Thailand is continuing on its path toward comprehensive legislation to address climate change. In November 2024, the country’s Ministry of Natural Resources and Environment (MNRE) launched a public hearing on a new draft Climate Change Act following revisions made after an earlier hearing on a previous draft of the act. The revised version strengthens Thailand’s climate policy framework by introducing the Carbon Border Adjustment Mechanism (CBAM), modeled after the EU’s system of the same name. The new draft also restructures the planned Emissions Trading Scheme (ETS) and enhances carbon-tax provisions. These initiatives aim to minimize carbon leakage, promote fair competition for domestic industries, and encourage lower greenhouse gas (GHG) emissions. As of March 2025, the Department of Climate Change and Environment, under the MNRE, is awaiting the Ministry of Finance’s input on the draft act’s establishment of the Climate Fund, a fund to support business innovation in responding to climate change. After incorporating this feedback, the department will submit the refined draft for cabinet approval, expected in 2025. The legislation will then undergo Council of State review, with implementation expected in 2026. Key Provisions The draft Climate Change Act contains a number of provisions that will affect businesses. Some of the most relevant are discussed below. Mandatory ETS The ETS is a mandatory mechanism designed to control GHG emissions by setting emissions caps for designated industries in alignment with national targets. Under this system, businesses receive emissions allowances allocated through free allocation or auctions. This scheme incentivizes emissions reductions by allowing businesses that emit less than their allocated allowances to sell their surplus allowances. The specific business sectors covered by the ETS have not yet been identified in the draft act, as details are expected to be in subordinate legislation. However, it is anticipated that the sectors will align

Thailand’s Ministry of Energy (MOE) has announced the launch of the 25th bidding round for petroleum exploration and production. This round offers nine greenfield onshore blocks—seven in northeastern Thailand and two in central Thailand—encompassing over 33,000 km². The bids can be submitted from July 1 to July 16, 2025. The sizes and locations of these blocks are: Northeast Thailand Block L1/66: 3,223.51 km² (Khon Kaen, Nong Bua Lam Phu, Udon Thani) Block L2/66: 3,917.03 km² (Kalasin, Sakon Nakhon, Udon Thani) Block L3/66: 3,918.22 km² (Kalasin, Khon Kaen, Maha Sarakham, Udon Thani) Block L4/66: 3,656.65 km² (Amnat Charoen, Mukdahan, Nakhon Phanom, Yasothon) Block L5/66: 3,436.01 km² (Chaiyaphum, Khon Kaen, Nakhon Ratchasima) Block L7/66: 3,438.51 km² (Buri Ram, Maha Sarakham, Nakhon Ratchasima, Roi Et, Surin, Khon Kaen) Block L9/66: 3,885.44 km² (Nakhon Ratchasima) Central Thailand Block L6/66: 3,966.86 km² (Chaiyaphum, Lop Buri, Phetchabun) Block L8/66: 3,957.41 km² (Kanchanaburi, Nakhon Pathom, Ratchaburi, Suphan Buri) Bidding Process Interested companies must submit their bids to the Department of Mineral Fuels (DMF) between July 1 and July 16, 2025. Bids should include: Application form (ChorThor/Por1) Proof of eligibility: Corporate documentation, audited financial statements, and proof of resources Technical and commercial proposals: Exploration plans, geological surveys, financial and work commitments, and special benefits such as signing bonuses of at least USD 100,000. There is a nonrefundable THB 50,000 application fee per block, and applicants must provide a bid bond of THB 3 million per block via an unconditional bank guarantee from a commercial bank with branches in Thailand, valid for at least one year from the bidding submission date. The guarantee will be returned to unsuccessful bidders upon request and to successful bidders upon the signing of the concession agreement. Eligibility Bidders must meet the following main eligibility criteria: Bidders must be limited companies with the following qualifications: The company must have the objective of

Thailand’s Department of Industrial Works (DIW) has issued a new regulation (Ministerial Regulation Re: Designation of Type, Kind, and Size of Factories (No. 3) B.E. 2567 (2024)), which removes the factory license requirement for electricity generation from solar energy installations on rooftops, roof decks, or any part of a building used for residential or other purposes, regardless of capacity. The new rules took effect on December 28, 2024. Under the previous regulations, solar rooftop installations had to seek approval from the DIW if their capacity exceeded 1,000 kW (1 MW), which added time and administrative costs when adopting renewable energy solutions. Benefits and Further Compliance The updated regulation benefits industrial operators by facilitating faster installation times and lower costs, as solar rooftops can now be installed without the need for prior approval of a factory license from the DIW. Operators can now more easily contribute to environmental sustainability and carbon reduction efforts. Despite the lifting of the factory licensing requirement, other compliance obligations, such as an energy business license (or exemption from an energy business license), a controlled energy production license, and a construction permit, may still apply. Reason for the Change Removing the classification of rooftop or building-installed solar power plants as factories aligns with Thailand’s renewable energy goals and reduces regulatory burdens for industrial operators. Additionally, it supports the achievement of energy policies aligned with the UN’s Sustainable Development Goals and Thailand’s international commitments to reduce greenhouse gas emissions through the participation of all sectors. For further details on how this change affects business operations or to explore strategies for renewable energy implementation, please contact Supasit Boonsanong at [email protected], Charuwan Charoonchitsathian at [email protected], or Phareeya Yongpanich at [email protected].