Power Development Plan: 2026 Plan Advances Alignment with Net-Zero Emissions by 2050

The Energy Policy and Planning Office (EPPO) is advancing the preparation of Thailand’s Power Development Plan for the period 2026–2050, designated as PDP 2026. This revision aims to secure reliable electricity supply over the long term      while ensuring full consistency with the nation’s accelerated commitment to achieving net-zero greenhouse gas emissions by 2050.

The Power Development Plan functions as Thailand’s authoritative strategic framework governing electricity generation, transmission infrastructure, and overall system reliability across an extended multi-decade period. It undergoes regular review to incorporate changes in economic projections, technological progress, energy security imperatives, environmental priorities, and evolving demand profiles. The forthcoming edition extends the horizon to 25 years and establishes a markedly more stringent emissions trajectory than prior iterations.

Principal Elements of PDP 2026:

•  Extended timeframe and accelerated climate target
The planning period covers 2026–2050, with the net-zero greenhouse gas emissions objective shifted forward from 2026 to 2050, aligning with prevailing international climate obligations.

•  Elevated renewable energy integration
The plan seeks a clean energy proportion surpassing 50% of total generation, emphasizing utility-scale solar photovoltaic systems, onshore and offshore wind capacity, and floating solar arrays on reservoirs operated by the Electricity Generating Authority of Thailand (EGAT). Technical potential for these renewable resources is assessed at 5,000–10,000 MW.

•  Upgraded reliability framework
Adoption of the Loss of Load Expectation (LOLE) standard, a globally accepted benchmark, restricts anticipated unserved energy to no more than 0.7 days per year (approximately 16 hours annually), preserving supply stability in the presence of variable renewables and increasing load requirements.

•  Anticipation of demand-side transformations
Forecasts integrate heightened electricity consumption arising from data centers, artificial intelligence infrastructure, rapid electric vehicle penetration, and volatility in international energy markets.

•  Assessment of advanced low-carbon solutions
The framework examines the prospective contributions of small modular reactors (SMRs) and carbon capture and storage (CCS) technologies as viable complements to support decarbonization while maintaining system firmness.

•  Economic and operational coherence
Projections rest on an assumed average annual GDP growth of 2.5–2.6%, with EGAT’s mandate adjusted to guarantee enduring system security.

Key Takeaways:

•  PDP 2026 signals a fundamental reorientation toward a renewables-led electricity system, channeling investment into solar, wind, battery storage, transmission reinforcement, and intelligent grid technologies, while constraining opportunities for additional coal and inflexible natural gas capacity.

•  Realization of the plan’s ambitions demands significant front-loaded capital allocation to infrastructure and flexibility assets to comply with the LOLE reliability threshold amid intermittent renewable output and demand escalation.

•  The transition promises sustained cost efficiencies and environmental benefits, including enhanced air quality, though it introduces short-term pressures such as tariff adjustments, reliance on global supply chains for storage and renewable components, and structured reskilling initiatives for communities linked to fossil fuel activities.

•  Effective execution will require prompt advancement in procurement procedures, market restructuring, transmission development, and dedicated just-transition policies to achieve a resilient, cost-competitive, and inclusive power sector in support of Thailand’s 2050 net-zero objective.

Author: Panisa Suwanmatajarn, Managing Partner.

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Draft Climate Change Act: Full Overview with Detailed Emissions Trading System (ETS) Explanation

Thailand is preparing to introduce one of the most comprehensive climate frameworks in ASEAN — the Draft Act on Climate Change B.E. … (the “Draft Act”). The Cabinet approved the draft in principle in 2025, and it is expected to pass Parliament and enter into force in early 2027 (B.E. 2570). Once enacted, the Act will serve as the primary legal instrument for achieving Thailand’s updated NDC 3.0 targets, including carbon neutrality by 2050 and net-zero greenhouse gas (GHG)emissions by 2065, practically aligning with earlier aspirations for net-zero by 2050.

The Draft Act is designed to complement the forthcoming Clean Air Act, creating a twin-pillar system addressing both greenhouse gas mitigation and air pollution control.

