8.30 - 16.30 SAMYAN MITRTOWN HALL (5th Fl.) 29thFebruary 2024
Opening Speech Together, we build a GREENER FUTURE
Thailand’s Binding Climate Commitment Supply and Demand in Thailand (Carbon Credit & RECs Issuance) 2030 Unconditional NDC Target Formulation of target in NDC Reduce GHG emissions by 30% from projected BAU level (555 MtCO2e) by 2030 Absolute emissions level in 2030 389 MtCO2e 2030 Conditional NDC Target Formulation of target in NDC Reduce GHG emissions by 40% from projected BAU level (555 MtCO2e) by 2030 subject to adequate support Absolute emissions level in 2030 333 MtCO2e To date, Thailand has issued 17 million tonne carbon credits and 19 million megawatt hours of I-RECs, equaling 9.5 million tonne carbon (as 2 megawatt hours is equivalent to 1 tonne carbon) Thailand’s 2030 Unconditional Target Gap: T-VERs Issued: I-RECs Issued: Reductions from Credits/RECs: Thailand’s 2030 Conditional Target Gap: Thailand’s Emissions: 372M tCO2e per year Energy Sector: 70% Renewable Energy Portion: 10% To achieve Carbon Neutrality RE Portion must be 30% by 2030 and >50% before 2040 Number of Companies Expected to be included in Thailand’s ETS: 800 600 500 400 300 GHG Emission (MtC O2e) 200 100 2C Pathway (MtCO2e) 1.5C Pathway (MtCO2e) NDC (MtCO2e) Historical Emission (MtCO2e) Business As Usual (MtCO2e) For Thailand to Meet Binding Commitments, it has to reduce 166-222M tCO2e (to achieve 389-333M tCO2e) 166 million tonne carbon 17 million tonne carbon 19 million megawatt hours (9.5 million tonne carbon) 26.5 million tonne carbon 222 million tonne carbon Source: Carbonmarket.tgo, I-REC Statistic December 2023 Source: Climate Act Draft, National Energy Plan BAU-NDC 166 MtCO2e BAU-2C Pathway 260 MtCO2e BAU-1.5C Pathway 342 MtCO2e Source: Climate Action Tracker, UNFCCC, The Fourth National Communication
Internationally Accepted Efficiency Transparency & Traceability Price Support the market for renewable energy Claiming in scope 2 1 2 3 4 5 6 If an organization wants to achieve the RE100 goal (a group of companies that have gathered together and expressed an intention to use 100% renewable energy to conduct business), the organization should consider buying RECs Renewable energy and energy transition is important for companies to achieve Climate Targets and important for Foreign Direct Investment (FDI) Objective of I-RECs: Support energy transition by providing additional revenue to renewable energy generators to expand renewable capacity along the grid. Why I-REC?
Scope 2 Scope 3 Decarbonization Journey Carbon Footprint (for Organization & Product) Carbon Offsets Climate Innovation Scope 1 Consulting & Advisory Target Setting Green Finance Support Internationally Recognized V/VB Partners Renewable Energy Certificates (RECs) Policy Improvement MICE Events Support Forestry MRV Sustainable Agriculture Agro Plantation Energy Efficiency Electric Vehicles Green Hydrogen Climate Project International Renewable Energy Certificates (RECs) Carbon Offsets Renewable Energy Certificates (RECs) International Renewable Energy Certificates (RECs) Policy Improvement MICE Events Support Carbon Offsets Climate Innovation Complete End-to-End Climate Solution
Question How role does I-RECs play in supporting the country and companies to meet climate targets? How does I-RECs fit into the legal landscape of Thailand e.g. Climate Act, Carbon Tax and etc? How is the Stock Exchange and other parties supporting companies? How are I-RECs traded? OTC, Platform or Exchanges? Once I-RECs is purchased and offset, how to correctly disclose based on different disclosure programs such as SBTi, GRI, TCFD. IFRS, CDP and etc? Why are different I-RECs technologies more expensive or in higher demand? What countries are accepting of the I-RECs standard? How does RE portion affect the competitiveness of Thailand? How are financial institutions involved in this market and what are the key innovations? How do I register I-RECs? Does IRECs expire? Why are there vintages? Can I purchase older vintages? Can I purchase cross border? What is the market outlook and trends for I-RECs? Frequently Asked
Together, We Build a Greener Future [email protected] (+66) 2 665 6705 2445/19 Tararom Business Tower 14th Floor, New Petchaburi Rd, Bang Kapi, Huai Khwang, Bangkok 10310
THAILAND'S TRAJECTORY TOWARDS NET ZERO
Unlocking Potential: I-RECs in Thailand 2024 01 National plans 02 Technology roadmap Carbon market policies in tackling climate change 03
