Overview

Description

Thailand is developing a legislative framework for carbon pricing for several years. Building on the 2018 National Reform Plan and more than a decade of voluntary market infrastructure work by the Thailand Greenhouse Gas Management Organization (TGO), the Cabinet approved the Draft Climate Change Act and forwarded it to the Office of the Council of State for legal review prior to parliamentary consideration in December 2025, with enforcement anticipated in 2027. The approved Draft Act establishes an ETS, a carbon tax, a carbon border adjustment mechanism modelled on the EU's CBAM, and a regulated market for carbon credits. It also creates a Climate Fund financed in part through ETS and CBAM revenues. Primary supervisory authority is assigned to the Department of Climate Change and Environment (DCCE), which will be charged with developing up to 50 subsidiary regulations for the ETS, carbon credit markets, and the MRV system. The ETS will operate within industry-specific GHG ceilings set by the DCCE under the National Committee on Climate Change (NCCC). The sectors to be covered will be identified in subsidiary law following a data collection period planned for 2027 and 2028, with a pilot ETS potentially launching in 2029. Allocation plans will be updated every three to five years and will define covered activities, annual caps, offset credit limits, and the auctioned share of allowances for each sector. The DCCE will establish a registry and authorize an allowance trading center; in January 2025, the Securities and Exchange Commission announced plans for a carbon credit trading platform operated by the Stock Exchange of Thailand.

Recent Developments

In December 2025, the Thai Cabinet approved the Draft Climate Change Act, establishing an ETS, carbon tax, carbon border adjustment mechanism, and regulated carbon credit market. The bill was forwarded to the Office of the Council of State for legal review before submission to Parliament, with enforcement anticipated in 2027. In January 2025, the Securities and Exchange Commission announced a new carbon credit trading platform to be operated by the Stock Exchange of Thailand. In February 2025, the Stock Exchange signed a memorandum of understanding with the Intercontinental Exchange (ICE) to leverage financial technology and market expertise for the platform.

Coverage

Not Specified

Pricing and Allocation Approaches

Not Specified

Compliance Approaches

Not Specified

Relation to Other Compliance CPIs

Not Specified

Covered Sectors

No eligible activities specified for this instrument.