The Excise Department’s carbon tax should assist Thailand in meeting its goals of carbon neutrality by 2050 and net zero greenhouse gas emissions by 2063.
The Excise Department intends to levy a carbon tax on the energy, transportation, and industrial sectors in order to help Thailand achieve its targets of carbon neutrality by 2050 and net zero greenhouse gas emissions by 2063, as well as to reduce the cost of imported gasoline.
According to Nutthakorn Utensute, director of the Finance Ministry’s Excise Department’s Tax Planning Division, the carbon tax will encourage more industries to adopt cleaner or renewable energy, reducing carbon dioxide (CO2) emissions by up to 30%.
Nutthakorn did not elaborate on the tax, including when it will be introduced, stating only that a study is underway and will be concluded this year.
According to Nutthakorn, the energy sector accounts for 35% of CO2 emissions in Thailand because most power is generated by burning oil, natural gas, and coal. The transportation sector accounts for 32% of CO2 emissions, the industrial sector 27%, and households 6%.
Carbon taxes are also being investigated by the European Union, China, and the United States.
According to Nutthakorn, if Thailand does not reduce CO2 emissions, the cost of gasoline imports will rise.
Furthermore, when Europe applies its carbon border adjustment mechanism on seven commodities imported into the EU in October 2023, exporting countries will be required to reduce CO2 emissions.
Beginning on May 31, 2026, the system will force enterprises to disclose their CO2 gas emissions annually, even on imported items. Failing to comply will result in increased taxes.
Thailand is supporting electric vehicles, increased use of renewable energy, and a carbon price to help it reach its environmental goals.
According to Rosalind Amornpitakpun, director of the Climate Change Management and Coordination Division, the country’s carbon tax and carbon-credit trading measures, as well as action plans for reducing CO2 gas emissions in the energy, transport, and industrial sectors, should be included in the Climate Change Act.
This would help Thailand prepare for a future climate-change event, she said, referring to the 28th Conference of the Parties to the UN Framework Convention on Climate Change, which will take place in November in Dubai.
The Climate Change Management and Coordination Division is part of the Office of Natural Resources and Environment Policy and Planning. The office is speeding up a research on carbon capture and storage technology, and carbon credits involving electric buses are being traded with Switzerland.
The newly constituted Department of Climate Change and Environment is expected to play an important role in Thailand’s efforts to reduce CO2 emissions.