1.5⁰C 2⁰C 3⁰C 4⁰C Source: IPCC Special Report on 1.5°C Unlocking Potential: I-RECs in Thailand 2024
Unlocking Potential: I-RECs in Thailand 2024 25.10% 12.09% 7.02% 3.93% 3.93% 37.61 GtCO2eq 5.78 GtCO2eq 3.06 GtCO2eq 1.79 GtCO2eq 1.63 GtCO2eq 69.96% 4.53% 10.28% 15.23% 0.93%
Unlocking Potential: I-RECs in Thailand 2024 II. Greenhouse gas reduction "Accelerating a just energy transition Increase tripling renewable energy capacity globally and doubling energy efficiency the global average by 2030. Reduce the use of fossil fuels and stop using coal.” III. Adapting to climate change “Create global adaptation targets in 7 sectors and every country must have a comprehensive climate warning system and information service by 2027" I. Review of the global situation and operations “It reflects the need to raise the level of action both within and between countries” IV. Climate finance “Accelerate tracking of progress in support of developed countries according to the USD 100 billion target/years until 2025 VI. A just transition “Taking into account the fair transition of developing countries, especially from fossil fuel to green energy" VII. Technology “Promote access to technology to reduce greenhouse gases" V. Loss and damage “Fund support: 792 million dollars operation will begin in 2024” VIII. Other related issues “Public health Health crisis = Climate crisis Agriculture and food Endorse the declaration on agriculture with immunity and food Security Capacity building covers all sectors “Promote equal participation ready to adapt to climate change"
Emission 120 MtCO₂eq Low CH₄ paddy fields Domestic Implementation 33.2% Inter. Support 6.8% Art. 6 of PA 3 % Energy & Transport IPPU Waste Agriculture Forest 2040 2045 2055 2060 Net Zero Electric Vehicle CCUS/BECCS technology Thailand’s Decarbonization Pathway Removal 120 MtCO₂eq Energy & Waste Agriculture Transport IPPU 2050 2065 2035 2030 NDC 1 Carbon Neutral 30-40% BAU NDC 2 NDC 3 NDC 4 Hydraulic cement Renewable energy Manure Management Hydrogen technology Reforestation Phase out coal A better, safer, healthier, greener, fairer and more prosperous future 2025 Peaking 388 MtCO₂eq 2021 NDC tracking 60.33 MtCO₂e Climate Change Act Blended Finance Data Center Public Awareness Market Mechanism Technology, R & D NDC Action Plan 2021 - 2030 Just Transition
Draft Climate Change Act CHAPTER 1 General CHAPTER 2 Climate change Targets CHAPTER 3 National Committee on Climate Change Policy CHAPTER 4 Climate Change Fund CHAPTER 5 Climate change master plan CHAPTER 6 Greenhouse gas data CHAPTER 9 Carbon tax system CHAPTER 10 Carbon credits CHAPTER 11 Climate change adaptation CHAPTER 12 Measures to promote operations CHAPTER 13 Standards of economic activity grouping CHAPTER 14 Punishment CHAPTER 7 Climate change mitigation CHAPTER 8 Emissions Trading Scheme system Transitory Provisions Unlocking Potential: I-RECs in Thailand 2024
Mandatory Corporate-based GHG reporting Emission Trading Scheme (ETS) Carbon Tax Crediting Mechanism (T-VER) Article 6 Thailand’s GHG emissions Tax Revenue Model 2030 Fee / levy Allowance revenue Financial support mitigation and adaptation measures Ministry of Finance Climate Fund เนื้อหาร่างกรอบกฎหมายใช้เพื่อเป็นเอกสารประกอบการประชุมในวันที่ ๖ กุมภาพันธ์ ๒๕๖๗ เท่านั้น
Crediting Mechanism Voluntary Mechanism Carbon Tax on Products Eligible carbon credits* *Carbon credits that can be used under the Thai-ETS must be aligned with rules and regulations under that Thai-ETS which may include: - standard - project type - vintage - volume - size Thailand Emission Trading Scheme (Thai-ETS) Exclusion of carbon tax for the activities included in the Thai ETS เนื้อหาร่างกรอบกฎหมายใช้เพื่อเป็นเอกสารประกอบการประชุมในวันที่ ๖ กุมภาพันธ์ ๒๕๖๗ เท่านั้น
EGAT is the I-REC issuer for Thailand EGAT certifies renewable energy production in Thailand, delivering value for generators and proof of claims for consumers. What is an I-REC? I-REC or the International Renewable Energy Certificate, is a tradable green value that is verified and certified qualities according to the I-REC Standard providing a strong energy attribution. RECs aims to encourage new renewable energy investors and to promote demand of renewable energy usage. Carbon offsets are measured in the unit of CO2 equivalent with representative of using greenhouse gas emission reduction in one place to offset emissions from activities in another place. What is the difference between Renewable Energy Certificates (RECs) and Carbon Offsets?
