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To achieve carbon neutrality by 2050 and net-zero emissions by 2065, Thailand is preparing to introduce the Climate Change Act. Assistant Minister of the Ministry of Natural Resources and Environment, Rachata Phisitbanakorn, mentioned in a seminar this month that the law may come into effect this year. However, some experts are less optimistic about the timeline.
The act has attracted significant attention due to its broad scope, which includes a national climate change master plan, emission trading scheme, carbon tax system, and carbon credit issues.
In the carbon tax system, tax rates will be determined based on the carbon footprint of goods. The Thai Ministry of Finance will levy carbon taxes on manufacturers or importers to reduce greenhouse gas emissions and address cross-border greenhouse gas leakage issues.
Regarding carbon credit, Thailand plans to establish a carbon credit exchange, and carbon credit trading entities must register with the Thailand Greenhouse Gas Management Organization. In the future, carbon credits will be divided into domestic and international markets.
The Kasikorn Research Center of Kasikorn Bank believes that the Climate Change Act will have a significant impact on industries, particularly in energy, transportation, cement, steel, aluminum, and fertilizer sectors. It is expected that these industries will be required to submit greenhouse gas emission reports and be compelled to pay carbon taxes.
However, the research center believes that the draft details are still incomplete, especially concerning the carbon credit and carbon tax regulations affecting business costs. Therefore, it is expected that the act will not be implemented this year.
Kasiti Ketsuriyonk, Partner in Sustainability and Climate Change Services at Deloitte Thailand, stated that the Climate Change Act serves as an economic instrument for the government. He emphasized that the mechanisms outlined in the bill will be implemented concurrently with existing carbon footprint disclosure regulations, with the goal of assisting both the government and private enterprises in achieving carbon neutrality.
Kasiti further advised that businesses should regard climate change as an organizational risk and manage it appropriately by integrating it into short-term, medium-term, and long-term corporate strategic plans.
He believes that the organization's carbon emission data is the most fundamental requirement of the act. Therefore, it is essential to quickly understand the carbon emission calculation methods and data system management to ensure accurate data provision to the government. This information can serve as a reference for risk management decisions.
The draft of the Climate Change Act completed the public hearing process from February 14th to March 27th and is expected to be submitted to the Cabinet for review by the middle of this year. If the act is successfully enacted, it will be a significant milestone for Thailand's carbon credit trading, prompting further improvements to the country's carbon credit trading system.
