Thailand is preparing to implement a carbon tax in 2025, beginning with oil products. The tax rate is set at 200 baht per metric ton of carbon dioxide (approximately $5.50 per metric ton). This carbon tax will be incorporated into the existing excise tax structure. Meaning, it will be added to the price of fuels such as diesel and gasoline. For example, diesel - which emits 0.0026 tons of carbon dioxide per liter - will incur an additional carbon tax of 0.46 baht per liter.
Impact of the Carbon Tax on Office Buildings in Thailand
To illustrate how this carbon tax might affect office buildings in Thailand, let's consider the following example:
1. Energy Consumption Calculation: Estimate the building’s annual energy consumption in kilowatt-hours (kWh). In this case, assume the office building consumes 500,000 kWh annually.
2. Carbon Emission Estimation: Use the emission factor for electricity in Thailand, with the average emission factor being around 0.519 kg CO₂ per kWh (this value should be checked and updated regularly).
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Annual Emissions (kg CO₂) = Annual Energy Consumption (kWh) × Emission Factor (kg CO₂/kWh)
- Annual Emissions = 500,000 kWh × 0.519 kg CO₂/kWh = 259,500 kg CO₂
- Annual Emissions (metric tons) = 259,500 kg CO₂ / 1,000 = 259.5 metric tons CO₂
3. Carbon Tax Calculation: Multiply the total carbon emissions by the carbon tax rate.
- Carbon Tax = Annual Emissions (metric tons CO₂) × Carbon Tax Rate (THB/metric ton)
- Carbon Tax = 259.5 metric tons CO₂ × 200 THB/metric ton = 51,900 THB
Thus, the office building would incur an additional carbon tax of 51,900 THB annually based on its energy consumption and estimated carbon emissions.
Adapting and Developing for a Sustainable Future
The introduction of a carbon tax is part of an effort to encourage organizations to reduce their carbon emissions through energy-efficient practices and the adoption of environmentally friendly technologies.
Preparing and planning to reduce carbon emissions will not only help mitigate the additional costs from the carbon tax but also contribute to a global effort in preserving the environment and building a sustainable future for everyone.
The carbon tax that Thailand is set to introduce in 2025 will not only affect consumers by increasing fuel prices but will also have significant implications for businesses, including office building owners who will need to adapt to manage the rising costs associated with this tax.
Cushman & Wakefield, a global leader in real estate services, is highly experienced in providing sustainability consulting and management for businesses and real estate. We recognize the importance of adapting to reduce carbon emissions, which is part of our mission to create a sustainable future for our clients and the communities we serve.
If you are an office building owner or manager looking to prepare for this change, Cushman & Wakefield can offer expert advice and effective energy management strategies to help reduce carbon emissions and save costs associated with the upcoming carbon tax.
