Stakeholders in Thailand’s voluntary carbon market: Challenges and strategies

Key Stakeholders in Thailand’s Voluntary Carbon Market
       The continuous development of Thailand’s voluntary carbon market necessitates an understanding of the current stakeholders and their characteristics. Identifying these stakeholders is crucial for designing appropriate mechanisms and tools to encourage broader participation in the market.
       A report on the status and trends of Thailand’s voluntary carbon market in 2024, jointly conducted by KResearch and the Thailand Greenhouse Gas Management Organization (TGO), provides an overview of key market participants. The report categorizes stakeholders in the voluntary carbon market as follows:

Characteristics and Roles of Supply and Demand-Side Stakeholders
•    Supply-Side Stakeholders
       Supply-side stakeholders account for approximately 27% of all market participants. Their primary role is to develop and implement carbon credit projects. In terms of carbon credit supply, data on Thailand Voluntary Emission Reductions (TVERs) indicate that a total of 20.5 million tCO₂eq has been certified across 173 projects. Among these, renewable energy projects are the most prevalent, with 84 projects collectively generating 11.6 million tCO₂eq, which accounts for 56.5% of the total certified carbon credits.
       Furthermore, energy efficiency projects account for 15.4% of certified carbon credits, while forestry and agricultural projects constitute the smallest share, with only 2.7% of total certified greenhouse gas reductions.
Another key role of supply-side stakeholders is the sale of carbon credits generated from their projects. However, only 3.48 million tCO₂eq, or 17.0% of the total certified carbon credits, have been traded. This limited trading activity is due to project developers and owners having the discretion to determine the volume and timing of credit sales or to retain credits for internal greenhouse gas offsetting purposes.
       Transaction data on carbon credit trading (Figure 1) indicates that renewable energy projects represent the largest share of traded credits at 78%, followed by waste management projects at 12% and forestry projects at 10%.
However, the lower trading volume compared to the total certified carbon credits suggests two possible market dynamics among stakeholders in the voluntary carbon market:

1.    Certified carbon credits are not brought to the market by sellers, as they intend to utilize them for their own purposes.

2.    The limited demand for carbon credits results in selling prices that are not sufficiently attractive for project developers or owners to sell.

•    Demand-Side Stakeholders
       Organizations, both domestic and international, seek to acquire Thailand Voluntary Emission Reductions (TVERs) to offset greenhouse gas emissions resulting from their operations. These demand-side stakeholders account for approximately 13% of all market participants.
       As of September 2, 2024, the total volume of TVERs utilized for offsetting emissions from organizations, products, events, and individual carbon footprint compensation amounts to 1.88 million tCO₂eq. Over the past three years, the average annual offset has been approximately 455,000 tCO₂eq. In contrast, Thailand’s annual CO₂ emissions stand at approximately 270 million tons, highlighting the significant potential for further greenhouse gas mitigation through carbon credit utilization to support organizations in achieving carbon neutrality.

Approaches to Carbon Market Development Through Stakeholder Challenges
       Thailand’s voluntary carbon market remains in its early stages, with significant potential for further development. The current level of greenhouse gas emissions offsetting remains relatively low, accounting for only 0.17% of total emissions. Enhancing the market’s growth requires collaboration among key stakeholders, including government agencies, private sector entities, academic institutions, and international organizations, to promote broader participation and market adoption. To support both supply- and demand-side stakeholders, KResearch has proposed the following development strategies:

1.    Increase avenues for using carbon credits to offset domestic greenhouse gas emissions through mandatory policies by establishing tools such as carbon taxes, which allow for partial offsetting using carbon credits, or by setting time limits.

2.    Develop internationally recognized standards for registering, measuring, and certifying projects to expand the market and increase demand for the widespread use of carbon credits, such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), International Maritime Organization (IMO) initiatives, or the ability to convert between standards, etc.

3.    Provide financial support through tax relief measures for expenses related to the evaluation and certification of carbon credits, as well as offering low-interest loans for the development of carbon credit projects, helping to reduce costs for project developers.

4.    Develop guidelines and promote greenhouse gas reduction practices for the public and businesses (Best Practice) to build knowledge about implementing carbon credit projects, including the application of carbon credits, particularly in communities that may lack knowledge but have the potential to implement carbon credit projects, thereby attracting new organizations or agencies to join Thailand’s voluntary carbon credit market.

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