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17 Apr 2025

Econ Digest

F1 adapts to ESG boosting Thailand’s tourism revenue by THB7 billion

คะแนนเฉลี่ย
Currently, Formula 1 racing is accelerating its efforts towards sustainability and environmental responsibility (ESG), aiming to achieve Net Zero Carbon emissions by 2030. Thailand has also submitted a proposal to host an F1 race, which presents a significant opportunity to connect the country to the global stage—especially in terms of the economy and the green industry.
Why is it important to reduce carbon emissions in Formula 1 (F1)?
    Formula 1 race cars serve as a model of innovation for consumer vehicles. Many F1 teams are also car manufacturers, and when they develop and refine new technologies in their race cars until those technologies become stable, the innovations are often transferred to regular passenger vehicles. For example, carbon fiber has been adapted for everyday cars to reduce weight and enhance speed. Similarly, hybrid engine technology—which combines internal combustion engines with electric motors—has been adopted to improve energy efficiency and reduce carbon emissions
Moreover, F1’s ESG efforts have sent ripple effects across the automotive industry and other sports. Formula E, a fully electric racing series, was inspired by F1’s carbon reduction initiatives and declared itself the world’s first sport to be certified as carbon neutral (net zero carbon footprint) from its inception.
Several prominent figures in the F1 world have openly supported this green direction. For example, Lewis Hamilton, a seven-time F1 world champion and an influential figure in fashion and music, decided to stop using his private jet, adopted a plant-based diet, and switched to electric vehicles to reduce his personal carbon footprint.
Where do Formula 1 (F1) carbon emissions come from?
Formula 1 produces carbon emissions comparable to those of small nations and ranks just behind the English Premier League in total emissions. In 2022, F1 released more than 223,000 tons of carbon dioxide—roughly equivalent to the annual emissions of countries such as Vanuatu, Tonga, and Dominica.
Many people assume that F1 race cars are the main source of emissions, but in reality, they account for less than 1% of the sport’s total carbon footprint. Nearly half of F1’s emissions (49%) come from transportation, followed by business travel (29%), event operations—including single-use plastic waste (12%)—and factories and facilities (10%).
How will Formula 1 reduce its carbon emissions?
The FIA, which oversees Formula 1 racing, has set a goal to achieve Net Zero Carbon Emissions by 2030. To align with this target, it has outlined several key strategies to reduce carbon emissions.

1.    Upgrading engine technology to generate approximately three times more electrical power. Currently, F1 race cars use turbocharged V6 hybrid engines, renowned for delivering the highest energy output relative to fuel consumption. By 2026, F1 plans to redesign its car batteries to increase electrical generation from 120 kW to 350 kW. This technology may eventually be transferred to consumer vehicles through leading automotive brands such as Ferrari, Mercedes, Audi, and Honda.                                                                                    
2.    Using 100% sustainable energy in race cars without compromising speed or performance—for example, energy derived from waste—which benefits society and helps advance environmentally friendly automotive technologies.
3.    Utilizing clean energy for transportation without affecting delivery schedules. Second-generation biofuels and hydrotreated vegetable oil (HVO) are being used to replace fossil fuels in transporting equipment between race venues across Europe.
4.    Generating clean electricity to meet the energy demands of every race venue, using HVO and solar panels as alternatives to diesel-powered electricity.
5.    Implementing a fully circular waste management system for events. All waste is recycled, composted, or reused. Greater emphasis is also placed on sustainability in food and product sourcing, along with efforts to reduce the use of single-use plastics.
6.    Reducing carbon emissions from spectator travel by expanding public transportation options and seating capacity to race venues, increasing EV charging stations around circuits, offering free bicycle services, and shifting more events to online formats to minimize travel.
Formula 1 plans to reduce its carbon emissions by using clean energy in race cars, transportation, and power generation, while promoting the use of sustainable materials and eco-friendly travel. These efforts aim to position F1 as a green innovation model for various sectors in the future.
F1’s carbon reduction plan creates opportunities for Thai businesses to pursue sustainable growth.
Hosting a Formula 1 race attracts hundreds of thousands of domestic and international spectators—not only during race week but also in the lead-up to the event—driving significant domestic spending on hotels, restaurants, and shopping. For example, Singapore, which has hosted F1 since 2008, generates approximately 143 million Singapore dollars (around 3.6 billion baht) in additional annual revenue from F1-related tourism.

However, hosting a Formula 1 race can be financially unprofitable, leading some countries to withdraw from hosting. For example, South Korea reportedly lost around USD 37 million (approximately THB 1.2 billion) in 2012, prompting it to pull out, before later submitting a bid to host the race again in recent years. India faced a loss of about USD 24 million (around THB 800 million) in 2013. Malaysia also experienced declining spectator numbers and rising costs, prompting it to cease hosting F1 events from 2018 onward.

Tourism sector
     If Thailand becomes a Formula 1 host, it is expected to attract around 200,000 to 300,000 spectators, boosting GDP by approximately 0.04% annually—or about 0.4% of Thailand’s tourism revenue. The investment is projected to break even within 3 to 4 years, driven by an estimated 7 billion baht in spending during a race weekend. However, even without hosting the event, Thailand’s tourism industry can still benefit from F1’s carbon reduction strategy, particularly through the development of low-carbon event ecosystems.
•    Promoting Thailand and Thai businesses on the global stage. Hosting a Formula 1 race showcases the country’s capabilities at an international level. Additionally, becoming an official sponsor of an F1 team helps elevate the visibility and image of both Thai companies and the nation. In the future, Thai companies in clean energy or electric vehicles (EVs) may also support racing teams or advertise their products during F1 events.
•    Agriculture, livestock farming, and the production and use of biodegradable packaging will see increased demand, as F1 events and race venues require environmentally friendly food products and merchandise.
       To participate in hosting F1 events and seize business opportunities, the private sector may need to adapt to FIA regulations. Meanwhile, the government could consider business support mechanisms such as tax incentives and the establishment of funds to promote research and development of technologies related to emission reduction.
If a government wishes to host a Formula 1 race, it must subsidize the investment. For example, the Singaporean government covers 60% of the initial investment cost of SGD 150 million (approximately THB 3.8 billion), as well as the annual operating expenses of SGD 135–140 million (around THB 3.4–3.5 billion). Similarly, the Australian government subsidized around AUD 102.3 million (approximately THB 2.2 billion) for the 2023 race.
Industrial sector 
Businesses related to electric vehicles and clean energy will benefit indirectly from Formula 1’s carbon reduction plan. For example:
•    Developing and manufacturing electric vehicles (EVs) and related components such as batteries, electric motors, and charging stations. Demand for EVs, auto parts, and EV infrastructure is expected to rise, driven by advancements in automotive technologies like fast-charging systems and energy loss reduction. These developments will help Thailand achieve its goal of making EVs account for 30% of domestically produced vehicles by 2030.
•    Advancing the production and management of sustainable energy, especially in transportation and electricity generation, which increasingly rely on renewable sources such as hydropower, wind energy, and vegetable oil-based energy.
•    Improving waste separation and management systems to support the production and development of clean energy from waste.
•    Enhancing energy management systems, particularly in energy storage and distribution through stable power grids, to accommodate high electricity demand during major events like F1 races.

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