The Copenhagen Accord called on Annex I countries to make their climate change pledges, and on Annex II countries to identify their nationally appropriate mitigation actions by 31 January 2010.
In this edition of the Asia Pacific climate change policy series we examine the regulatory framework and climate change investment opportunities in Thailand.
Key points on Thailand:
- ratified the Kyoto Protocol on 28 August 2002 and has recently developed a number of plans and programs to combat climate change
- is currently implementing the National Alternative Energy Development Plan (2008 - 2022) which aims to increase the share of alternative energy to 20 per cent of total energy consumption by 2022
- has announced plans to develop a national carbon fund by the end of 2010 (the Carbon Fund)
- is an active participant in the global secondary carbon market with 40 registered CDM projects expected to net around 2.2 million CERs annually between them
- has announced new tax regulation to waive corporate income tax on profit derived from off-shore sale of Certified Emission Reductions (CERs) and Voluntary Emission Reductions (VERs) for 3 consecutive financial years
- biomass, solar and hydropower present investment opportunity, and the soon to be established Carbon Fund will attract investment from both the public and private sectors.
Copenhagen Accord commitments
Thailand was represented at the Copenhagen Convention and has confirmed that it has a positive view of the Copenhagen Accord however it has not yet made any commitments or set any voluntary targets under the Copenhagen Accord. Thailand's association with the Copenhagen Accord has to be considered and approved by Thailand's Parliament. Consideration will not be given to the Copenhagen Accord until an official analysis is undertaken on the advantages and disadvantages of the Copenhagen Accord for Thailand.
While Thailand has not made commitments or voluntary targets under the Copenhagen Accord it has shown in recent years that it is committed to tackling issues on climate change.
Thailand ratified the Kyoto Protocol on 28 August 2002 and has recently developed a number of plans and programs to combat climate change including the National Organic Agricultural Program which seeks to reduce chemical usage in agriculture, and the National Economic and Social Development Plans for 2007 - 2011 and 2012 - 2016 which promote a low carbon economy, green transportation and logistics, sustainable and organic agriculture and public education initiatives promoting the use of more environmentally friendly products. A key element of the 2007-2011 plan is to, in that period, reduce the rate of carbon dioxide emissions per person by five per cent and also to conserve natural resources and biodiversity by maintaining forest at no less than 33 per cent of total land area.
Thailand has developed and is in the process of implementing a 15 year National Alternative Energy Development Plan (2008 - 2022) which aims to increase the share of alternative energy to 20 per cent of total energy consumption by 2022 (from a baseline of less than one per cent in 2007). The measures presented under the plan include the introduction of a new feed-in tariff scheme for the purchase of power from renewable projects and incentives (such as direct financial support) for investments in renewable projects or technology. It is expected that much of the target will be met through expansion of the small scale hydro and biofuels markets.
For more information on renewable energy in Thailand, please refer to our Asia Pacific renewable energy manual.
In 1985 Thailand set a target to increase its national forest cover to 40 per cent in 2020. Reaching this target has since become a significant part of Thailand's efforts to reduce its greenhouse emissions, through the sequestration of carbon in forests. By 2006 national forest cover had reached 30 per cent.
The Thailand Greenhouse Gas Management Organisation (Public Organisation) has announced plans to develop a national carbon fund by the end of 2010 (the Carbon Fund). The Carbon Fund's main objective will be the provision of financial support and technical assistance to local CDM projects that have difficulty obtaining funding from private investors and commercial banks. The Carbon Fund will also purchase Certified Emission Reductions (CERs) from small and medium sized CDM projects which will then become available to investors to be used for compliance purposes or sold in the secondary market.
Thailand is also committed to its Energy Conservation Plan 2008 - 2011 which aims to cut energy consumption by 10.8 per cent of the country's total energy demand in 2011.
Thailand is also an active participant in the global secondary carbon market. There are 40 registered CDM projects in Thailand that are expected to net around 2.2 million CERs annually between them. Key areas of CDM project investment in Thailand to date include:
- biomass and biofuels energy production
- waste energy production
- land-fill gas recovery
- power generation.
Investment flows have to date principally come from Japan, the United Kingdom, Denmark and Germany.
Thailand has abundant resources for the potential generation of renewable energy from biomass, solar and hydropower. As the power industry in Thailand has invariably been dependent on fossil fuels, the harnessing and exploitation of these new renewable energy sources through the various recently established plans and programs will open the door for a number of investment opportunities in Thailand.
The Carbon Fund, once established, is also expected to attract investment from both the public and private sectors. Target investors are likely to be international investors with the binding commitment to reduce their emissions and Thai corporations interested in the purchase of CERs to reinforce their corporate social responsibility. Several investors in Japan and Europe have already expressed an interest in the Carbon Fund.
Norton Rose Group has one of the leading and best resourced legal practices across Asia Pacific and have acted and advised on a number of carbon investment projects in the region. We have provided advice in relation to a number of climate change related issues in Thailand including, in particular, advising the Thailand Greenhouse Gas Management Organisation (Public Organisation) on the structure of the Carbon Fund and related legal and regulatory framework. Additional recent experience includes:
- advised Thai and foreign developers, including Climate Change Capital, Sindicatum and Barcap, on over 10 CDM and related projects including the structured investment in three CDM biogas gas power generation projects, using biogas generated from landfills and wastewater treatment, and one CDM biomass power generation project in Thailand
- advising on the purchase of CERs from biomass and ethanol projects in Thailand.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.