Thailand’s carbon market remains in its infancy, with the country’s Securities and Exchange Commission forecasting the launch of its voluntary carbon market (VCM) by 2027—preceding the introduction of a mandatory trading system.
The cap on carbon credits for emissions offsetting is set at 15%, aligning with Taiwan’s limit but significantly surpassing Singapore’s 5%. Thai authorities anticipate this measure will stimulate the development of the country’s carbon trading framework.
Speaking at the Carbon Forward Asia conference in Singapore, Suraphon Buphakposum, Vice President of Sustainability Services Development at the Stock Exchange of Thailand, revealed that discussions are ongoing regarding the structure of the voluntary market, which is expected to emphasise nature-based carbon credits, particularly those linked to forestry initiatives.
Thailand’s offset limit is relatively high in comparison to other Asian nations. While South Korea and Singapore cap offsets at 5%, Taiwan permits 15%. Vietnam has proposed a 20% limit, raising concerns about reduced incentives for companies to cut emissions.
The Thai government aims to fully establish its carbon trading system by 2030. The country has already rolled out the Thailand Voluntary Emission Reduction (T-VER) programme and plans to introduce a carbon tax of 200 baht (approximately $5.95) per tonne on petroleum products from March.
According to the Thailand Greenhouse Gas Management Organisation (TGO), transactions under the T-VER programme reached a record high between October and December last year, with 101,894 tonnes of carbon credits traded, amounting to THB 17.78 million (around $528,000). The majority of these credits were sourced from renewable energy projects.
In December, the price of carbon credits from forestry and agricultural projects in Thailand surged in line with global trends, reaching between THB 1,700 and THB 2,076 per tonne ($50.50–$61.70). This pushed the average price for the quarter to THB 174.45 ($5.10), reflecting a 40% year-on-year increase, though still below the proposed carbon tax rate.
Thailand has set a target to achieve net-zero emissions by 2065. A BloombergNEF report identified 2,166 facilities across the energy, construction, transport, and agricultural sectors earmarked for inclusion in the country’s cap-and-trade system. The timeline for launching the mandatory carbon market depends on legislative progress, with Buphakposum noting that should the Climate Change Act be approved by Parliament next year, the market could be operational by 2029.
