Thailand’s Draft Climate Change Act Countries around the world have given significant attention to climate change legislation, with many national, regional, and global attempts to slow the momentum of climate change. The most notable of these multilateral efforts is the Paris Agreement, a legally binding international treaty on climate change currently adopted by 193 parties. Its goal is to limit the global average temperature to well below 2°C (preferably below 1.5°C) above preindustrial levels, and the treaty’s coordinated efforts to combat climate change are much more ambitious than previous global agreements and discussions. Article 4 of the Paris Agreement requires countries to provide “nationally determined contributions” (NDCs), consisting of their action plans for climate action. Thailand, as a party to the Paris Agreement, has put forth an NDC that pledges to achieve an unconditional greenhouse gas (GHG) emission reduction target of 20% from the business-as-usual projection for 2030, with the possibility of increasing that target to 25% subject to adequate and enhanced access to technology development and transfer, financial resources, and other support. To enable the accomplishment of this pledge, Thailand is looking to enact climate change legislation that functions as a key mechanism for domestic climate action. In 2018, the Office of Natural Resources and Environmental Policy and Planning (ONEP) under the Ministry of Natural Resources and Environment was assigned to prepare a draft Climate Change Act. The draft is now complete, and according to news reports it is set to be submitted to the cabinet for further consideration. The draft Climate Change Act lays out Thailand’s action plan for climate change mitigation and adaptation, including emissions reductions. Some of the key sections in the draft law involve citizen rights, the National Climate Change Policy Committee, and a national GHG database. Rights of Citizens The draft establishes the

Thailand’s Board of Investment (BOI) has extended its previously announced period for reduction of import duty on imported raw and essential materials for battery manufacturing for electric vehicles and other applications. The BOI’s announcement No. 5/2565 dated August 8, 2022, extended the reduction period to a maximum of five years. The BOI’s promoted activities list includes two battery-manufacturing business activities: Activity 4.8.3.1 – Battery manufacturing Activity 5.2.6.1 – High energy density battery manufacturing Qualifying battery manufacturers who have cell or module manufacturing processes are eligible for 90% import duty reductions on raw and essential materials that cannot be produced in Thailand. These reductions will be available on an annual basis, and are renewable for five years in total—up from the original two years. Existing projects (i.e., those which have the original two-year duration in their BOI certificate) can also benefit from the extension by preparing a project amendment form, along with a clarification letter and supporting documents, for submission to the BOI office. For more details on these customs duty reductions, or on any aspect of investment promotion in Thailand, please contact Charuwan Charoonchitsathian at [email protected] or +66 2056 5657, or Napassorn Lertussavavivat at [email protected] or +66 2056 5662.

On July 21, 2022, Vietnam’s Ministry of Industry and Trade (MOIT) submitted Report No. 126/BC-BCT to the Prime Minister regarding the mechanism for transitional wind and solar power projects. In this report, the MOIT proposed some recommendations to explicitly address difficulties for outstanding wind and solar power projects (“Transitional Projects”) which have been developed under the Prime Minister’s Decision No. 13/2020/QD-TTg dated April 6, 2020, on the development of solar power projects (Decision 13) and Decision No. 37/2011/QD-TTg dated June 29, 2011, on the development of wind power projects (Decision 37), as amended by Decision No. 39/2018/QD-TTg dated September 10, 2018 (Decision 39). The Transitional Projects primarily include those which have completed construction but have not yet been put into operation, and those which have been put into operation but for which the power price has not yet been decided, due to missing the deadline set forth under the aforementioned decisions to be eligible for the feed-in-tariff (FIT). In particular, the MOIT has proposed the following key recommendations to the Prime Minister: Mechanism for Transitional Projects The MOIT proposes two options: Option 1: Developers of the Transitional Projects negotiate and sign power purchase agreements (PPA) with Vietnam Electricity (EVN) within the price framework issued by the MOIT in accordance with the Law on Electricity, the Law on Prices, and their subordinate guiding legislation; or Option 2: The Prime Minister formulates a new decision specifying the mechanism for bidding on the purchase of power produced by the Transitional Projects, estimated to be implemented for the time limit of three years and within the price framework issued by the MOIT. Mechanism for future wind and solar power projects The MOIT proposes to apply the mechanism that developers of future wind and solar projects negotiate the power price and sign the PPA

The Ministry of Energy is preparing to open a bidding round for the right to explore and produce petroleum in three offshore exploration blocks in the Gulf of Thailand: Exploration Block Nos. G1/65, G2/65, and G3/65. Announced in April 2022 with an eye toward national energy sustainability and security, this is the first opportunity for exploration of new offshore areas in 15 years. The total area of the three exploration blocks is 35,164.01 square kilometers, and operations in the exploration blocks will be subject to the terms and conditions of the required production sharing contract (PSC). Under the PSC, the Thai government is entitled to receive royalty payments against profits, any applicable cost recovery, and profit petroleum. The government also has the authority to monitor the petroleum operations in collaboration with the successful bidder. On July 27, 2022, the Department of Mineral Fuels (DMF) held a conference for prospective investors in order to clarify general information regarding the petroleum bidding round. Currently, interested investors can request the right to enter the bidding-round data room located at the DMF by emailing [email protected] by September 2, 2022. To participate in the bidding round, interested investors must submit an application together with required documents to the DMF during the period of September 5–16, 2022. For further information on the bidding round, or on any aspect of energy law in Thailand, please contact Tilleke & Gibbins at [email protected] or +66 2056 5555.