Ahead of COP 26, Thailand is making good progress in the process of enacting its first law directly targeting climate change and its commitment to meet the Paris Agreement goals. On October 20, 2020, the country submitted its NDC to the UNFCCC secretariat and on March 1st, 2021, Thai Deputy Prime Minister Prawit Wongsuwan has approved the Climate Change Bill. The bill should be submitted to the Parliament shortly. The Green Fund has also allocated USD 300 million to green infrastructure projects in South East Asia which will benefit Thailand.
Nationally Determined Contribution (“NDC”)
Thailand intends to reduce its GHG emissions, unconditionally, by 20% from the projected business-as-usual level by 2030 and conditionally by 25% subject to enhanced access to green technology development, financial resources and capacity building.
The conditional emission cut target creates opportunities to foreign green tech companies for entering into international tech transfers with Thailand, especially if the Clean Development Mechanism is renewed after the COP 26.
Climate Change Bill (“Bill”)
The likely impacts of the Bill on the private sector include an obligation on certain operators to report their GHG emissions to the national greenhouse gas inventory. As to the penalties, the current Bill provides for administrative fines for failure to report emissions. Thai operators should start aligning their development strategy to the upcoming mandatory reporting.
Further amendments are likely to be made to the Bill during the legislative process which we will continue to analyze and share.
Green finance
In March 2021, the Green Climate Fund has allocated $300 million to support the Asian Development Bank's efforts to help Southeast Asia shape a climate-resilient, environmentally sustainable economic recovery from the COVID-19 pandemic. This fund will be allocated to The Association of Southeast Asian Nations Catalytic Green Finance Facility (ACGF), launched in April 2019, to support and scale up green infrastructure projects across South-East Asia. All projects supported by ACGF shall incorporate innovative green finance instruments and approaches. The sectors type are infrastructure in energy, water, transport, urban and multi sector projects and projects must demonstrate contribution to mitigation, adaptation or other environmental sustainable objectives. This creates new opportunities to finance green tech projects in the region.
