Thailand’s Cabinet has endorsed the principles for drafting the country’s first comprehensive Climate Change Act, marking a major step toward establishing a national legal framework to control greenhouse gas (GHG) emissions and support Thailand’s carbon neutrality and net-zero ambitions. The approval, announced on December 2, 2025, sets the foundation for wide-ranging climate governance and market-based mechanisms.
The proposed Act introduces key policy instruments, including carbon pricing through a carbon tax and a national Emissions Trading System (ETS), mandatory GHG reporting with enforcement measures, and the creation of a Climate Fund to finance clean energy initiatives, climate adaptation projects, and emission-reduction programs.
Under the draft legislation, a national governance framework will be established through four high-level committees. The central authority, the National Climate Change Policy Committee, will be responsible for defining national climate strategies, setting targets, and representing Thailand in international climate engagements.
Carbon pricing will become compulsory, with the ETS enabling regulated entities to trade emission allowances, while a carbon tax will be imposed on emission-intensive products and activities, reinforcing the “polluter pays” principle.
The Act also mandates GHG data collection and reporting by both public and private sector entities. Emissions data will be consolidated into a national GHG registry to enhance transparency and inform policymaking, with penalties imposed for non-compliance or false reporting.
To support climate action financially, the Act establishes a Climate Fund as a state legal entity. The fund will receive revenue from carbon taxes, ETS allowance auctions, and other carbon-related fees, and will channel these resources into low-carbon technologies, adaptation measures, and GHG mitigation efforts.
In addition, the legislation includes provisions for a Cross-Border Carbon Adjustment Mechanism (CBAM), allowing Thailand to levy carbon charges on imported goods based on their embedded emissions, aligning domestic policy with evolving global trade practices.
The Climate Change Act is expected to significantly impact Thai businesses by linking environmental performance directly to financial obligations. High-emission sectors such as energy, manufacturing, and transport will face increased compliance requirements and operating costs.
According to the government, the Act is designed to encourage investment in clean technologies across all sectors. The legal recognition of domestic carbon credits as tradable assets for emissions offsetting is also expected to accelerate the development of Thailand’s domestic carbon market.
