Legislation may be needed to enforce carbon reduction if Thailand fails to meet its emission targets, says Finance Minister Pichai Chunhavajira.
In his keynote speech at a seminar on net-zero targets, Mr Pichai said Thailand has committed under international agreements to achieving net-zero carbon emissions within 41 years. While this may seem like a long run-up, it is uncertain whether the country will be able to meet this target based on current estimates, he said.
The country must start by reducing carbon emissions before progressing towards net-zero, said Mr Pichai. This requires measuring how much carbon has been emitted and how much can be reduced. If emissions cannot be reduced voluntarily, legislation may be needed to enforce reductions, he said.
"Thailand's carbon emission levels remain close to when we signed the international agreement to reduce emissions," said Mr Pichai.
The EU has already begun enforcing laws to reduce carbon emissions for imported goods through the Carbon Border Adjustment Mechanism (CBAM). Countries that fail to meet the requirements will not be able to export their products to the EU, or shippers will pay higher tariffs.
He said Thailand wants to transition to a digital economy. To achieve this goal, it is essential to accelerate the development of green energy to align with current global standards, said Mr Pichai.
"China is facing trade restrictions and dealing with overcapacity. With greater trade restrictions, China's production bases have been relocated to other countries, including Thailand, leading the value of new investment project proposals through the Board of Investment [BoI] to top more than 700 billion baht in the first nine months this year," he said.
According to the BoI's latest data, the value of new investment proposals soared by 42% year-on-year during the first nine months of 2024 to a combined 723 billion baht, the highest level since 2015.
Mr Pichai said previous investments in Thailand involved importing components for assembly within the country.
New investments extend to upstream industries such as the semiconductor and integrated circuit design sectors, he said.
Furthermore, investment in data centres has grown, partially in response to government incentives, aiming to position the nation as a hub in this sector.
Mr Pichai said what investors seek from Thailand is affordable, well-developed land; access to green energy, along with government regulations that allow shared transmission lines or the option to sell surplus energy back to the electricity grid; and a skilled workforce.
He said reducing carbon emissions could be both a challenge and an opportunity for Thailand as one mechanism for carbon reduction that meets international standards is the sale of carbon credits.
European countries are trading carbon credits worth up to US$1 trillion, with prices ranging from $70 to $100 per tonne. Singapore is purchasing carbon credits at $32 per tonne.
Digital investment tokens were introduced in the Thai capital market and there are plans to issue utility tokens in the future, said Mr Pichai.
At the COP27 meeting in 2022, Thailand signed an international agreement to reduce carbon emissions, setting a target to cut emissions by 20–25% by 2030 compared with the emissions level the year the pact was signed.
Thailand currently emits an estimated 555 million tonnes of carbon annually.
The country also set a goal of achieving carbon neutrality by 2050, with the ultimate aim of reaching net-zero greenhouse gas emissions by 2065.