Thailand exempts land tax to boost blue carbon in mangrove forests

Thai government exempts mangrove land tax to encourage development. (Photo: Wikimedia Commons)

Mangroves are three to five times more effective at carbon sequestration than tropical forests, and the Thai government is optimistic about their substantial carbon credit potential.

Recently, Thailand amended tax laws to encourage mangrove restoration, with plans to exempt land taxes on green area, such as mangrove forests, starting in 2025. This initiative aims to accelerate the goal of restoring 80,000 hectares of mangrove forests by 2031.

Land taxes trigger shift from mangroves to farms

Under the 2019 Land and Building Tax Act, vacant or improperly used land is subject to a land tax rate ranging from 0.01% to 1.2%, which is higher than the tax rate for general agricultural land.

The government initially hoped this policy would improve land use efficiency and stimulate economic growth. However, many landowners, seeking to avoid higher taxes, chose to change land use classifications, converting large areas of mangrove forests into agricultural and aquaculture lands.

Pinsak Surasawadi, director of the Department of Marine and Coastal Resources (DMCR), stated that the contribution of mangrove forests to society far exceeds that of agriculture or aquaculture. As coastal and estuarine plants, mangroves play a crucial role in wetland ecosystems, prevent coastal erosion, and absorb carbon dioxide, making them a major source of blue carbon.

According to official statistics, Thailand has 176,000 hectares of mangrove forests, but much of this area has been converted into aquaculture farms. In response, the DMCR, together with the Ministry of Finance and the Ministry of Interior, has introduced relevant protection policies. In 2022, they invited private companies in the oil and natural gas sectors to invest in mangrove restoration by offering carbon credits as an incentive.

Thailand has 176,000 hectares of mangrove forests, but much of this area has been converted into aquaculture farms. In response, the Thai government has introduced several protection policies. (Photo: Wikimedia Commons)

Carbon credits drive mangrove restoration

The following year, the government introduced a Coastal Community Mangrove for Carbon Credit program, which enlists local communities to support mangrove restoration. Private companies provide financial incentives to these communities in exchange for the rights to carbon credits over a 30-year period. In the first year, communities can earn $78 per hectare, and in subsequent years, they will receive $35 per hectare.

The upcoming tax exemptions require green area to meet certain criteria, including having a minimum level of vegetation and benefiting the ecosystem and human quality of life. Additionally, these areas must be registered in the Thailand Voluntary Emission Reduction Program (T-VER) and must not be used for other profit-driven purposes, aside from carbon credit trading with the Thailand Greenhouse Gas Management Organization.

Source: Bangkok Post(1)、(2)、Mongabay