Thailand is advancing the development of its carbon credit market after securing a $200 million loan from the World Bank through the Low Carbon Cities and Carbon Market Development Project (LCC). The project aims to develop low-carbon cities and the carbon market.
The Stock Exchange of Thailand (SET) supports the trading mechanism via an auction system that connects buyers and sellers, while Krungthai Bank collects carbon credits to enter the market.
The goal is to use capital market mechanisms to incentivize businesses to invest in clean energy, reduce energy costs, and create economic opportunities by lowering greenhouse gas emissions.
The Thai government is expanding cooperation on green economy initiatives at the IMF–World Bank Annual Meetings 2026, focusing on promoting clean energy investments and developing low-carbon cities. It also aims to assist SMEs, workers, farmers, and communities to adapt comprehensively to the transition toward an environmentally friendly economy.
On 17 October 2026, several cooperation plans and memorandums of understanding were presented and signed to advance investment projects and develop financial tools supporting Thailand's environmental transition.
The LCC project has been approved by the World Bank with a $200 million loan provided through the Export–Import Bank of Thailand (EXIM BANK), backed by a guarantee from the Ministry of Finance.
This supports investment in renewable energy and energy efficiency improvements in government buildings and industrial zones, with pilot areas including Bangkok and the Industrial Estate Authority of Thailand.
A key mechanism of the project involves Energy Service Companies (ESCOs) investing and implementing energy system upgrades, such as installing rooftop solar panels and improving electrical systems.
Meanwhile, government agencies make long-term service payments, reducing initial investment barriers and allowing the private sector to play a greater role in developing clean energy infrastructure.
The World Bank estimates that this project can support renewable energy capacity of up to 180 megawatts and save approximately 448 million kilowatt-hours of electricity annually, roughly equivalent to the yearly electricity consumption of about 100,000 households in Bangkok and its metropolitan area.
Additionally, the project aims to create cumulative employment equivalent to at least 1,800 full-time jobs during implementation, covering installation, maintenance, energy services, and carbon data monitoring and verification.
Another vital component of the LCC project is developing the carbon credit market as a revenue channel from greenhouse gas emission reductions. Krungthai Bank will collect eligible carbon credits from various projects and link them to the market.
The SET will support a transparent auction process enabling buyers and sellers to transact under verifiable mechanisms. This approach aims to convert clean energy investments into additional economic value.
Besides reducing electricity costs and fossil fuel dependence, the verified greenhouse gas reductions can be developed into carbon credits for sale to organizations seeking to offset their emissions.
Several private companies, including Thai Airways, Grab, ACEIS Electric and Power, and DriverAI, have shown interest in becoming future carbon credit buyers, reflecting opportunities to expand demand from the private sector as part of their greenhouse gas management strategies.
The push for the carbon credit market is not only to increase trading channels but also to build a financial system supporting the transition to a low-carbon economy.
The World Bank’s funding will enable clean energy projects to become viable, while carbon credit revenues offer additional incentives for investors to continue greenhouse gas reduction efforts.
From a capital market perspective, developing a transparent and standardized carbon credit trading system is crucial infrastructure to build confidence among buyers, sellers, and investors, and to provide clean energy and environmental service businesses access to new revenue sources.
However, the market’s success depends on the availability of quality carbon credits, actual demand, trading rules, and credible verification of emissions reductions.
SET’s support for the auction system marks a further step in developing Thailand’s carbon market infrastructure, with Krungthai Bank as a credit aggregator and LCC project funding driving clean energy investments.
If quality supply and demand, along with transparent pricing systems, are established, the carbon credit market could become a supplementary mechanism for fundraising and incentivizing businesses to reduce emissions long term.
Source: World Bank//,Office of the Prime Minister
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