Global environmental measures will seriously affect Thailand’s exports

Thailand is facing increasing pressure due to international environmental measures such as the European CBAM, which will affect the country’s exports worth over 300 billion baht ($9.3 billion) annually. This was reported by the Federation of Thai Industries (FTI).

Thailand emits approximately 350 million t of carbon dioxide equivalent annually (over 75% comes from the energy and industrial sectors). Although this accounts for less than 1% of global emissions, the FTI has called for turning climate challenges into opportunities to enhance the country’s competitiveness.

According to the Federation, although circumstances might delay some of the global climate measures, these actions will ultimately be fully implemented, so advance preparation is crucial.

Many countries have developed transition financing mechanisms that take into account their specific conditions. For example, Japan has core guidelines on climate transition finance for industries that still use traditional energy but have long-term plans for reducing carbon emissions. Singapore offers a scheme involving green grants and sustainability-linked loans to accelerate access to credit for businesses. In Thailand, the FTI noted that a key challenge is the lack of systematic data and technical support.

Last week, the Federation of Thai Industries and the Thai Bankers’ Association announced a strategic partnership to support the country’s transition to a low-carbon industry through the establishment of a transition finance mechanism. This step aims to provide local entrepreneurs, particularly SMEs, with access to funding sources for investments in environmentally friendly projects. It will also promote the use of clean technologies and enhance production efficiency to reduce greenhouse gas emissions.

It should be recalled that small and medium-sized enterprises in India operating in the metallurgical sector will find it difficult to meet the requirements of the European CBAM – monitoring, reporting, and verification – due to limited resources and technical capabilities.