Seminar unlocks carbon credit certification process for SMEs

Addressing participants at the "Carbon Credit and Carbon Footprint: Opportunities and Challenges for SMEs" event, Kiatchai Maitriwong, Thailand Greenhouse Gas Management Organisation’s executive director, said that various policies would soon be enforced to compel companies to intensify their management of greenhouse gas emissions, both domestically and internationally.

The measures that have already been introduced include the Securities and Exchange Commission’s (SEC)’s elevation of the disclosure of Environmental, Social, and Governance (ESG) information of companies, including the disclosure of greenhouse gas emissions data, and activities surrounding the Bangkok Metropolitan Administration’s commitment to achieving Net Zero emissions by 2065. These initiatives, he added, reflect the growing recognition of the importance of addressing greenhouse gas emissions and promoting sustainability practices.

It is expected that such initiatives will be expanded to include other provinces in the future. In the next 2-3 years, certain businesses, such as the aviation industry, will be required to transition to using sustainable fuels. If they are unable to do so, they may need to purchase carbon credits or face restrictions on flying. Similarly, while the banking sector is already assessing the greenhouse gas emissions of companies before granting loans, it will need to make further adjustments if emissions exceed the standards. Such strictures also apply to major events, where the level of greenhouse gas emissions will be evaluated and measures taken should they exceed the standards.

So far, 1,680 companies worldwide have set a Net Zero target. Typically, larger companies are responsible for a higher volume of emissions and may find it challenging to fully offset their emissions through credits alone. This presents an opportunity for SMEs that, collectively, have a greater emissions volume to enter this market. 

If SMEs can generate carbon credits, they can sell them either internationally or to larger companies that are unable to manage their emissions effectively. The carbon credit market consists of both emitters seeking to reduce their carbon footprint and entities capable of generating carbon credits to offset emissions. This market operates through policy mechanisms and regulations, both domestically and internationally.

In terms of Thailand's current direction, controls will soon be put in place for reporting carbon footprints. These controls will enable the exchange of excess emissions allowances. Carbon taxes will be implemented in line with the country’s existing registration systems, T-ver and T-ver Premium, and a trading market called FTIX will be introduced.

Additionally, the country can use a portion of the credits and share them with other countries through the state's approval (ITMOs). It is therefore important that the domestic mechanism aligns with the lower demand for carbon credits compared to other countries. Achieving this can attract tourists and investment, and improve knowledge in negotiating Free Trade Agreements (FTAs) due to compliance with current trends, Kiatchai pointed out.

It is estimated that the carbon credit trading market could reach up to 325.45 billion baht so SMEs interested in participating in this market need to conduct thorough studies, While generating carbon credits involves various measures such as investing in tree planting, it should be understood that the trees must be newly planted rather than existing ones. The government's EV project, which is a large-scale initiative with significant results in reducing greenhouse gas emissions, although commendable, does not necessarily qualify for carbon credits or not. Carbon credits typically involve additional efforts specifically aimed at providing benefits to the country, rather than projects that are already part of the government's plan.

SMEs interested in carbon credits should submit applications for certification to the Carbon Management Organisation, which provides the standardized system known as T-ver and T-ver Premium, which are equivalent to international standards. The certification process involves several steps, as below:

1. Land boundary assessment

2. Project proposal development

3. Project eligibility verification

4. Project registration

5. Project monitoring and reporting

6. Quantity review

7. Carbon credit certification