Thai corporations to launch carbon credit exchange

Thailand’s state-owned electricity generating company, along with ten of the nation’s leading corporations, has initiated a pioneering voluntary emissions-offset program. Termed the “Carbon Markets Club,” this collaborative effort includes notable entities such as Charoen Pokphand Group, one of the world’s largest conglomerates, and BTS Group Holdings, a prominent transit operator in Bangkok. By banding together, these influential companies are demonstrating their commitment to environmental stewardship and proactive engagement in mitigating climate change. This initiative not only highlights the growing recognition of corporate responsibility but also signifies a significant step towards fostering sustainable practices within Thailand’s business landscape.

Since its early start in June, the club has traded ~15,000 tonnes of CO2. The intent is to expand into a full carbon-trading exchange for the whole country. There are +40 other companies that have expressed interest in joining the group.

The plan is to build a system similar to exchanges in the European Union and China, where big emitters offset their carbon footprint by purchasing credits from companies.

Club members can trade credits over-the-counter in an effort to speed up energy transition. Revenues from the trades would be invested in clean energy or technologies.

With million tonnes of supply and not a lot of companies wanting to cap their own emissions, Thailand’s voluntary system still has more supply than demand and the prices are less than $1 per tonne.

This is a stark contrast to the other markers such as the EU where pricing is above $60 per tonne. The EU, where carbon-intensive sectors such as oil and steel are subject to a cap-and-trade that can push up prices as authorities tighten climate goals.

The Thai Government has also been promoting a bio-circular-green economic model, and their own voluntary emission reduction program called T-VER.

The ultimate goal is to extend the carbon market beyond T-VER to provide a platform for trading all carbon credits both within the country and across borders.

Voluntary corporate commitments to net-zero emissions are the main driving force behind increased carbon-credit demand, according to a World Bank report.

This is part of a bigger global effort to reduce climate change impacts and limit global warming from pre-industrial levels to well below 2 degrees Celsius.

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