1. Overview of the Draft Act

The Draft Act consists of 205 sections across 14 chapters and establishes the following core legal mechanisms:

• Legally binding national climate targets and sectoral pathways;
• A centralized governance framework, including a National Climate Change Committee (NCCC) chaired by the Prime Minister;
• Five climate-related market-based and financial mechanisms:
  • Climate Fund,
  • Mandatory emissions reporting and an Emissions Trading System (ETS),
  • A proposed Thailand Carbon Border Adjustment Mechanism (CBAM),
  • domestic carbon tax, and
  • Thailand Taxonomy for sustainable finance; and
• Robust monitoring, reporting, verification (MRV), and enforcement provisions

• Key Requirements for the Private Sector

The Draft Act imposes binding obligations on covered entities and large emitters, including:

• Mandatory greenhouse gas (GHG) emissions reporting;

• Participation in the ETS (for regulated installations);

• Compliance with carbon tax and CBAM obligations;

• Submission of verified emissions and activity data;

• Exposure to audits and administrative sanctions; and

• Alignment with sustainability-related disclosure and taxonomy requirements.

• Detailed Explanation of the Emissions Trading System (ETS)

The ETS, codified in Chapter 8 (Sections 74–100), establishes a mandatory national cap-and-trade system and serves as the central economic mechanism under the Draft Act. It is designed to drive cost-effective emission reductions through a market-based approach. A national emissions cap will be set in accordance with Thailand’s climate targets, and tradable emissions allowances will be allocated through free allocation and/or auction. Entities that emit beyond their allocated allowances will be subject to fines.

• Core Design

Under the ETS design, Thailand’s system aims to gradually reduce emissions through an annually declining national cap. The system will regulate approximately 300 large or strategically significant industrial facilities and will issue “allowances,” each representing one tonne of CO₂e. Covered entities must monitor their annual emissions and surrender sufficient allowances by 30 April of the following year to match their verified emissions.

During the initial phase (2028–2030), most allowances will be distributed for free to ease the transition for industry; however, this free allocation will decline over time, shifting toward a more market-based approach where entities will increasingly need to purchase or trade allowances. A reserve of 5–10% will be maintained to support new entrants, plant closures, or early-action performers.

• Trading & Flexibility

The Draft Act permits flexibility mechanisms aimed at market efficiency:

• Bilateral over the counter (OTC) and exchange-based trading.
• Unlimited banking of surplus allowances.
• Limited borrowing of future allowances (up to 10–20% of next year’s allocation)
• Use of domestic and international offset credits, subject to a cap (approximately 5–10%)

• MRV Requirements

MRV is a central component of the ETS, ensuring credibility and enforceability of emissions data. Regulated entities must:

• Annual monitoring plans must be prepared and submitted.

• Verified reports emissions reports must be submitted by 31 March each year.
• Verification must be conducted by DCCE-accredited third-party bodies.
• The DCCE may conduct random audits to ensure compliance and data accuracy.

• Penalties

This Draft Act imposes criminal and administrative penalties according to the seriousness of the offence, including:

• Fines of up to THB 5,000,000 or three times the benefit gained for false reporting;
• Fines of up to three times the auction price for failure to surrender sufficient ETS allowances;
• Fines of up to THB 5,000,000 or three times the benefit gained for failure to comply with carbon border adjustment requirements;
• Imprisonment of up to three years and/or fines of up to THB 400,000 for violations of carbon tax enforcement; and
• Fines of THB 10,000–100,000, plus daily fines for unregistered carbon credit operations.
• Directors and responsible officers may also be liable for offences committed by a juristic person.

• Benefits for the Private Sector

• Policy certainty – Ensures consistent regulatory direction even amid government changes.
• Competitive protection – Provides safeguards for businesses through Thailand’s CBAM framework.
• Access to funding – Opens opportunities to Climate Change Fund grants and low-interest loans.
• Export readiness – Supports compliance with international CBAM requirements, including EU and UK frameworks.
• First-mover advantages – Rewards early adopters through carbon allowance sales and performance benchmarking.

