

The Bank of Thailand (BOT) and Thailand’s Securities and Exchange Commission (SEC) have published the first phase of the Thai green finance taxonomy, together with sustainable finance think-tank the Climate Bonds Initiative (CBI).
Work on a transition-focused taxonomy began two years ago, focusing on “industries that lag behind in the transition, especially those that emit large amounts of greenhouse gas”, culminating in the release of a draft framework earlier this year.
The taxonomy final report and criteria was billed as having been “prepared” by CBI, making it the second regional Asian taxonomy to involve the think-tank in recent weeks. CBI was previously commissioned to develop Hong Kong’s prototype taxonomy, released in May.
CBI has been approached for comment on the details of the project and of any related contracts signed with the Thai government.
The taxonomy is closer in structure to the EU’s taxonomy than the principles-based frameworks used by regional peers such as Malaysia. Eligible activities must meet quantitative thresholds, together with social safeguards and a requirement that taxonomy-aligned activities do not significantly harm other environmental objectives – known as Do No Significant Harm (DNSH).
The first phase of the taxonomy addresses the climate change mitigation objective, and covers the energy and transportation sectors. Broad DNSH criteria for five other climate and non-climate objectives – also mirroring the EU taxonomy – have been put forward.
The taxonomy incorporates an “amber” designation for transitional activities, and is designed to be compatible with the ASEAN taxonomy’s traffic light system. Transitional activities must comply with a declining emissions threshold until a 2040 sunset date, beyond which they will no longer be considered eligible.
It will be entirely voluntary for now and can be used to label green debt, or to facilitate corporate or fund disclosures. Neither BOT or the SEC have identified any forthcoming rule-making initiatives based on the framework.
The taxonomy was developed by a national-level Taxonomy Board, which included energy and natural resource-focused government departments, the BOT and SEC, and a combination of local trade groups. The board has been approached for comment.
Screening criteria and sector coverage
The finalised framework retained much of the key provisions of the earlier draft – particularly the EU-aligned overall emissions threshold of 100g CO2e/kWh, which effectively excludes most fossil-generated power including natural gas. Thailand does not currently use nuclear energy and the power source was not referenced by regulators in the taxonomy documents.
Producers of gas power – which makes up 60 percent of Thailand’s energy mix – will be able to raise taxonomy-aligned financing to retrofit power plants for green hydrogen use.
The taxonomy does not consider coal phase-outs, or financing the early retirement of coal assets, as a taxonomy-aligned activity in contrast with regional trends. Both the Singapore and ASEAN taxonomy have classed this activity as green under their respective frameworks to date.
Aviation is also not covered under the taxonomy due to the small size of emissions originating from local and domestic air travel, while hybrid cars are excluded to ensure no “locking in of suboptimal technologies when better zero-emission technologies are available”.
The Taxonomy Board has not provided a timeline regarding the future development of the taxonomy criteria.
Local market stakeholders have called for the issuance of a taxonomy for polluting activities – known alternatively as a “red” or “brown” taxonomy – and for sectors such as manufacturing and agriculture to be prioritised in the next stage of development.