Global environmental measures squeeze Thai exports by 300 bn baht a year

While geopolitical factors have delayed full implementation in some cases, these measures are ultimately expected to be enforced in full.

Preparing in advance is therefore essential, as the transition will take time. Several countries have already developed transition finance mechanisms tailored to their contexts. 

Japan, for example, has issued its Basic Guidelines on Climate Transition Finance for industries still reliant on traditional energy but with long-term decarbonisation plans. 

The EU has introduced its Green Taxonomy alongside the Just Transition Mechanism, while Singapore offers its Green and Sustainability-Linked Loan Grant Scheme to accelerate business access to credit, particularly for SMEs.

Kriengkrai Thiennukul, president of the Federation of Thai Industries (FTI), said environmental and climate change challenges directly impact Thai industry.

The new collaboration will enable entrepreneurs, particularly SMEs, to more easily access green funding to invest in clean technologies and environmentally friendly production systems, in line with the FTI’s ‘4 GO’ policy — especially GO Green, which aims to steer Thai industry towards low-carbon production, efficient resource use, and environmental balance.

Beyond cutting long-term costs, Kriangkrai said, this approach will enhance the competitiveness of Thai industry in global markets that increasingly value environmental and sustainability standards. 

“I believe this cooperation marks a crucial starting point for Thailand’s industrial transition towards a tangible low-carbon economy,” he said.

Chaiwat Kovavisarach, chairman of the FTI’s Climate Change Institute, noted that Thailand emits about 350 million tonnes of carbon dioxide equivalent per year, with the energy and industrial sectors accounting for over 75%. 

Although this represents less than 1% of global emissions, turning climate challenges into opportunities could strengthen the country’s long-term economic resilience. For Thailand, he added, a key challenge lies in the lack of systematic data and technical support. 

Part of the institute’s mission is to help entrepreneurs — especially SMEs — access accurate information, develop carbon accounting, and adapt production processes to align with the country’s net-zero target. 

“Today, we are taking a step further by acting as a central mechanism linking industry with the financial sector, securing transition finance, and providing information and advisory services to drive sustainable industrial transformation,” he said.

The FTI has partnered with the Thai Bankers’ Association in a strategic collaboration to support Thailand’s shift to a low-carbon industry through the creation of a first-phase transition finance mechanism worth over 5 billion baht. 

This cooperation serves as a model for integrating finance and industry to advance Thailand towards a secure, competitive low-carbon economy.

The initiative aims to enhance the capacity of Thai entrepreneurs, especially SMEs, to access funding for environmentally friendly projects, promote clean technology adoption, and improve production efficiency.

This will reduce greenhouse gas emissions and help businesses adapt to the impacts of climate change — a systemic challenge affecting the economy, society, and public well-being.

Support for industry, one of the largest greenhouse gas emitters, will focus on two main areas:

• Mitigation – promoting the use of clean energy, upgrading to environmentally friendly machinery, investing in renewable energy, and adopting technology to improve production efficiency and reduce waste.
   
• Adaptation – designing production and logistics systems to be resilient to natural disasters, managing resources sustainably, and developing environmental restoration projects such as tree planting and carbon credit schemes.
   

“Transition finance under this partnership will be more than just a funding source,” Chaiwat said. “It will also cover advisory services, project feasibility assessments, and connections to carbon credit markets and international standards, ensuring maximum transparency and effectiveness in the use of funds.”