State-run Electricity Generating Authority of Thailand (Egat) has started trading its Renewable Energy Certificates (REC), with Toyota Motors Thailand the first buyer to support efforts to reduce greenhouse gases.
REC is an economic incentive aimed to encourage power plant owners to produce electricity from clean fuels. Each REC, which certifies the bearer generates one megawatt-hour (MWh) from renewable energy resources, can be traded as an energy commodity.
This market-based instrument was first introduced at the 2015 UN Climate Change Conference, also known as the Paris Accord.
Egat governor Viboon Rerksirathai said Toyota bought 10,000 RECs for 500,000 baht from Egat as part of the company's zero greenhouse emission policy.
The purchase indicates part of the carmaker's production cost went to promoting renewable energy.
Egat converted electricity output to the REC format from its 78.7-megawatt Mae Klong hydropower plant in Kanchanaburi, a pilot project.
The agency adopted REC last year and is authorised by the Netherlands-based International REC Standard to certify power plants participating in the scheme.
According to Egat, its power generation facilities and independent power producers can altogether cut greenhouse gas emissions by 10 million tonnes a year.
Egat deputy governor Jiraporn Sirikum said Egat is in talks with other multinational firms that have indicated interest in REC.
REC has drawn interest from companies in the US, including Facebook, Google and Procter & Gamble, as well as British-Dutch multinational Unilever, said Mr Viboon.
Ninnart Chaithirapinyo, chairman of Toyota Motor Thailand, said REC is one channel that supports the company's plan to cut greenhouse gas emissions by 30% within 2025.
The company has developed its production process to be more environmentally friendly, installing rooftop solar panels at plants in Samut Prakan and Chachoengsao.
Energy Minister Supattanapong Punmeechaow said Egat wants other energy firms, including Ratch Group, Global Power Synergy, Gulf Energy Development and Electricity Generating, to join REC trade.
Over the long term, REC trade should be widely recognised by the public, similar to share sales in the stock market, Mr Supattanapong said.