The Excise Department is scheduled to impose a carbon tax by 2025.
However, the overall oil tax burden is expected to remain the same, so the public is unlikely to be affected, said department director-general Ekniti Nitithanprapas.
Mr Ekniti said the implementation of the carbon tax will be linked to the Global Warming Act, scheduled to be enacted in 2025.
He said the department studied global practices for implementing a carbon tax and will adopt international standards, taxing emissions at the source.
For example, in the past, vehicle taxes were based on engine displacement, but now they are based on carbon dioxide emissions, said Mr Ekniti. For a vehicle that emits more than 200 grammes of carbon per kilometre, the tax rate is 35%, while a vehicle that emits less than 150g per km the levy is 25%.
The carbon tax collection starts with oil, and the department can implement this tax without forming new legislation, he said.
The carbon tax will not increase the burden on the public as it will convert part of the oil tax into a carbon tax, said Mr Ekniti.
For instance, the current excise tax on diesel is 6.44 baht per litre. Diesel emits 0.0026 tonnes of carbon per litre, and the carbon tax rate will be charged at 200 baht per tonne of carbon, averaging 46 satang per litre.
This carbon tax will be included in the diesel excise tax structure of 6.44 baht per litre. Thailand's carbon tax rate is comparable to Singapore's, with Thailand the second Asean country to implement a carbon tax.
"In the future, when we refuel, we will know how much carbon is emitted. Initially, this will not affect the public," he said.
"The benefit is likely immediate as Europe will begin its Carbon Border Adjustment Mechanism [CBAM] on five types of goods in 2026. Export-oriented factories such as Thai steel mills that purchase diesel to melt their steel will have a carbon tax included in the diesel price. We are negotiating for the carbon tax to be deductible to help Thai businesses stay competitive."
In addition, the department supports measures promoting electric vehicles (EVs), leading to increased EV usage, said Mr Ekniti.
In 2024, EV sales grew by 685% from the year before, but the excise tax rate on EVs decreased from 8% to 2%, reducing the excise tax collected from the purchases.
This measure helped reduce carbon emissions by more than 240,000 tonnes, he said.
The government also encouraged manufacturers to set up EV production plants in Thailand under promotional measures, with 22 EV companies joining this initiative, bringing more than 80 billion baht in investment to Thailand.
In addition, the department is studying battery tax collection. Battery taxes are uniformly set at 8% for all types, such as car batteries, flashlights and power banks.
Mr Ekniti said the department wants to differentiate these rates. For recycling, the department will reduce the tax rate to incentivise environmentally friendly practices, he said.
Environmentally friendly practices are a global priority, especially in Europe, which will fully implement CBAM in 2026, affecting traders, said Mr Ekniti.
To mitigate these effects and enhance competitiveness, the Excise Department is preparing mandatory mechanisms for businesses through excise tax law, he said.