As the global market increasingly demands environmentally friendly products, Deputy Finance Minister Paopoom Rojanasakul has emphasized the urgent need for Thailand to transition towards green production. Without this shift, Thailand risks falling behind in the competitive international trade landscape.
Currently, only 7.6% of Thailand’s exports are classified as environmentally friendly, a stark contrast to developed countries such as Germany (15.4%), Japan (15%), China (10.4%), and South Korea (10.2%). Additionally, clean energy accounts for just 14% of Thailand’s total energy use, compared to Vietnam’s 19%.
To address this gap and support the transition to greener production, the Export-Import Bank of Thailand (Exim Bank) has introduced the country’s first green certificate of deposit (CD) project, valued at 5 billion baht. This initiative aims to provide loans to small and medium-sized enterprises (SMEs) investing in sustainable production processes.
“Amid intensifying climate change and extreme weather, governments worldwide have implemented roughly 18,000 stringent environmental trade measures, with an average annual increase of 16% from 2013 to 2022,” said Mr. Paopoom. “These measures are particularly prevalent in Thailand’s key export markets, including the US, the EU, Japan, China, and India, which collectively accounted for 51% of Thailand’s total export value in 2023.”
Despite these global shifts, Thai exports of environmentally friendly goods remain low. Mr. Paopoom stressed the importance of Thai exporters adapting swiftly to these changes to maintain their competitiveness in global markets.
Financial institutions play a crucial role in this transition by providing entrepreneurs with the necessary resources to meet the growing global demand for climate finance. Current global climate finance averages $1.3 trillion per year, which is significantly lower than the estimated demand of $8.6 trillion per year required to keep global temperature increases below 1.5°C.
Rak Vorrakitpokatorn, president of Exim Bank, stated that the cost of raising funds through green CDs is set at 2.15% for a three-month deposit and 2.2% for a six-month deposit. The bank will lend to SMEs at a ceiling rate of 5%, which is about 3-4% lower than usual, making it more affordable for businesses to invest in sustainable practices.
#ITCNewsUpdates #BreakingNews #GreenEconomy #SustainableTrade #ClimateFinance #GlobalTrade #MarketTrends
