Global Warming Act: New Law Businesses Need to Know
How should businesses adapt to the new environmental law?
Climate change is becoming a significant pressure on the business sector, not only from the government but also from customers, investors, and trade partners. Recently, the Thai government has been pushing for the “Draft Climate Change Act”, also known as the Global Warming Act. It is currently undergoing revisions before being submitted to the Cabinet (ครม.) for consideration and approval in principle. It will then be sent to the Office of the Council of State for review before being presented to Parliament, where it is expected to come into force by 2027.
Why is this law important for businesses?
This draft law is part of Thailand's efforts to reduce greenhouse gas emissions in line with its commitments under the Paris Agreement, where Thailand pledged to achieve Carbon Neutrality by 2050 and Net Zero by 2065. If businesses do not adapt, they may face increased costs from carbon taxes, fines, or trade restrictions, especially the EU's CBAM measure, which may limit products with high greenhouse gas emissions from entering international markets.
Key aspects of the law businesses need to know
The Draft Climate Change Act (2nd public hearing version) consists of 202 sections across 14 chapters, focusing on key aspects relevant to the business sector, which Carbonwize has summarized as follows:
Chapter 4: Climate Fund
To support businesses that reduce greenhouse gas emissions, the government has established a "Climate Fund", which uses money from fines and other revenues to provide financial support to businesses undertaking environmental initiatives. The benefits available to businesses include:
- Tax incentives for businesses investing in green technologies.
- Low-interest loans for greenhouse gas reduction projects.
- Grants and subsidies for the use of clean energy.
Chapter 6: Greenhouse Gas Data
Businesses in the following sectors must submit greenhouse gas emission reports to the government:
- Energy (e.g., power plants, oil refineries)
- Transportation (e.g., logistics, airlines)
- Heavy industry (e.g., steel, cement, chemicals)
- Agriculture (e.g., livestock, large-scale cultivation)
- Waste management (e.g., recycling plants, waste disposal facilities)
The reported data must be verified and certified for accuracy. Providing false information may lead to legal penalties.
Chapter 8: Emission Trading Scheme (ETS)
The government will set "greenhouse gas emission quotas" for each industry. If emissions exceed the quota, businesses must purchase emission allowances from other organizations. If a business can reduce emissions below its quota, it may sell the remaining quota to other companies, which presents an opportunity to reduce environmental costs and generate business revenue.
Chapter 10: Carbon Tax
Businesses that produce goods or use energy with high greenhouse gas emissions must pay taxes at a specified rate.
- Examples of products that may be subject to carbon tax include oil, coal, cement, and plastics.
- Using green technologies or clean energy can help reduce the tax burden.
Chapter 11: Carbon Credit
Businesses that cannot directly reduce greenhouse gas emissions can purchase domestic carbon credits to offset them. However, purchasing from abroad requires prior permission. Nevertheless, a more sustainable approach is to improve production processes, use clean energy, and adopt green innovations, which helps businesses compete in the long term and align with international environmental policies.
Chapter 14: Penalties for businesses neglecting environmental measures
If businesses neglect the requirements of the Global Warming Act, they may face strict penalties:
- Concealing or providing false information – Fine up to 5 million baht or three times the benefits received.
- Exceeding greenhouse gas emission quotas – Fine three times the price of emission allowances.
- Failure to pay carbon tax – Fine up to 5 million baht or three times the benefits.
- Neglecting carbon tax payment – Imprisonment up to 3 years, fine not exceeding 400,000 baht.
- Failure to register carbon credits – Fine of 10,000–100,000 baht and a daily fine up to 1,000 baht.
How should business owners prepare?
1. Start environmental planning immediately – Continuously measure your organizational carbon footprint and set emission reduction targets.
2. Utilize fund benefits – If your business plans to invest in green technologies, you should study the tax incentives and subsidies available.
3. Manage carbon tax risks – If your business uses high-carbon energy, consider clean energy alternatives to reduce the tax burden.
4. Develop an organizational sustainability plan – This is not just about legal compliance, but an opportunity to build a positive image and enhance competitiveness.
Carbonwize understands the complexity of data and the cost burden entrepreneurs face in preparing organizational greenhouse gas reports, including consulting fees, verification costs for carbon footprint data, and reporting processes. For this reason, we have developed a platform that helps reduce costs, save time, and increase the convenience of preparing and disclosing carbon data. If your business needs an efficient solution, Carbonwize is ready to assist.
📧 Contact our team for consultation: Contact Us
Sources: Thai Climate Justice for All, Parliament of Thailand, Law.go.th
