exact value of the deal.
Climate negotiators spent years finalizing the rules for offsets, with many details still under discussion at annual U.N. climate negotiations, most recently at COP28 in Dubai.
This means that the deal of EA group and KliK can influence a nascent market if the final U.N. rules follow their lead. But it also poses the risk that they will need to retroactively revise their transaction.
"There's no clear rule saying how this needs to be done, and in that sense being the first might be an advantage in the long run, but, at first, it's really hard work and also a lot of cost," said Marco Berg, the managing director of KliK.
The Swiss government compelled KliK by obligating fuel importers to offset a steadily increasing percentage of their emissions, either domestically or internationally through Paris Agreement compliant credits.
According to Berg, KliK has agreed to buy offsets for up to 1.5 million tons of CO2 emissions through 2030 from EA group, representing just a portion of the 20 million credits it foresees needing to buy by decade's end.
Dubbed as the “Tesla in Thai”, EA group anticipates a minimum of 20% revenue growth this year, primarily driven by the escalating demand for EVs in Thailand.
The tourism sector’s recuperation and company demand for employee shuttle services are likely to drive sales of EA’s electric buses, contributing significantly to the revenue, according to the group.
EA also entered two new businesses last year: community waste management and sustainable aviation fuel, also known as biofuel for aircraft.
Thailand currently has around 2,200 public transport operators using electric buses. The number is forecasted to rise to 4,000 by 2024. The transition to EVs by bus operators, driven partly by rising fuel prices and the aim to lower maintenance costs, is expected to fuel this increase.