On 5 June 2024, the Director General of the Excise Department of Thailand disclosed the current stage of proposing methodology of carbon taxing to the Ministry of Finance for consideration which will be a mandatory mechanism for business sector and others to be aware of the environmental issues. Once the Ministry of Finance agrees with the proposal, it will be presented to the cabinet for further consideration.
Regarding the carbon tax, international standards will be used in the initial stage of implementation. Carbon tax scheme is expected to create the first carbon pricing mechanism in Thailand without any effect to the civilian. According to the proposal, the carbon tax will be 200 THB/tCO2eq in the initial stage which is comparable level to the carbon tax rate of 5 SGD/tCO2eq in Singapore, which is first country to introduce carbon tax in the ASEAN.
Ministry of Finance expects to implement the carbon taxing in 2025 to make it beneficial to the private sector which is targeted by Carbon Border Adjustment Mechanism (CBAM). CBAM will be fully enforced in 2026 and payment for the carbon emission at the country of operation will be taken into consideration when the products are exported to EU. Therefore, the carbon tax might be helpful for industrial sectors affected by CBAM such as steel and aluminium industry that use diesel in their process to be competitive in the global market.