Thai cabinet approves carbon tax

On 21 January 2025, Thailand’s cabinet resolved in principle to approve a law to introduce a carbon pricing mechanism in excise tax rates imposed on oil and oil products.

The draft law, in the form of a ministerial regulation proposed by the Ministry of Finance, will initially set the carbon price at Baht 200 per ton of carbon equivalent.

The carbon price will be shown as part of the excise tax rate collected on oil and oil products and will not affect retail prices.

The aim of the law is to create awareness among consumers and business operators of the costs incurred from greenhouse gas emissions and change their behaviour to reduce carbon dioxide emissions to support sustainable national development.

The cabinet would have to approve a future increase in the carbon price above Baht 200 per ton of carbon equivalent, as it will affect the excise tax rate of oil and oil products.

The press release from the Ministry of Finance on the approval of the carbon tax is here