The Race to Low Carbon Emission: Thailand’s Automotive Industry

Thailand’s government has announced plans to introduce a carbon tax by 2025, making it the second ASEAN country after Singapore to adopt such a measure. The tax, priced at THB 200 (USD 5.88) per metric ton of carbon emissions, is designed to promote sustainable practices and tackle climate change. The tax will first apply to oil products and be integrated into the current oil tax system to ensure a revenue-neutral transition.

This strategy aims to prevent increases in retail oil prices while encouraging environmentally friendly behavior. The Thai Cabinet has approved this tax structure, noting its potential to influence consumer habits without raising costs for industries. Deputy Finance Minister emphasized that this restructuring incorporates carbon pricing into the oil tax, keeping retail oil and product prices stable.

The latest report by the United Nations Development Program (UNDP) on Thailand’s Low Emission Vehicle Ecosystem explains the country’s EV system using a simple circular diagram. This diagram is divided into sections, rings, dots, and lines. The sections represent three main parts:

• The automotive industry and vehicle technology.
• The energy system for road transport.
• Climate policy and carbon credit mechanisms.

Three rings overlap these parts:

• The innermost ring represents carbon and greenhouse gas emissions.
• The middle ring shows the value chain and infrastructure.
• The outermost ring highlights policies and regulations for EV technologies.

Dots inside the circle show key topics, and lines connect related topics between different sections.

The automotive industry has been a key driver of Thailand’s economy since the 1960s, contributing around 18% of the GDP in 2021, according to the National Economic and Social Development Board. From 2010 to 2023, the number of light and heavy-duty vehicles increased from 10.8 million to 20.8 million, averaging a 4.8% annual growth. Motorcycle stocks rose from 17.3 million in 2010 to 22.7 million in 2023, with an average annual increase of 2%. In 2023, motorcycles dominated the sector at 53%, followed by passenger cars (27%) and commercial vehicles (20%). Chulalongkorn University’s Energy Research Institute (ERI) predicts that total vehicle stocks will reach 49 million by 2030.

The transport sector is undergoing a significant shift toward sustainability and innovation, driven by global trends, technological advancements, market opportunities, and climate change pressures. These factors have led to policy goals such as carbon neutrality by 2050, net-zero emissions by 2065, and Nationally Determined

Contributions (NDCs) targets for the transport sector. The government’s “30@30” policy aims for 30% of vehicle production to be zero-emission by 2030, positioning Thailand as a hub for advanced vehicle production, particularly EVs. To achieve this, Thailand has introduced various incentives, including foreign investment promotion, import tax reductions for EV machinery, domestic EV campaigns, and purchase subsidies. The government also supports infrastructure development, such as automotive testing centers and nationwide charging stations, alongside hydrogen demonstration projects to test hydrogen as a vehicle fuel.

Over the past decade, Thailand’s road transport sector has experienced steady growth, leading to increased energy consumption, economic expansion, vehicle ownership, and urbanization.

In 2022, road transport consumed 26,336 kilo tons of oil equivalent (ktoe), accounting for nearly 85% of the country’s transport energy demand and almost 40% of total energy consumption. The rise in EV demand has also increased electricity consumption, with road transport electricity use rising from 1 GWh in 2021 to 15 GWh in 2022. However, these figures include electricity used by electric public trains and EVs. The Energy Research Institute (ERI) forecasts that road transport electricity demand will reach 17,775 GWh by 2030 due to the 30@30 EV policy.

The energy value chain in road transport involves multiple phases, from primary energy extraction to final energy use in vehicles, primarily in the form of gas, conventional fuels, biofuels, and electricity, with hydrogen expected to play a future role.

Thailand, a UNFCCC member since 1994, has exceeded its 2020 GHG reduction target and aims for a 40% cut by 2030 (216 mtCO2eq) across sectors like energy, transport, and agriculture. The transport sector could reduce emissions by 45.5 mtCO2eq through electrification and alternative fuels. Thailand’s NDC plan includes mobility improvements, green logistics, and infrastructure support. The T-VER program, launched in 2012, has over 380 projects, with 34 certified, reducing 1.76 mtCO2eq. Six transport projects, mostly EV-related, aim to cut 2,859 mtCO2eq.

Thailand collaborates with Japan under JCM, with 49 projects expected to reduce 262,357 mtCO2eq. Transitioning to the Paris Agreement’s Article 6, Thailand’s first EV project with Switzerland will deploy 2,000 electric buses in Bangkok, targeting a 500,000 mtCO2eq reduction and better air quality.

Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor & MEGA Tech Facebook Twitter Pinterest