• What the Private Sector Needs to Prepare (2026–2028 Roadmap)
• 2026: Foundational Preparation
• Build robust Scope 1, 2 (and material Scope 3) GHG accounting to establish a reliable emission baseline.
• Collect 2–3 years of historical activity data to support future reporting and verification.
• Self-assess likelihood of falling within around 3,000 entities expected to be subject to mandatory emission reporting, or within around 300 entities covered under the ETS.

• 2027: Strategic Planning and Readiness
• Conduct marginal abatement cost curve (MACC) analysis to prioritize least-cost mitigation actions.
• Participate in public hearings on upcoming regulations to stay aligned with emerging requirements.
• Train staff or contract accredited verifiers to ensure MRV readiness.

• 2028–2030: Alignment and Long-Term Integration
• Develop 2030–2050 decarbonization roadmaps consistent with sectoral and national targets.
• Budget for carbon-tax pass-through costs as carbon pricing mechanisms begin to take effect.
• Map supply-chain embedded emissions, especially for CBAM-affected firms, to prepare for cross-border compliance.

As the Draft Act is still undergoing the legislative process, businesses should closely monitor regulatory developments to ensure timely preparation and alignment with the final requirements.

Conclusion

The Draft Act marks a significant step in Thailand’s climate governance, establishing a comprehensive national framework and introducing tools such as the ETS, carbon tax, CBAM, and Climate Fund. For businesses, the Draft Act presents both obligations and opportunities. Early preparation will enhance regulatory readiness, unlock financial incentives, and support international competitiveness.

Key Takeaways

Businesses in or trading with Thailand should view the next 18–24 months as a crucial period to prepare for this transformative legislation.

Thailand is rolling out a comprehensive, EU-style climate package, combining national targets, an ETS, a carbon tax, CBAM, a Climate Fund, and the Thailand Taxonomy.

Large emitters will be subject to mandatory reporting starting year 2027–2028, with enforceable carbon pricing expected around 2030.

The system rewards early action and protects domestic industry.

The years 2026–2027 is the decisive preparation and influencing window.

Author: Panisa Suwanmatajarn, Managing Partner.

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Clean Air Management Act Advances: House Passage Signals Momentum Toward Enactment

In a landmark achievement for environmental governance in Thailand, the House of Representatives has approved the Draft Clean Air Management Act B.E. .… (ร่างพระราชบัญญัติบริหารจัดการเพื่ออากาศสะอาด พ.ศ. ….) in its second and third readings on October 21, 2025. This comprehensive legislation, poised to serve as Thailand’s inaugural framework for systematically combating air pollution—especially fine particulate matter (PM2.5)—preserves the pivotal Clean Air Fund following robust parliamentary defense grounded in academic evidence. With unanimous support in the final vote (309 in favor, none opposed), the bill now proceeds to the Senate, marking a critical step toward enshrining sustainable air quality protections into law. Its passage reflects a national consensus on addressing the profound health and economic repercussions of pollution, while balancing accountability with transitional support.

Key Features of the Legislation:

The act delineates a multifaceted strategy for air quality management, encompassing prevention, monitoring, enforcement, and remediation. Central to its efficacy is the “polluter pays principle,” which ensures that emission sources fund mitigation efforts. Chapter 6, the Clean Air Fund, remains intact as a specialized repository, differentiated from general environmental funds to guarantee targeted application.

Notable elements include:

•  Funding Mechanisms: Proportional levies on polluters based on emission quantities, augmented by fees, incentives for reductions, and penalties for violations.

•  Expenditure Priorities: Direct allocation for pollution control, compensation to affected individuals and communities, and subsidies for emitters transitioning to cleaner operations.

•  Oversight Structure: A dedicated committee to oversee operations, fostering transparency and the establishment of emission tracking systems and supporting infrastructure.

Additional provisions integrate economic tools—such as emission trading schemes and innovation grants—with civil remedies, criminal penalties, and administrative controls. Phased implementation clauses accommodate gradual adaptation across sectors, prioritizing those with outsized pollution impacts, including agriculture, industry, and transport.

