Thai shrimp farmers urged to decarbonise now to escape new EU tax net

THURSDAY, MAY 25, 2023

Thailand’s shrimp farmers have been warned that a new European Union tax will take a big bite out of their billion-dollar export industry unless they start adapting now.

The EU's Carbon Border Adjustment Mechanism (CBAM) will collect tax on carbon-intensive imports from January 1, 2026.

CBAM taxes will initially apply to five products – aluminium, cement, iron and steel, electricity and fertilisers – but are expected to extend to shrimp and other agricultural products later.

That presents a headache for Thailand’s shrimp farmers, whose carbon footprint can be even larger than famously carbon-intensive beef farming.

According to the Centre for International Forestry Research, producing one kilogram of beef generates 1,440kg of CO2, while one kilo of mangrove-farmed shrimp generates 1,603kg of CO2.

Marut Suksomjit, an academic at Thammasat University Research and Consultancy Institute, said CBAM is spurring countries around the world to decarbonise their production processes to remain competitive in the EU market.

He confirmed that Thai shrimp could be targeted by the tax in future.

Given its national strategy to become a global food production hub, Thailand must prepare for CBAM with both direct and indirect actions, he added.

Thai shrimp farmers urged to decarbonise now to escape new EU tax net

Marut noted that shrimp farming generates huge revenue for Thailand, with Kasikorn Research forecasting exports worth US$1.06 to 1.1 billion this year.

However, he pointed out that whiteleg shrimp farming emitted at least three times more carbon than rice production.

Emissions from shrimp farms come mostly from food production (55%) followed by electricity usage (43%), he explained, citing Department of Fisheries data.

He advised shrimp farmers to reduce greenhouse gas emissions in their production process and/or boost carbon capture on their farms.

On the production side, farmers could improve efficiency of shrimp feeding in line with feed conversion ratios and set up solar cells to power aerators, he said.

On the capture side, they could grow mangroves in their farms to store carbon dioxide.

He said one rai of mangrove forest can capture 17.66 tonnes of CO2 per year, compensating for emissions in shrimp farming.

However, shrimp farmers would need government support to reduce emissions, especially from the Thailand Greenhouse Gas Management Organisation.

He also advised shrimp farmers to monitor electricity bills, shrimp raising records, feed information and the number of trees on their farms as part of carbon-reduction efforts.

Shrimp production was only one of many Thai sectors businesses that need to address decarbonisation to prevent impacts from the carbon tax, he added.