KResearch highlights 3 key factors shaping Thailand’s Net Zero success
Thailand accelerates Net Zero to 2050. K-Research names 3 keys: regulations, stranded asset risk, and funding. Success requires a swift energy and transport transition.
- A primary driver is a strong regulatory push, including a Clean Air Act, a Climate Change Act establishing a mandatory carbon market, and a revised Power Development Plan to accelerate renewable energy and phase out coal.
- A second key factor is managing the risk of stranded assets in the energy and transport sectors, as fossil fuel infrastructure like coal power plants and diesel trucks will become obsolete before their operational lifespan ends.
- The third driver is closing a major budget gap, requiring annual investment to increase from 0.24 trillion to over 1.28 trillion baht from both public and private sectors to fund renewable infrastructure and the electrification of industry.
KASIKORN Research Centre (K-Research) reports that the Prime Minister's Anutin Charnvirakul announcement, to accelerate Thailand's Net Zero goal by 15 years to 2050 and target a reduction of 370 million tonnes of carbon dioxide equivalent per year, will be a significant issue at this year's COP30.
Countries are expected to announce their 5-year carbon reduction plans up to 2035.
If the Prime Minister confirms this ambitious goal, it will entail a major transformation of the Thai economy, though several challenges must be addressed.
K-Research identifies the success of this policy as dependent on three main factors:
1. Regulations as the Primary Driving Force
Clean Air Act: Already submitted to the Cabinet, this act includes penalties for exceeding pollution standards, forcing manufacturers to invest in monitoring and control systems.
Climate Change Act: This law will establish legal mechanisms, penalties, and a sustainability fund. Its core feature is a "mandatory carbon market," which compels companies to track and reduce emissions and boost carbon credit trading.
Revised Power Development Plan 2024 (PDP): It targets 51% renewable energy by 2037 and is expected to be further adjusted.
This includes an earlier phase-out of coal (currently set for 2050) and a ban on new coal plants.
It accelerates the adoption of solar power plus storage, as their lifecycle cost is 21.9–55.4% lower than new coal plants.
Additionally, it promotes converting combined cycle gas power plants to use hydrogen and increasing investment in Carbon Capture technologies.
2. Stranded Assets
The energy and transport sectors are responsible for 69% of total emissions, making them the policy's core focus, but they also carry high stranded asset risk.
The 2050 Net Zero target mandates the phasing out of fossil fuel-based energy systems. This impacts:
Coal Power Plants: Already scheduled for decommissioning by 2050 and likely to be fast-tracked.
Gas Power Plants: Several plants scheduled to operate beyond 2050 will need to transition to hydrogen use to avoid becoming stranded assets.
In the transport sector, new diesel trucks have an operational lifespan of up to 30 years, exceeding the transition deadline. Measures to gradually phase out or restrict new purchases are necessary, as the remaining value of these assets will depreciate significantly closer to the deadline.
3. Budget Gap
To achieve the 2050 Net Zero goal, Thailand needs an annual investment of over 1.28 trillion baht, a sharp increase from the current expenditure of about 0.24 trillion baht/year.
This requires scaling up both public and private investment:
Public Sector: Must expand investment in renewable energy and power infrastructure (grid system, charging stations, transmission).
Private Sector: Needs to accelerate the adoption of electricity in transport and production processes (e.g., in the steel and cement industries).
