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The Thai government will propose a carbon tax measure on Dec. 11 for Cabinet approval. (Photo: iStock)
Updated: The Thai government will propose a carbon tax next week.
The Thai Ministry of Finance is set to propose a carbon tax measure on Dec. 11 for Cabinet approval, aiming to enhance the country’s efforts in reducing greenhouse gas emissions. Kulaya Tantitemit, Director-General of the Excise Department, announced the plan during the 2025 Sustainability Development Forum. Under the proposal, a carbon tax of THB 200 per ton of carbon emissions will be introduced.
Citing data from the World Economic Forum, Kulaya highlighted that countries implementing carbon taxes have achieved an average annual reduction of 2% in carbon emissions. In contrast, nations without carbon pricing mechanisms have experienced an annual increase of 3% in emissions.
Kulaya assured stakeholders that the implementation of the carbon tax would not impose additional financial burdens on petroleum operators or consumers. She explained that the overall tax burden would remain unchanged as the Finance Ministry plans to adjust the existing petroleum and petroleum products tax structure. The carbon tax will be integrated into these taxes, with reductions proposed for biofuel-inclusive products.
Thailand currently emits 372 million tons of carbon annually, with 70% of emissions stemming from the energy and transportation sectors. Energy-related emissions alone account for 37% of the total. The Thai government has set ambitious targets to tackle this: reducing carbon emissions by 30-40% by 2030, achieving carbon neutrality by 2050, and reaching net-zero emissions by 2065. The following is the report from Sep. 30:
Thailand's carbon tax is expected to be implemented this year. Officials from the Ministry of Finance have revealed plans to link the carbon tax with the excise tax to prevent companies from passing on costs to consumers. Additionally, the country will adjust the unified tax rate for batteries based on carbon emissions, encouraging the production of low-carbon batteries.
Thailand vows to implement the carbon tax by the end of the year
Deputy Minister of Finance Paopoom Rojanasakul recently announced at the forum "Road to Net Zero 2024: The Extraordinary Green" that the country is set to propose carbon tax measures, aiming for cabinet approval and implementation within the year.
He pointed out that the carbon tax will be combined with the excise tax. For example, the current fuel excise tax is 6 Thai baht per liter (about 0.19 USD). After the new system is implemented, this tax rate will remain unchanged, but 1 Thai baht will be collected under the carbon tax.
The Thai government has repeatedly emphasized that the carbon tax will not impact consumers. Therefore, in the new tax structure, the general public will not face additional tax burdens, while oil companies will need to pay the carbon tax based on their emissions reductions, which will influence their carbon-related costs. Each ton of emissions will be calculated according to the carbon tax rate and borne by the companies themselves, with the hope of encouraging the use of clean energy.
Paopoom also mentioned that the current unified battery excise tax rate of 8% will be adjusted. In the future, the rate will be determined based on the carbon emissions of the batteries, with higher emissions resulting in higher tax rates, promoting the production of more low-carbon batteries. Furthermore, companies that significantly reduce their emissions may even be eligible for tax refunds.
Thai government encourages the use of renewable energy
A source from the Ministry of Energy indicated that the government is considering expanding the procurement of surplus electricity from households to increase the adoption of rooftop solar systems.
Last year, households selling surplus electricity from rooftop solar exceeded government projections. With recent strong support from businesses and Congress for solar energy, as well as the revised National Power Development Plan (PDP) significantly increasing the share of renewable energy, the supply is expected to continue growing. However, due to current cap regulations, connecting to the grid remains a challenge.
According to initial plans, the Thai government aims to purchase 90 MW of solar power from households between 2021 and 2030. An unnamed official stated that if more households are allowed to sell rooftop solar power to the national grid, it could boost the installation rate of rooftop solar systems among the general public.
Source: Bangkok Post(1), (2),(3), The Nation
