Thailand's green tech startups are emerging, in line with the country's ambitious greenhouse gas reduction targets and the global momentum towards environmental, social and governance standards.
However, some obstacles need to be addressed for these startups to thrive.
In 2024, Thailand attracted US$355 million in private green investments, ranging from solar, wind and green cement to sustainable fuels and biomass, according to a research paper prepared by Bain & Co.
Southeast Asia could unlock $38 billion in economic gains from the green transition by 2030, according to the study.
Policy Momentum
"Thailand has set clear but challenging greenhouse gas emission reduction goals. Achieving them requires not only strong policy support, but also a robust innovation drive," said Kittisak Prukkanone, director of the division of strategy and international cooperation at the Department of Climate Change and Environment.
The country aims to be carbon neutral by 2050 and net-zero by 2065.
Although the Thai government introduced several incentives and policies to support climate tech development, the sector continues to face significant challenges, including regulatory hurdles, a shortage of skilled talent, and limited access to funding, which have hampered the growth of this sector.
A flexible yet stable policy framework to support innovations is essential, he said. As a result, there is a need to improve policy tools and enhance support mechanisms for startups, said Mr Kittisak.
He said a draft law on climate change next year should become a critical tool in the long term, driving demand and increasing funding for climate tech development, helping Thailand achieve its related long-term goals.
In addition, the Digital Economy Promotion Agency and National Innovation Agency already support green tech startups.
"Startups and investors play a crucial role in supporting Thailand's transition to a green economy," said Mr Kittisak.
RICH OPPORTUNITY
Thailand is still in the early stages of green tech development and Thai investors are unfamiliar with the risk profile of climate tech startups, said Woraphot Kingkawkantong, head of investment at Beacon Venture Capital, the investment arm of Kasikornbank.
However, Beacon sees positive trends, such as the establishment of various impact funds and growing interest from corporate venture capital, which is starting to look for innovations to help reduce its own carbon footprint.
Despite challenges, the landscape for climate tech startups in Thailand is rich with opportunity, said Mr Woraphot.
Stakeholders are increasingly realising the importance of climate tech, which inspires collaborative efforts to pave the way for innovations that will help alleviate climate change, he said.
Innovations in artificial intelligence, agritech, carbon accounting, and hybrid hardware-software solutions are driving the country's transformation.
Successful climate tech startups require capital, proven impact and scalability, said Mr Woraphot.
LACK OF FUNDING
Santikorn Pakdeesettakul, senior green investment officer at the Global Green Growth Institute, said Thailand's net-zero goal and bio-, circular and green economy strategy have paved the way for investment in clean energy, sustainable agriculture, waste management and electric vehicles.
"By overcoming challenges and strengthening the ecosystem, Thailand has the potential to become a climate innovation hub in Southeast Asia," said Mr Santikorn.
He said Thailand's climate tech sector is rapidly evolving, driven by government initiatives in sustainability, which increases corporate demand for eco-friendly solutions.
If all key stakeholders in Thailand can align and synchronise the regulatory, technical and market environment, the business opportunity for climate tech startups will extend beyond the Thai market, said Mr Santikorn.
"However, Thailand's climate tech startup ecosystem faces critical structural and funding challenges that threaten its ability to scale," he said.
Mr Santikorn said a lack of wider understanding about climate change limits the perception of the industry to the arenas of renewable energy, battery storage, decarbonisation, and e-mobility, overlooking potential areas such as agritech, green fintech, and circular economy solutions.
He said another major obstacle is ecosystem fragmentation, as some government agencies tasked with supporting startups operate independently, while others have overlapping authority or work in a bureaucratic manner.
Stakeholders have raised concerns about inefficient grant mechanisms, which require startups to invest their own capital upfront before receiving reimbursement, a system that exacerbates their cash-flow constraints, said Mr Santikorn.
Inadequate funding is another pressing issue, as some industry players argue a state grant of less than 1 million baht for early startups is insufficient for them to achieve scalability, which typically requires at least two years of development.
Many are now calling for state funding to increase to 5 million baht to better support climate tech entrepreneurs in their efforts to drive innovation, he said.
"As Thailand looks to position itself as a regional leader in sustainable technology, addressing these structural and financial barriers will be essential to fostering a thriving climate tech ecosystem," said Mr Santikorn.
In addition, corporate investment remains highly risk-averse, favouring proven scalability over early-stage funding, he said.
This defensive strategy limits innovation, preventing startups from securing the resources needed to grow.
The ecosystem also lacks essential incubation programmes and customer connections, making it difficult to transform ideas into viable businesses, said Mr Santikorn.
Cleantech startups in Thailand face high costs, long payback periods, and slow scalability, limiting private investor interest and forcing reliance on government support, he said.
However, agritech is attracting both local and international funding, and Space-F is playing a key role in providing funding opportunities, said Mr Santikorn.
Space-F is Thai Union's global food-tech startup incubator and accelerator programme in Thailand.
PTT's ExpresSo accelerator remains one of the few corporate-backed cleantech initiatives, focusing on electric vehicles and strategic partnerships.
He said despite universities driving climate tech research, weak industry collaboration and limited commercialisation pathways continue to hinder the sector's growth.
Efficiency multiplier
Sita Chantramonklasri, founder and general partner of Siam Capital, sees sustainability as not only a global imperative, but also one of the most promising economic opportunities of our time.
Siam Capital is an investment firm that supports innovative business projects and promotes their development.
Ms Sita said the company's investment is guided by the "efficiency multiplier" principle -- the idea that true sustainability means producing more, or the same, with fewer resources.
She listed energy consumption, amid an urgent need for innovation in decentralised energy systems, smart energy controls and grid storage as the most compelling areas for sustainable investment.
Ms Sita said she also predicts a resurgence of interest in nuclear energy, particularly in small-scale and offshore applications.
In materials science, there is growing investment in advanced materials such as next-generation plastics and mycelium, which offer high output relative to input, especially in food and agriculture.
When evaluating startups, she said she distinguishes between two types of risk: technology risk and execution risk.
Technology risk must be manageable within a five-year horizon, while execution risk depends on a company's ability to move from lab-based innovation to market-ready solutions with scalable unit economics.
Ms Sita said one of the biggest challenges in sustainability is not technological or financial, but language. Many founders enter the startup world driven by passion and a desire to solve meaningful problems.
However, without the ability to clearly articulate how their solution helps a customer, producer, corporation, or government save or make money, their business may struggle to gain traction, she said.