Unlocking Potential: I-RECs in Thailand 2024 Utility Green Tariff (UGT) is set to bring about a significant progression in renewable energy use within Thailand, bolstering local businesses and attracting foreign investment. This move has been eagerly awaited by numerous companies considering expansion into Thailand, as they seek not only the necessary infrastructure but also a source of clean energy to support their carbon reduction strategies. Factories in Thai industrial estates require a total of 10GW of renewable power, based on a recent survey of nearly 5,000 factories. This clean energy demand is fuelled by the need to avoid a non-tariff barrier if they export products to EU countries, which began enforcing the Carbon Border Adjustment Mechanism (CBAM) on October 1 last year. Source: the Energy Regulatory Commission (ERC).
ake action together to achieve NDC 1 Implement NDC Action Plan Tracking Progress Monitoring & Evaluation Ambitious, clearly and continuously Submit every 5 years Align with the global policy direction Unlocking Potential: I-RECs in Thailand 2024 Climate legislation framework Main driving forces and governance Climate Change Act National target & pathway Institutional arrangements Mechanisms transparency & accountability Develop Tools & Mechanism Supportive actions for a change initiative Incentives Carbon tax Taxonomy Bond Carbon pricing Emission Trading Scheme Technology transfer Ex. Arthit CCS Pilot project , LC₃ in cement clinker Support Stakeholders Subsequence NDC Emission reduction Financial flow Gaps & Needs NDC 2 (Submit 2025) Implementing period: 2031 – 2035 Big Data, Synergy & Linkage Policies to actions National to local level
Department of Climate Change and Environment Ministry of Natural Resources and Environment Unlocking Potential: I-RECs in Thailand 2024 02 278 8400 http://www.dcce.go.th [email protected] 49 Rama VI Rd. Soi 30, Phaya Thai, Phaya Thai, Bangkok 10400
Global Trends in REC Markets
Roble P. Velasco-Rosenheim Director, Global Partnerships & APAC Global Trends in REC Markets 29 Feb.2024
Two Topics for Today ➢ REC Mechanics: What and How ➢ Deep Dive on Use Cases: Conventional Growth and the New Paradigm
REC Mechanics: What and How Part 1:
A renewable energy certificate (REC) tells us where our electricity comes from.
RECs tell us where our electricity comes from.
A REC tells us facts, or “attributes”: o 1 MWh of power was generated by a renewable source. o When, where, and who generated this MWh. o This information has been confirmed by a trusted source or “standard”. o Someone owns these “green attributes” and can transfer or claim ownership. Other names: Guarantee of Origin (GO), energy attribute certificate (EAC)
Transaction Structures
Structure Description Unbundled • Certificate only, separate from power. Bundled • Electricity + certificate, sold together and RECs used to track: • PPA (physical and virtual) • Self-consumed/on-site generation(rooftop) • Utility Green Tariff
and Carbon Instruments Differences between RECs
Topic REC Carbon Credit Unit of Measure • MWh • Tons of CO2 (e) How it’s measured • Meter readings • Ex-Post (fact-based) • Calculation methodologies • Ex-Ante (assumption-based) What it’s used for • Scope 2 (emissions from electricity consumption) • Scope 1 and 3 (everything else: direct emissions and downstream supplies)
Use Cases Conventional Growth and the New Paradigm Part 2 :
• (a) Voluntary Reporting • (b) The New Compliance Paradigm
Primary Structures o Voluntary: o Companies choose to go green. o They use REC to prove it, in line with global reporting frameworks. o New paradigm: supply chains demand drivers o Compliance: o Companies are required to purchase renewables. o Typical compliance: RPS/RPOs (utility mandates). o New paradigm: Financial disclosure and carbon border taxes
Disclosure Platforms Key Actors
Key Actors
Key Actors (Voluntary)
o Guidance on accounting and decarbonizing o Established by GHGP, reported through CDP o Ambition Frameworks (Focused on Brands) o Campaigns have different objectives/approaches o Requirements substantiated through RECs o Location/vintage/fuel o Brand action is moving into supply chains o More on that in just a bit… Voluntary Reporting
Voluntary Entities 8,000…13,000+ companies reporting worldwide (2% of companies worldwide, worth $12 trillion report through CDP) to procure & claim 263…400+ companies promise 100% renewable 992… 2,500…4,000+ companies taking action
Market Size and Growth
EU Markets US Markets
This tells us… ✓ EU market is the largest (800TWh), followed by US (500TWh). • Both about doubled since 2014
Global Markets (Non-EU/US)
This tells us… ✓ EU markets are the largest (800), followed by the US (500). • Both have about doubled since 2014 ✓ International markets are growing faster and will take over. • Issuance has doubled each year since 2014
Global Markets (Non-EU/US) APAC Markets
This tells us… ✓ EU markets are the largest (800), followed by the US (500). • Both have about doubled since 2014 ✓ International markets are growing faster and will take over. • Issuance has about doubled each year since 2014 ✓ APAC accounts for half of issuance and consumption. • Issuance has about doubled each year since 2014, with a 4x issuance spike in 2021
Big brands drive markets.