Implications for the Public:

The legislation promises substantial relief for Thailand’s population, where air pollution annually contributes to over 9 million health-related incidents and incurs billions in medical expenses. The Clean Air Fund’s provisions for victim support—encompassing treatment reimbursements and enhanced community access to judicial remedies—directly empower those disproportionately impacted, such as low-income urban dwellers and rural populations enduring seasonal haze.

On a macro level, it bolsters nationwide air monitoring networks and public education initiatives, promoting equitable environmental justice. By channeling polluter revenues into remediation rather than relying on general taxation, the act alleviates fiscal pressures on public resources, enables swifter responses to acute pollution events, and cultivates a culture of shared responsibility. These reforms stand to yield enduring public health dividends, fostering a society where clean air is a realized right, unmarred by preventable respiratory ailments and productivity losses.

Impacts on Business Operations:

For enterprises in pollution-prone industries, the act heralds a paradigm shift toward internalized environmental costs. Mandatory emission inventories and scaled fees will elevate operational expenses for high emitters, potentially manifesting as charges per unit of pollutants like PM2.5 precursors, thereby influencing supply chains, pricing strategies, and profit margins.

Yet, the framework tempers these challenges with opportunities: fund-derived grants for technological retrofits and process optimizations can offset compliance investments, conferring a first-mover advantage in sustainability. Heightened enforcement—via fines, shutdowns, or legal liabilities—underscores the perils of inaction, while regulatory ripple effects may compel upstream suppliers to align with standards. Collectively, these dynamics propel businesses toward resilient, low-emission models, harmonizing profitability with Thailand’s green economic imperatives.

Preparations for Business Operators:

Anticipating enactment, operators in affected sectors should adopt a forward-looking compliance regimen:

1.  Conduct Emission Assessments: Perform detailed audits to map pollution profiles, pinpoint vulnerabilities, and align with anticipated regulatory benchmarks.

2.  Formulate Transition Strategies: Outline blueprints for adopting emission-abating technologies, such as advanced filtration or renewable integrations, while scouting fund-eligible subsidies.

3.  Implement Monitoring Frameworks: Deploy automated tracking systems and upskill staff on reporting obligations to synchronize with centralized data platforms.

4.  Foster Collaborative Networks: Engage trade bodies, consultants, and peers to shape subsidiary regulations and pool resources for collective adaptation.

5.  Refine Financial Projections: Integrate fee projections into fiscal models, evaluating scenarios for cost recovery through efficiency or market differentiation.

Proactive measures not only avert penalties but also catalyze innovation, positioning firms as exemplars in the evolving sustainable marketplace.

Current Stage and Next Steps:

As of October 22, 2025, the bill has secured passage through the House of Representatives following intensive deliberations across seven sessions since September 24, 2025. Originally comprising 104 sections, it expanded to nearly 300 through amendments, yet retained 90% of citizen-initiated content, including the Clean Air Fund, after evidence-based rebuttals to excision proposals.

The bill now advances to the Senate for review, with a 30-day initial deliberation period (extendable by another 30 days). Senate approval would precede royal assent, leading to publication in the Royal Gazette and staggered rollout over ensuing years. Continued stakeholder engagement—via submissions and advocacy—will be instrumental in upholding core provisions during this phase. Should timelines align, full enactment could precede the parliamentary dissolution anticipated in late January 2026.

Key Takeaways:

•  House of Representatives on October 21, 2025, with near-unanimous support, affirms the Clean Air Fund’s role in operationalizing the polluter pays principle for equitable pollution financing.

•  Citizens gain fortified protections through victim aid and rapid remediation, curbing the health burdens of PM2.5 and allied pollutants.

•  Businesses confront fee-based accountability, but benefit from transition incentives, demanding strategic audits and green investments for sustained viability.

•  Senate scrutiny looms as the decisive hurdle; vigilant public and expert involvement is paramount to safeguard the bill’s transformative potential.

•  This act epitomizes Thailand’s strategic pivot to environmental stewardship, intertwining cleaner air with inclusive prosperity for generations ahead.

Author: Panisa Suwanmatajarn, Managing Partner.

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