The 6th Asia Clean Energy Forum 2011 at the ADB Headquarters, Manila, Philippines on 23 June 2011

Carbon and Energy Finance: Domestic Carbon Trading

Pongvipa Lohsomboon
Carbon Business Office Thailand Greenhouse Gas Management Organization

Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)

Thailand GHG Emission in 2000 ~ 229.08 MtCO2e

Emission (1000 tons)
120,000

69.6%

100,000

80,000

60,000

22.6% 4.1%

40,000

7.2%
20,000

-3.5%
0 Energy Industrial Agriculture Landuse change & forestry Wastes

Sources of emission by sector

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Carbon Market in Thailand

Currently, there is no domestic market established in Thailand, but Clean Development Mechanism (CDM) was achieved in which carbon offsets are sold to external buyers in international compliance markets. To strengthen the existence of CDM, Thai government introduced substantial market incentives such as Thailand Carbon Fund, tax exemption. The incentive removes the requirement from developers of CDM and voluntary emission reduction projects to pay the standard 30% corporate income tax rate on income derived from the sale of CERs and VERs.

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Objectives of Establishing Voluntary domestic carbon market

Support voluntary GHGs reduction activities Achieve cost-effective GHGs reduction Learn how to manage domestic emission trading / carbon offsetting Encourage private companies who attempt to reduce their GHG emissions with their own targets on voluntary basis by giving economic incentive

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Structure of Voluntary Carbon Market in Thailand

VCM in Thailand

Pre-registered

CDM

Offsetting

ETS in
Industrial sector

VERs

LCC

Energy Efficiency Set up MRV, Std.

Etc.

Methodology Development

Intl Std.: VCS, GS

Set up MRV, Std.

Buyers: Intl
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Low Carbon Cities Programme

Participating cities prepare a GHG inventory and set a voluntary reduction target. The cities can then implement voluntary emission reduction projects within their boundaries. After successful validation, registration and certification at TGO, the cities will receive Thai-VERs. The methodologies for the city programme are currently under development and they will comprise reduction measures such as changing of light bulbs, renewable energy, bike lanes, etc.

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Domestic Voluntary Carbon Offset

Baseline-and-credit system Thai-VER methodologies for domestic projects, such as energy efficiency, fuel switching, landfill, reforestation projects, are under development. Thai-VERs can be used by domestic companies, public institutions and other entities for Corporate Social Responsibility (CSR) purposes and for offsetting emissions.

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Voluntary Emissions Trading in Industrial Estates

TGO and the Industrial Estate Authority of Thailand (IEAT) are currently planning a voluntary pilot Emission Trading Scheme in an industrial estate. Installations/companies in this pilot estate that participate in the trading scheme voluntarily will receive emissions units according to their emission targets. The emission units can be traded and sold to other participating installations. Thai-VERs could also be used by installations to fulfill their emission targets. The Emissions Trading Scheme would hereby increase the demand for Thai-VERs. After the completion of the pilot phase, it is intended to include other industrial estates in the scheme. Later, the Emissions Trading Scheme could cover all areas and relevant installations in Thailand.
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Challenges and Assistance

National / ETS Registry
Thailand Domestic Carbon Market

Incentives

1.Government

ThaiVERs

Buyers
2.Carbon Offsetting Program 3. Among industries

MRV system

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