11 Key Takeaways from Thailand’s First Climate Change Act

Thailand has taken a historic step by introducing its first-ever Climate Change Act, a landmark law set to transform the country’s economic and environmental systems. Why is this law significant? Because it marks a turning point in Thailand’s “Climate Change era”, laying the legal foundation for achieving Net Zero and reshaping national development.

The Cabinet approved the principles of the Climate Change Act on December 2, 2025, making it Thailand’s first master law on climate governance. It establishes a national framework for managing greenhouse gas emissions, fulfilling commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and driving Thailand toward the goals of carbon neutrality (Net Zero) and net-zero emissions.

1) Four national-level governance bodies established

The legislation mandates the creation of four major committees:

• National Climate Change Policy Committee — sets policies, targets, and Thailand’s international stance
• Climate Fund Committee
• Climate Fund Evaluation Committee
• Greenhouse Gas Management Organisation — oversees emissions and carbon-related mechanisms

2) Creation of the “Climate Fund” as a state legal entity

The fund will collect revenue from carbon-related mechanisms — such as carbon taxes, fees, and carbon credit trading — and allocate them to clean energy investment, community adaptation projects, and greenhouse gas reduction programmes.

3) National greenhouse gas data system

Public and private sectors will be required to collect and report emissions, carbon sinks, and net reductions. A national greenhouse gas registry will be established to ensure transparency.

4) National emissions reduction plan

The Act requires a national master plan and action plans to ensure unified climate targets across all ministries and agencies, with short-, medium-, and long-term emission reduction pathways.

5) Emissions Trading System (ETS)

The law lays the foundation for a Thai ETS, enabling businesses to buy, sell, transfer, and hold allowances for greenhouse gas emissions. A national registry and allocation rules will govern the system.

6) Cross-Border Carbon Adjustment Mechanism (CBAM)

The Act accommodates CBAM measures, meaning imported goods may face carbon charges based on emissions from their countries of origin — aligning Thailand with emerging international standards. (Details will follow in secondary legislation.)

7) Carbon tax for high-emission sectors

The draft law introduces a carbon tax for products or activities with significant emissions — a key instrument enforcing the polluter pays principle.

8) Carbon credits recognised as legal “assets”

Certified domestic carbon credits will be recognised as legal property. They can be bought, sold, transferred, or used to offset emissions, with mandatory registration under the Greenhouse Gas Management Organisation.

9) Climate adaptation planning

Beyond mitigation, the Act requires national, provincial, and local adaptation plans to address climate risks such as floods, droughts, and extreme weather, supported by government resources.

10) National sustainability taxonomy

A central “taxonomy” will be created to classify environmentally friendly economic activities. This will guide green investment, policymaking, and financial instruments, similar to international sustainable finance taxonomies.

11) Penalties for non-compliance to ensure seriousness

The Act includes clear penalties, such as:

• False reporting: fines of 30,000–300,000 baht plus daily fines
• Failure to submit emissions reports: fines up to 100,000 baht plus daily fines

This aims to enforce accurate reporting and credible climate action.

Why this law matters — Thailand’s major turning point

This is Thailand’s first comprehensive climate law, integrating all climate tools into one framework: data systems, funds, carbon tax, carbon credit markets, ETS/CBAM mechanisms, and adaptation plans. No more fragmented or isolated climate measures.

It paves the way for a real low-carbon economy, sending a strong signal to businesses and investors that carbon transparency and clean technology investment will become essential.

It enhances Thailand’s credibility internationally under the UNFCCC, ensuring the country has the legal framework to meet its global climate responsibilities.

What comes next?

Following Cabinet approval of its main principles, the law will enter the phase of drafting secondary legislation and coordination with government agencies, businesses, and industry sectors. Details still pending include:

• Carbon tax rates
• ETS allocation rules
• CBAM implementation
• Climate Fund mechanisms

High-emission industries are encouraged to prepare now, as environmental costs will increasingly become real financial liabilities under the polluter-pays principle.