In brief
Thailand is accelerating its transition to a low-carbon economy, rolling out a series of policies, regulatory reforms, and investment incentives designed to align economic growth with environmental sustainability.
The multi-tiered reforms reflect a broader recognition among policymakers that long-term competitiveness will depend on how effectively the country can cut greenhouse gas emissions, strengthen climate resilience, and respond to rising global expectations on sustainability.
Indicative of efforts in this direction, on 15 May 2026, the Thai Parliament approved the resumption of its review of 34 bills previously proposed by the Cabinet, including the draft Clean Air Management Act, a long-anticipated environmental draft law aimed at establishing a more systematic and sustainable approach to managing air pollution. The bills that survived the dissolution of the previous parliamentary session will be referred to the Parliament's responsible committee for further consideration.
These legislative proposals and reforms are reshaping Thailand’s environmental and investment framework with significant implications for business operators.
In more detail
Raising climate ambition
At the center of Thailand’s climate strategy is its updated Nationally Determined Contribution (NDC 3.0) under the Paris Agreement. The plan commits the country to a 47% reduction in greenhouse gas emissions by 2035 (from 2019 levels) and a net-zero target by 2050 — bringing forward its previous timeline by 15 years.
The updated framework expands coverage across all major sectors, including energy, transport, industry, agriculture, and land use. It also links climate action more explicitly with economic goals, emphasizing green job creation, investment flows, and a "just transition" for affected industries.
Industry and investment: Decarbonization as a business imperative
Thailand is increasingly positioning low-carbon industry as both an environmental necessity and a growth opportunity. New Board of Investment (BOI) incentive packages for 2026–2027 offer tax breaks and privileges for sectors such as electric vehicles, renewable energy, and circular manufacturing.
At the same time, regulatory developments are reshaping the operating landscape. The Draft Climate Change Act, still under development, is expected to introduce carbon pricing mechanisms, including an emissions trading system (ETS), carbon tax, and carbon border adjustment mechanism or Thailand CBAM.
Together, these shifts send a clear signal: decarbonization is moving from voluntary action to a core business requirement, especially for exporters facing carbon-related trade measures in global markets.
Accelerating the energy transition
Thailand’s energy policies are also evolving rapidly. Under revisions to the Power Development Plan (PDP) and the Alternative Energy Development Plan (AEDP 2024), the government aims for renewables to account for around half of power generation by the mid-2030s.
To support this goal, authorities are expanding feed-in tariffs, community solar programs, and battery storage incentives, while encouraging private investment through green finance tools and BOI support.
The transition is framed not only as climate policy, but as a way to enhance energy security and price stability in an increasingly volatile global market.
One of the key mechanisms to cut emission and reduced reliance on fossil fuels can be seen in the support for transition to electric vehicles. Thailand is doubling down on electrification through the EV 3.5 package (2024–2027) and the "30@30" policy, targeting 30% of total vehicle production to be zero-emission by 2030.
Subsidies, tax reductions, and manufacturing incentives are being combined with investments in public transport infrastructure, including rail expansion, electric buses, and integrated ticketing systems — to reduce reliance on private vehicles, particularly in urban centers like Bangkok.
Circular economy gains ground
Waste and resource management is another area to watch. Under the Bio-Circular-Green (BCG) Economy Model and national waste plans, Thailand is introducing Extended Producer Responsibility (EPR) schemes to impose accountability for waste to producers.
Pilot programs currently focus on plastics, but policymakers are expected to expand EPR frameworks to more complex waste streams — including electronic waste — in the coming years.
The goal is to reduce landfill dependency while encouraging recycling and resource efficiency across the supply chain.
Tackling pollution more aggressively
Public pressure over air quality — particularly recurring PM2.5 pollution — has pushed environmental enforcement higher up the agenda.
The proposed Clean Air Management Act introduces a comprehensive legal framework covering industrial emissions, transport, open burning, and cross-border haze, based on the polluter-pays principle.
In parallel, Thailand has introduced tighter measures, such as restrictions on diesel emissions, seasonal burning bans, and, notably, a new rule requiring all imported maize from 1 January 2026 to be produced under "no-burn" practices to curb transboundary pollution.
Financing the green transition
A key enabler of Thailand’s transformation is sustainable finance. The Thailand Taxonomy, introduced in phases since 2023, provides a classification system for economic activities — categorizing them as green, transitioning, or non-aligned.
The latest expansion in 2025 broadened coverage to six major sectors, including energy, transport, agriculture, construction and real estate, manufacturing, and waste management.
For businesses, taxonomy is increasingly important as a gateway to green financing, ESG investment, and risk management, while helping avoid accusations of greenwashing.
Building a green society
Beyond industry and infrastructure, Thailand is also pushing for broader societal participation in sustainability.
Policies under the 20-Year National Strategy, the 13th National Economic and Social Development Plan, and a new Sustainable Consumption and Production (SCP) Roadmap (2024–2037) emphasize local engagement, behavioral change, and support for small businesses.
Initiatives such as local sustainability indicators and community-level programs aim to translate national policy into tangible action across provinces.
Transitioning toward a comprehensive policy landscape
Thailand’s green policy drive reflects a comprehensive shift in direction — combining incentives, regulation, and financial tools to reshape the economy.
While green sectors are benefiting from investment support and policy backing, carbon-intensive industries are facing increasing pressure through emerging carbon pricing, stricter standards, and disclosure requirements.
Challenges remain, particularly in implementation and enforcement. But the overall trajectory is clear: Thailand is steadily building the institutional and financial foundations for a low-carbon, competitive, and more inclusive economy.
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Dhiranantha Rithmanee and Dr. Muanjit Chamsilpa, Sustainability Specialists, have contributed to this legal update.