CO₂ Strategy in ASEAN: Thailand Focus - Measure, Reduce, Monetize
- 2 days ago
- 5 min read
In an era where environmental, social, and governance (ESG) criteria are becoming paramount for businesses, Thailand is positioning itself as a frontrunner in carbon reduction strategies within the ASEAN region. The urgent need for organizations to measure their carbon footprint, reduce emissions, and monetize those reductions is no longer optional; it is essential for sustainable growth. This blog post outlines a structured approach to CO₂ strategy for Thai operators, focusing on how to navigate through current policies and practices effectively.
Why Act Now: The Case for Thailand
Thailand is at a turning point with significant policy momentum driving the need for immediate action on carbon reduction.
Policy Momentum in Thailand
The Department of Alternative Energy Development and Efficiency (DEDE) has set ambitious targets to achieve a 30% reduction in energy intensity by 2037. The new Building Energy Code is encouraging significant changes by enforcing energy-efficient practices across designated buildings and factories. This presents a clear framework for organizations to enhance their metering, reporting, and auditing processes.
Export Pressure
As global markets become more stringent regarding environmental impacts, particularly in the European Union with its Carbon Border Adjustment Mechanism (CBAM) set to levy penalties from January 1, 2026, Thai industries must align with low-carbon operations to remain competitive. The local government is pushing for clean energy and circular economy initiatives, enhancing their attractiveness to both investors and industrial estates.
Siting Advantages
Furthermore, initiatives like the Industrial Estate Authority of Thailand (IEAT) and the Eastern Economic Corridor (EEC) Circular Industrial Estate create favorable conditions for clean energy and circular projects. These areas benefit from better infrastructure and streamlined governance, making them prime locations for sustainable development.
Step 1: Baseline & Governance - Make Audits Easy
The first step towards an effective CO₂ strategy is to establish a clear baseline and effective governance.
Define Scopes & Sites
Start by mapping out your direct fuels and process heat, electricity usage, and fleet (Scopes 1-2). It is also essential to screen your top 20 suppliers for Scope 3 emissions. Utilize DEDE's criteria for designated buildings and factories to set instrumentation and reporting standards.
Instrument What Matters
Implement interval electricity meters, maintain fuel logs, and employ Building Management Systems (BMS) trend exports. Establishing calibrated sensors and maintaining evidence packs with photos, calibration certificates, and purchase orders is crucial for robust Measurement, Reporting, and Verification (MRV).
Nominate a Person Responsible for Energy (PRE)
Appoint a PRE who can keep the governance aligned with national norms. This person should develop a structured 12-month plan encompassing baseline assessments, measures, monitoring and verification, and the creation of an audit file.
Step 2: Build Your Abatement Curve - Harvest Quick Wins First
Once you have established a baseline, the next step is developing an abatement curve to identify and prioritize your emissions reduction strategies.
Plot Measures by Cost per Ton CO₂e and Payback
In Thai facilities, certain clusters typically yield quick wins, achieving paybacks within 6–18 months:
HVAC Optimization: Re-commission chillers, adjust set-points, and incorporate variable-speed drives (VSDs) for smarter pump logic. For example, Hilton Hua Hin upgraded their chiller and condenser pumps, resulting in a remarkable 36% energy savings and reducing CO₂ emissions by approximately 120,000 kg annually.
Motor Systems & Compressed Air: Fit VSDs to high-load motors, fix compressed air leaks, and ensure that compressor capacity aligns with actual demand.
Controls & Scheduling: Enhance BMS schedules, utilize occupancy-based ventilation, and adjust temperature dead-bands to maximize energy efficiency.
Step 3: Permits, Incentives & Finance - The Thai Routes
Navigating the regulatory landscape and securing necessary financing is crucial for the successful implementation of your CO₂ strategy.
Permits & Validations
Implementing plant-level changes such as heat recovery, on-site generation, and waste handling usually requires environmental and industrial permits. Initiate this process early to mitigate potential delays, as Thai authorities are progressively emphasizing environmental controls.
BOI Incentives
Investigate the Board of Investment (BOI) incentives that can be tapped for energy and circular projects. By mapping eligible activities to BOI codes, businesses can gain access to tax holidays and non-tax benefits. Consider starting with a Readiness Review to ensure alignment of codes, commitments, and planning timelines.
Green Finance Screens
Thailand has established a taxonomy for waste management and circular activities that set technical screening criteria for climate mitigation and adaptation. This can be particularly beneficial when discussing project financing with lenders, even if the initial reduction plan focuses primarily on energy efficiency.
Step 4: Turn Reductions into Value - Procurement & Credits
Merely reducing emissions is not enough; it’s vital to convert those reductions into tangible business value.
Procurement & Banking Proof
Create a Proof Pack that includes before-and-after data, third-party validations, and green building certifications (such as TREES or LEED). In Thailand, these certifications can lead to higher rental values and reduced operational costs.
Carbon Credits
Consider exploring carbon credits as a monetization route if feasible. Projects involving biomass residues or collaborations with pyrolysis and biochar initiatives can serve as supplementary revenue streams. Digital MRV/IoT solutions can enhance the verification processes, ensuring your initiatives are credible. For instance, projects like WongPhai and Planboo utilize digital MRV to verify small-scale biochar production.
Case Study: Low-Capex CO₂ Cuts in Hospitality - Hilton Hua Hin
Hilton Hua Hin faced challenges with aging pumps and inefficient manual operations that restricted chiller performance. Their solution involved replacing old chiller and condenser pumps along with the installation of VSDs and advanced control logic. The outcome was impressive—achieving a 36% energy saving and avoiding 120,000 kg of CO₂ emissions annually.
What You Can Copy
Consider implementing a 2-day HVAC walkthrough, validating pump curves, installing VSDs on primary movers, and ensuring strict adherence to set-point disciplines. All actions should be supported by interval metering and a clear M&V plan.
Your 10-Item Action Checklist - Use This Week
Appoint a PRE and publish an evidence list for each site, focusing on meters, logs, and calibrations.
Consolidate 12 months of interval data for electricity and key load processes, scheduling logger campaigns to fill any data gaps.
Conduct a 2-day HVAC walkthrough focusing on set-points, schedules, pump curves, and maintenance backlogs.
Draft your abatement curve, categorizing measures by cost per ton CO₂e and payback periods.
Define your Proof Pack to include essential documentation like photos, calibration certificates, and M&V plans.
Screen for BOI eligibility to ensure your projects align with activity codes, commitments, and scheduling.
Align initiatives with the green taxonomy to prepare for discussions with potential lenders.
Decide on monetization approaches, such as internal carbon pricing or carbon credit systems.
Plan for third-party validation, targeting TREES/LEED or conducting an independent energy audit.
10. Establish a 90-day action plan, holding regular quarterly audits to ensure compliance with DEDE norms.
As Thailand forges ahead in its CO₂ strategy, now is the time to implement these practices to enhance sustainability while boosting profitability.
Moving Forward
As businesses in Thailand and the broader ASEAN region grapple with rising compliance demands, understanding and implementing a robust CO₂ strategy can make a difference. It not only helps in mitigating climate change impacts but also unlocks new avenues for sustainable growth and profitability.
Ready to take the next steps? Book a CO₂ Feasibility Sprint (4 weeks) for a tailored approach to baseline analysis, abatement curve development, Proof Pack creation, and routing for BOI incentives and financing.
Contact us at AD ASIA Consulting for expert guidance on your journey toward sustainability.
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