Thai Cabinet Approves Draft Climate Change Act to Establish a Statutory Framework for Climate Change Management

On 2 December 2025, the Thai Cabinet approved in principle the Draft Climate Change Act B.E. (…), as proposed by the Ministry of Natural Resources and Environment. The Draft Act represents a key step in strengthening Thailand’s approach to climate change and is intended to support the country’s commitments under the United Nations Framework Convention on Climate Change (UNFCCC). The current draft coordinates climate policy and implementation through a centralized structure led by the National Climate Change Policy Committee, with additional oversight by the Climate Fund, and expands the role of the Greenhouse Gas Management Organization with regard to measurement, reporting, and verification of greenhouse gases.

Key Highlights of the Draft Law:

Climate Fund and financing mechanisms:

A Climate Fund will be established, as a juristic person and non-ministerial state agency, to finance climate mitigation and adaptation measures. Funding sources may include revenue from emissions trading systems, cross-border carbon adjustment mechanisms, carbon credit fees, subsidies, private-sector contributions, and administrative penalties. Fund assets will not be required to be remitted to the State Treasury.

National GHG data and planning obligations:

The Draft Act mandates the establishment of a national greenhouse gas database, to which public and private sector entities will be required to submit activity data. A National Greenhouse Gas Reduction Action Plan will be prepared to guide implementation by state agencies in line with national targets and master plans.

Market-based and fiscal instruments:

The Draft Act introduces a mandatory greenhouse gas emissions trading system (ETS), administered by the Department of Climate Change and Environment, including allowance allocations, registries, trading, and surrender obligations. It also provides for a cross-border carbon adjustment mechanism (CBAM) for designated imported goods and introduces a carbon tax applicable to 31 categories of goods, subject to statutory caps and administered by the Excise and Customs authorities.

Carbon credits and taxonomy:

Carbon credits are expressly recognized as transferable property. Only certified domestic projects may generate credits for domestic or international use, and transfers will be effective only upon registration. The Draft Act also introduces a standardized climate- and environment-aligned economic activity classification system to support consistent policy and funding decisions.

Compliance and penalties:

The draft act establishes a system of administrative penalties for non-compliance, including sanctions for false reporting, concealment of information, or failure to submit required greenhouse gas reports, pursuant to which fines and daily penalties may be imposed until corrective action is taken.

Please note that this legislation is still at a preliminary stage. The Thai Cabinet has approved the Draft Climate Change Act B.E. (…) in principle only, and several additional procedural steps must occur before the draft act becomes law. Consequently, it is expected to take several years before the Draft Act is finalized and comes into effect. Once enacted, the Draft Act is expected to have wide-ranging implications for industrial operators, importers, and carbon market participants, so business operators may wish to monitor further legislative developments and assess compliance readiness.

This article is intended to provide merely a regulatory overview and is not intended to be comprehensive or to constitute legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact:

Nuttaros Tangprasitti
(Partner)

Natrada Ruangwuttitikul
(Associate)

Authors