Global campaigns to cut carbon dioxide emissions not only alert businesses to new non-tariff barriers imposed as part of efforts to fight global warming, they can also lead to new opportunities in the clean energy sector.
As the European Union (EU) gears up for the first phase of the Carbon Border Adjustment Mechanism (CBAM) later this year, many businesses have announced plans aiming to benefit from the shift from fossil fuels to renewable energy.
CBAM, which imposes charges on manufacturers that fail to adopt technology that benefits the climate, can affect Thai exporters in certain industries if they are too slow to make production more environmentally friendly.
On the other hand, if entrepreneurs view growing concerns over climate change as an opportunity to better protect the environment and seek new revenue sources by offering solutions to carbon dioxide-emitting businesses, they can achieve sustainability.
CBAM IN ACTION
CBAM is scheduled to take effect starting with a transitional phase from Oct 1, according to an EU press release issued in December last year.
During this period, importers of goods are required to report greenhouse gas emissions embedded in their imports, without making any financial payments or adjustments.
CBAM initially covers the import of certain goods and selected precursors to the EU, including cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. These products may derive from carbon-intensive manufacturing.
"This is a central part of our European Green Deal, preventing the risk of carbon leakage," said EU president Ursula von der Leyen.
"It is a huge step forward as we raise our climate ambitions."
Carbon leakage occurs when EU-based companies move carbon-intensive production abroad to countries where less stringent climate policies are enforced than those in the EU, or when EU products are replaced by more carbon-intensive imports.
EU leaders plan to discuss later when CBAM will fully come into force.
In 2016, Thailand emitted 372 million tonnes of greenhouse gases, more than half of which came from electricity generation and transport, according to Kiatchai Maitriwon, executive director of the Thailand Greenhouse Gas Management Organization.
BCG AS A SOLUTION
The government's promoted bio-, circular and green (BCG) economic development model not only offers a solution to CBAM restrictions, it can also offer entrepreneurs bright business prospects, promising value-added innovations and new sources of revenue.
These non-tariff barriers can be considered a new business opportunity if the country seriously supports renewable energy development and BCG, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.
Under BCG, which was declared a national agenda item by the Prayut Chan-o-cha administration, manufacturers develop techniques that add value to their products and have little or no impact on the environment.
Mr Kriengkrai earlier described BCG as a "game changer" that will shape a new future for Thai businesses.
Thailand has promoted many projects that share similar goals to BCG, but manufacturers tended to produce low-priced, commodity-grade products for export, he said.
With this iteration of BCG, Mr Kriengkrai believes it will produce more value-added items in various categories, including those that require modern biotechnology.
Aware of the need to further develop BCG-based businesses, SET-listed Energy Absolute (EA), a renewable energy and electric vehicle (EV) developer and operator, joined hands with the National Science and Technology Development Agency (NSTDA) to set up a research centre for BCG industry development.
Sompote Ahunai, chief executive of EA, said the cooperation with NSTDA researchers aims to support three key industries: EVs, batteries and EV infrastructure; biochemical products; and medical and healthcare products.
This venture can lead to concrete outcomes and "unity" in jointly developing new products with the company and NSTDA, said Sukit Limpijumnong, president of the agency.
"We will exchange experience as well as academic and industrial data in order to create national product champions," said Prof Sukit.
Anek Laothamatas, the higher education, science, research and innovation minister, is hopeful about significant progress in BCG as private firms have clearly indicated they want to pursue eco-friendly economic development.
Working with EA will ensure that research outcomes, which usually end in the technology demonstration stage, will be commercialised, said Mr Anek.
ELECTRIC AGE
EVs play a central role in plans to reduce carbon dioxide emissions in the transport sector, drawing both automakers and energy entrepreneurs to invest in what they perceive as the future of car manufacturing.
EA is one of those companies spending a huge amount to develop businesses related to EV assembly, sales and battery production.
The company is also expanding into rail transport by cooperating with China-based train manufacturer CRRC Dalian, as part of the Transport Ministry's plan to promote electric trains.
The trial run of an electric locomotive, delivered by CRRC Dalian, was satisfactory, said Amorn Sapthaweekul, deputy chief executive of EA.
Named "MINE Locomotive", the vehicle, powered by a 4.1 megawatt-hour battery, can operate for a distance of 300 kilometres and saves 40% of energy costs compared with a diesel locomotive, according to EA.
It takes one hour to charge the battery, said the company.
"The electric locomotive produces no pollution, including when it enters a passenger terminal," said Mr Amorn, referring to a test at Bang Sue Grand Station in Bangkok.
EA also assembles electric buses, makes batteries and operates a fleet of electric boats along a section of the Chao Phraya River between the capital and Nonthaburi.
The company believes an environmentally friendly approach can help ensure EA's sustainability, he said.
RISE OF BIOMASS
Using biomass as a fuel for power generation and manufacturing has gained popularity in efforts to cut dependence on fossil fuels.
Asia Biomass Plc (ABM), a local biomass fuel provider for factories, is among the companies registering a benefit from higher usage of this renewable energy.
Tiyada Mekpongsatorn, managing director of ABM, said the company last year increased annual production of biomass fuel to 1 million tonnes, up from 400,000 tonnes, to serve growing demand.
The fuel, made from agricultural refuse, is turned into wood pellets.
She said small and medium-sized enterprises are preparing to replace fossil fuels used in the boiling process with cleaner fuels, including biomass, to avoid negative impacts from CBAM rules.
Last year, ABM signed a memorandum of understanding with AT Energy Solution Co to supply wood pellets to the latter's clients.
Clover Power Plc, a renewable power plant operator and constructor, also reports positive prospects based on wood pellet sales.
The company said earlier it expects revenue to soar by 50% this year after diversifying into supplying renewable fuels, especially wood pellets, which are in high demand in Japan.
Saithsiri Saksitthisereekul, chief executive of Clover Power, attributed the growth to the price of wood pellets, which increased by 30% at the end of last year, driven by demand for this type of biomass from power generation businesses in Japan.
The wood pellet market in Japan is expanding significantly, according to Kasikorn Research Center.
Demand for wood pellets in Japan was previously expected to increase to more than 5 million tonnes in 2022 from 1.2 million tonnes in 2019. Japan produced only 126,000 tonnes last year, leading it to import 4.9 million tonnes, said Kasikorn Research.
