Bangkok: The Trade Policy and Strategy Office (TPSO) has issued a warning to Thai businesses about the European Union's Carbon Border Adjustment Mechanism (CBAM), which will be fully implemented on January 1, 2026. The office emphasizes the need for Thai exporters, particularly those dealing with high-carbon industrial goods, to adapt swiftly to avoid increased costs and pressure from global supply chains.
According to Thai News Agency, TPSO's Director, Mr. Nantapong Chiraleartpong, highlighted that the CBAM may impact the export of certain Thai products, especially those with high greenhouse gas emissions, unless producers can adjust their production processes and manage their carbon footprints effectively. CBAM, a pivotal mechanism under the EU's European Green Deal, aims to prevent carbon leakage and ensure fair competition between EU-produced goods and imports from non-EU countries. It targets six main product groups with high carbon emissions: iron and steel, aluminum, cement, fertilizers, electricity, and hydrogen.
The TPSO director mentioned that despite CBAM's promotion of green trade, Thai entrepreneurs, particularly small and medium-sized enterprises (SMEs), might encounter increased costs and difficulties accessing relevant technologies or carbon emission information systems during the transition period. Concurrently, EU importers are increasingly prioritizing transparent, verifiable, and low-carbon carbon footprint data, urging the Thai private sector to adapt swiftly.
For the next phase, TPSO recommends a step-by-step approach for the private sector, focusing on four key strategies:
1. Develop a greenhouse gas emission measurement, reporting, and monitoring (MRV) system covering Scope 1-3 in line with international standards.
2. Invest in low-carbon technologies and processes, such as renewable energy and improved energy efficiency.
3. Implement green procurement practices by selecting raw materials evaluated for carbon impact.
4. Develop an organizational carbon accounting system and utilize reliable carbon credit mechanisms, like Thailand's T-VER, to reduce costs and enhance competitiveness.
In 2025, Thailand's exports to the EU under CBAM measures amounted to US$447.51 million, a 54.71% increase from the previous year. This growth elevated Thailand's market share in the EU to 0.42%, up from 0.29% in 2024. The primary exports were iron and steel, valued at US$307.46 million, and aluminum, valued at US$56.47 million. The export values for cement, fertilizer, electricity, and hydrogen were minimal or non-existent.
Globally, CBAM-related exports from Thailand totaled US$7,151.44 million, representing 2.54% of the total export value. The EU ranked as the 7th largest market for Thai CBAM products, making up 5.09% of this category and 0.13% of Thailand's total exports.
The Director of TPSO noted that while CBAM measures may pose short-term challenges, a systematic adaptation by the Thai private sector could enhance its competitiveness in the global market transitioning towards a low-carbon economy, offering opportunities for long-term sustainability in Thai industries.