The Thailand Cabinet has approved the principles of drafting the country's first comprehensive Climate Change Act, a landmark piece of legislation designed to establish a legal framework for managing greenhouse gas (GHG) emissions and driving Thailand towards its climate goals of carbon neutrality (Net Zero) and net-zero emissions. The approval, which announced on December 2, 2025, paves the way for the introduction of key carbon pricing mechanisms, including a carbon tax and a national Emissions Trading System (ETS).
The draft legislation introduces several core components aimed at integrating climate action across the Thai economy. Key policies include:
National Governance Structure: The Act establishes four national-level committees to oversee climate policy. A central body, the "National Climate Change Policy Committee," will be responsible for setting national policies, targets, and Thailand's international climate positions.
Carbon Pricing Mechanisms: Thailand will implement mandatory carbon pricing. The law lays the foundation for an Emissions Trading System (ETS), allowing companies to trade GHG emission allowances. It also introduces a Carbon Tax to be levied on products and activities with significant emissions, reinforcing the "polluter pays principle."
Mandatory GHG Reporting: Both public and private sector entities will be required to collect and report data on their GHG emissions. This information will be compiled into a national greenhouse gas registry to ensure transparency and support policy-making. Enterprises not reporting greenhouse gas emissions or reporting false information will be subject to penalties.
Establishment of a Climate Fund: A state legal entity, the "Climate Fund," will be created. It will collect revenue from carbon taxes, ETS allowance auctions, and other carbon-related fees to finance clean energy investments, climate adaptation projects, and GHG reduction programs.
International Trade Alignment: The Act includes provisions for a Cross-Border Carbon Adjustment Mechanism (CBAM). This will allow Thailand to apply carbon charges to imported goods based on their embedded emissions, aligning with emerging international trade standards.
The Climate Change Act represents a significant shift for businesses in Thailand, transforming environmental responsibility into a direct financial liability. High-emission industries such as energy, manufacturing, and transport will face new operational costs and stringent compliance requirements.
According to the government, the Act is designed to create incentives for all sectors to invest in clean technology and sustainable practices. The recognition of domestic carbon credits as legal "assets" that can be bought, sold, and used for offsetting emissions is expected to stimulate the growth of a domestic carbon market.
