TNSC: Carbon Credit Market Surges, Boosting Agricultural and Export Opportunities
June, 12 2023
Carbon credits refer to the rights generated from reducing carbon dioxide or greenhouse gas emissions into the environment. These rights are granted to individuals or organizations that implement projects or measures aimed at reducing greenhouse gas emissions. The amount of reduction can be measured and traded in the carbon credit market.
In 2020, the global voluntary carbon market was valued at $1.98 billion. By 2030, it is expected to grow to $25 billion (approximately 750 billion baht), while the demand for carbon credits may rise to $30-50 billion. This indicates that carbon credit trading is gaining popularity in many countries.
In Thailand, the carbon credit market is emerging as a lucrative business and a key mechanism for achieving the Net Zero goal—net-zero greenhouse gas emissions. This system encourages businesses to participate in emission reductions, and those unable to lower their emissions can offset them by purchasing carbon credits. This provides flexibility in cost management, enhances environmental responsibility, and increases competitiveness in global markets.
Thailand’s Approach to Carbon Credit Trading
Phunpong Nainanpakorn, Director of the Trade Policy and Strategy Office (TPSO) at the Ministry of Commerce, stated that TPSO has been monitoring the carbon credit market, which aims to mitigate environmental impacts from greenhouse gas emissions. Many countries have implemented carbon control strategies, such as carbon taxes on domestic activities and imports with high carbon footprints. This has led to an active carbon credit exchange market, allowing high-emission businesses to purchase carbon credits to offset their emissions, simulating emission reductions.
With the increasing demand for carbon credits, the agricultural sector in Thailand has an opportunity to generate additional revenue. The cultivation of 58 plant species, such as neem, cherry blossom, golden shower, queen’s flower, teak, rosewood, and other hardwood trees, can be converted into carbon credits. Additionally, economic plants under the BCG (Bio-Circular-Green) model, such as bamboo, durian, mango, and tamarind, play a crucial role. These are not only major export crops but also have high added value due to their Geographical Indication (GI) status. Furthermore, medicinal plants like mahad and emblic can be cultivated for both commercial and carbon credit purposes under Thailand’s voluntary greenhouse gas reduction program (T-VERs2) in the agriculture sector (fruit orchards).
Opportunities for Thailand’s Export Market
Thailand stands to benefit from expanding exports, particularly for low-carbon products, which will have a price advantage over high-carbon goods. Environmental regulations are becoming a global trade norm, affecting access to major markets such as the U.S. and the European Union.
To adapt, Thailand must integrate efforts across all sectors, preparing businesses for the transition. Key initiatives include:
- Advancing the BCG economic model and creating a new economic S-Curve
- Supporting agriculture in reducing greenhouse gas emissions
- Promoting carbon capture, utilization, and storage (CCUS) technologies
- Enhancing the value of carbon credits and providing tax incentives
- Developing both domestic and international carbon credit markets
- Educating the agricultural sector on participating in T-VERs programs
By implementing these strategies, Thailand can strengthen its position in the global carbon market while contributing to environmental sustainability.