China, the US and European Union (EU), which are Thailand’s key trade partners, have announced their net-zero commitments while also implementing various environmental measures to achieve these targets, as follows:
China has established the national emissions trading scheme (ETS), imposed a ban on plastic waste imports and restricted plastic consumption. The Chinese government is set to implement more stringent environmental measures to achieve its peak emission target by 2030 and net carbon neutrality target by 2060.
The US is scheduled to collect a carbon border adjustment fee and an excise tax on virgin plastics. It will also implement measures related to clean energy such as tightening up energy-efficient standards for a transition towards electric vehicles, along with other measures to achieve its net-zero target by 2050.
The EU has imposed a ban on sales of single-use plastic products, and this measure will cover other plastic products in the future. It is scheduled to introduce the Carbon Border Adjustment Mechanism (CBAM), ban fossil fuel vehicles and implement other measures under the European Green Deal to achieve a net-zero target by 2050.
During the early phase, it is expected that the impact of such measures on Thai exports will be seen in several product categories that create a high level of adverse impact on the environment such as plastics, vehicles, iron, cement and aluminum. Over the short-term, KResearch expects that Thai plastic exports will be the most affected because: 1) Their export share is relatively high, and they will be affected by environmental measures that have already been implemented; 2) Environmental measures related to plastics will become more stringent; and 3) Production of biodegradable plastics, which serve as a substitute for plastic products, cannot be bolstered for export in the short-term.
Although Thai shipments may slow down in 2022 due to the Russia-Ukraine war, Thai entrepreneurs are advised to accelerate their efforts in bracing for environmental measures because low-emission businesses will be more competitive and ready to comply with environmental measures introduced by trade partners and the relevant authorities in the future.