Japan Launches Initiative to Support Thailand's Carbon Neutrality Goals

 

Japan has unveiled a new collaborative framework to assist Thailand in achieving its ambitious climate targets, bringing together multiple Japanese agencies to provide expertise and financial support for energy efficiency measures.

 

The Japan-led AZEC-SAVE (Asia Zero Emission Community - Smart and Advanced Value-chain for Environment) initiative aims to accelerate Thailand's transition towards carbon neutrality by 2050 and net zero emissions by 2065.

 

The programme was announced by the Japan Bank for International Cooperation (JBIC), in partnership with the Japanese Embassy in Thailand, the Association for Overseas Technical Cooperation and Sustainable Partnerships (AOTS), the Japan External Trade Organization (JETRO), and the New Energy and Industrial Technology Development Organization (NEDO).

 

This initiative bolsters the broader Asia Zero Emission Community (AZEC) platform established in 2023 by Japanese Prime Minister Fumio Kishida, which unites 11 nations including Australia, Brunei, Cambodia, Indonesia, Japan, Lao PDR, Malaysia, the Philippines, Thailand, and Vietnam.

 

Otaka Masato, Japan's Ambassador to Thailand, highlighted the shared ambition of both nations to achieve carbon neutrality by 2050, noting the increasing electricity demands faced by both countries, particularly from energy-intensive data centres.

 

He emphasised Japan's experience and technology, developed during the oil crisis, as crucial in aiding Thailand's emission reduction efforts.

 

 

 

Thailand's Three-Phase Approach

Thailand's net-zero roadmap involves a comprehensive assessment of the country's energy landscape across three sectors:

In power generation (upstream), Thailand currently produces 60% of its electricity from gas, 20% from coal and 20% from renewables. The Power Development Plan 2024 aims to increase renewable energy to over 50% of the energy mix.

For power transmission and distribution (midstream), Thailand plans to enhance its transmission capabilities and transition to a smart grid, with state-owned enterprises leading these developments.

In electricity consumption (downstream), manufacturing accounts for 40% of Thailand's electricity use. Export-oriented factories are being encouraged to improve energy efficiency to address both direct and indirect emissions.

 

Beyond industry, commercial centres and hotels also present significant opportunities for energy savings through Japanese expertise and technologies.

 

 

Creating an Energy Efficiency Ecosystem

The Japanese delegation confirmed that AZEC-SAVE will provide personnel and financial cooperation to help Thailand reduce energy consumption.

 

Target beneficiaries include Japanese subsidiaries in Thailand, Thai companies and state enterprises, international firms, and industrial estates.

 

Japan offers a range of energy-saving products and services, supported by both public and private financial institutions, leasing companies, and governmental bodies. JBIC will play a key role in developing a comprehensive platform and ecosystem.
 

 

The initiative will mobilise activities, expertise, and funding to achieve energy efficiency targets, leveraging the collective strength of various Japanese government agencies to facilitate smoother engagement with the Thai government. Energy conservation has been integrated into the bilateral energy cooperation framework.

 

Financial backing will come from Japanese commercial banks, public financial institutions, local banks, and leasing companies from both countries.

 

Key activities include business matching events, promotional seminars, and public awareness campaigns on energy conservation, aiming to connect Thai and Japanese businesses with relevant technologies and services.

 

 

Education Before Implementation

Japanese representatives stressed that the initial step towards energy reduction involves educating the private sector about carbon neutrality.

 

This begins with "visualisation" – making energy consumption transparent to enable targeted reductions – before transitioning from traditional to renewable energy sources.

 

The programme will connect Thai businesses with Japanese companies possessing the necessary technologies, enabling energy efficiency improvements through a gradual "Kaizen" approach rather than immediate system-wide changes.

 

Past business matching initiatives have attracted significant interest from Thai businesses, including those with existing environmental commitments and those primarily motivated by cost reduction.

 

While current economic conditions might deter some environmental investments, AZEC-SAVE offers low-risk financial services alongside concrete examples of cost savings, such as significant reductions achieved through air conditioning upgrades in Japan.

 

 

Strategic Advantages for Thailand

The AZEC-SAVE platform could offer Thailand strategic advantages in diversifying export markets, particularly towards Europe with its stringent environmental regulations and potential sanctions for non-compliant businesses.

 

"Actively working to reduce carbon dioxide emissions is definitely a prudent strategy," the Japanese delegation emphasised, noting Thailand's particular strengths within AZEC. "Other ASEAN nations often require assistance in upstream and midstream sectors. However, Thailand's upstream and midstream infrastructure is already robust. Thailand's key strength lies in the downstream industrial sector. Compared to Vietnam, Thailand's higher electricity costs could serve as a greater incentive for Thai businesses to focus on energy reduction."