Project title Sector SCP practice
AEMAS Utilities sector Product design for sustainability
Automotive SSCM Fabricated metals industry Sustainable Supply Chain Management
Efficient Air Conditioners / ASEAN SHINE Electrical equipment industry Eco-labels, Product design for sustainability
Lead Elimination Project Chemical sector Cleaner Production
Sustainable Freight and Logistics Sustainable Supply Chain Management
ZCR for Sustainable Tourism Service industry Product design for sustainability, Eco-labels

Focal point

Dr Wijarn Simachaya
Director General, Pollution Control Department
Ministry of Natural Resources and Environment


In Thailand, the SWITCH-Asia Programme policy support is implemented through a National Policy Support Component (NPSC). While this component has concluded in December 2014, in 2015 and 2016 the RPSC will potentially launch policy support in the country in forthcoming years as well. The NPSC has achieved a lot in terms of advancing eco-labeling (e.g. the Green Industry Mark), sustainable public procurement and increasing the awareness and action for SCP at the local government level, working with water efficiency in the tourism sector and other areas. A national SCP information portal was also launched with a variety of information on SCP in the country available here:

Status of SCP policy framework

For over four decades, countries in Asia and the Pacific have been rapidly transforming from biomass-based to minerals-based economies. The efficiency of resource use has major implications for their economic growth, poverty reduction and for the environment. Thailand is one of the top ten resource consuming countries in the region.

Thailand is one of the foremost development success stories in Asia, with decades of sustained growth and impressive poverty reduction. Since the mid-1980s, the average real per capita income has roughly tripled (UNDP, 2009). Yet, the financial crisis in the late 1990s and political instability in 2006 caused an economic slowdown, severely affecting several sectors of the economy. Thailand’s economic structure has undergone major changes in the past four decades. Thailand’s economy, once largely agricultural, has been transformed by the development of the industrial and services sectors. The services sector is currently the largest contributor to GDP, with a near constant share in the range of 45-50% in recent years (Tangkitvanich and Onodera, 2008). Annual tourist arrivals had increased to over 14 million by 2007, and the tourism industry contributes around seven per cent of GDP (UNDP, 2009). Industrial growth was initially driven by labour intensive manufacturing activities such as textiles and clothing. However, more recently it has increasingly been supported by capital intensive industries such as automobiles, electronics and chemicals. Thailand’s export sector has played an important part in driving economic growth over the past three decades.

The country has also achieved most of its Millennium Development Goals, nearly all of them well ahead of deadline (UNDP, 2009). The incidence of poverty has fallen from 42% in 1988 to 8.5% in 2007. However, the benefits of Thailand’s success have not been shared equally by all and there are still over five million people living below the poverty line (UNDP, 2009). Some regions, particularly in the rural south and northeast, are lagging behind the rest of the country. A high proportion of the workforce is in informal employment, mostly working in the agriculture, transport, trade and construction sectors (UNDP, 2009). 

Growth in industrialization, urbanization and intensified agricultural production has relied extensively on the country’s natural resources. For instance, forest cover fell dramatically from 53 per cent in 1961 to 25 per cent in 1998. In the fisheries sector, over-harvesting of marine fisheries has reduced fishing yields by 90 per cent. Rapid industrial expansion and population growth have also degraded land and water quality, caused the loss of natural habitats, and generated increasing levels of air and water pollution (WB, 2011c). 

Economic and Social Development Plans

The National Economic and Social Development Plan (NESDP) is Thailand’s strategic framework for addressing its medium term development challenges. NESDPs are developed, implemented and evaluated by the Office of National Economic and Social Development Board (NESDB). The NESDB is responsible for drafting national SCP policies, indicators and evaluation criteria in Thailand. It also acts as a coordinator for SCP-related initiatives between the cabinet and implementing agencies.
Other key ministries involved in SCP work include the Ministry of Natural Resources and the Environment (MONRE) and the Ministry of Industry (MOI). 

SCP-related objectives have been incorporated into Thailand’s 10th NESDP (2007-2011), which strives for sustainable development via a ‘sufficiency economy’. The 10th NESDP contains five major strategic directions. One of these addresses development based on the sustainable utilization of diversified biological resources. The plan highlights that current production systems have been using natural resources in a wasteful manner. The plan suggests that current patterns of production and consumption behaviours need to be adjusted to reduce the impacts on the natural resource base.

The 10th NESDP therefore seeks to develop policies which promote sustainable production and consumption within society. This includes the creation of economic instruments, such as subsidies and environmental taxes, to encourage clean technologies and the economic utilization of resources in production activities (NESDB, 2007). Specific SCP-related targets in the 10th NESDP include:

  • Maintain forests at no less than 33% of the total land area;
  • The proportion of river basins and natural water sources with a water quality rating of fair or good to be at least 85%;
  • Reduce the rate of CO2 emissions per person by 5% from 2003 levels – CO2 emissions to be no higher than 3.5 tonnes per person annually;
  • Limit waste production in urban areas to no higher than 1 kg per person daily; and Ensure proper disposal of at least 80% of all hazardous waste from communities and industries.

SCP has gained even more prominence in the upcoming 11th NESDP (2012-2016). The overarching vision of this plan is to build a ‘happy society with equity, fairness and resilience’ (NESDB, 2010, page 8). The improvement of natural resources and environmental quality is one of seven key targets of the 11th NESDP. Some broad SCP-related principles are outlined in the plan as follows:

Conserve, restore and secure natural resources and the environment Shift the development paradigm and consumption behaviours towards an environmentally friendly society Improve ecological efficiency of the production and service sectors.

Resource consumption and production

Main Resource Consumption and Resource Efficiency Indicators (2010)

Population (millions) 69519
GDP (billion USD) 369709
GDP is in USD exchange rate based on year 2005 and deflated.
Source: UNSD database.
Subject Area Total Per person Per USD$ of GDP
Domestic Material Consumption, DMC
(tonnes, tonnes per capita, kgr per 1USD$)
519,251,584 7.82 8.22
GHG emissions
(kilotonnes,tonnes per capita, kgr per 1USD$)
421,227.84 6.34 3.18
Total Primary Energy Supply, TPES
(Petajoules, Gigajoules per capita, Megajoules per 1USD$)
4,916.36 74.04 41.51
Water Use
(Trillion litres, Kilolitres per capita, Litres per 1USD$)
127.00 1,912.59 922.17
Subject Area Indicator
Population density 2015 (UNESA 2012 revision), population per 131
GDP per capita (USD), 2013 WB 5,779.00
HDI Rank (2013) UNDP 0.722
Arable land (hectares per person) WB 2012 0.25
Forest cover in % (2010), UNSTATS 37
Material intensity (2010)UNEP 2.3
Per-capita energy use (kg of oil equivalent per capita) 2011, WB 697
Energy intensity (total primary energy consumption per USD of GDP) 2011, EIA 22,970.43
GHG intensity (2010) UNEP 1.87
CO2 emissions (metric tone per capita), 2010, WB 4.4
Number of Middle Class consumers % (2010), ADB 86
Number of people with income < 2USD/day (PPP, USD, %), 2010, ADB 11

Trends in Resource Consumption and Resource Efficiency Indicators (1970-2010)

DE: Domestic Extraction;
MI: Material Intensity of the economy;
MF: Material Footprint.
All other abbreviations explained in the table above

Panel a) shows Thailand’s GDP increasing by a factor of ten, followed by TPES (factor eight), DMC, GHG emissions, and population, which doubled. Panel b) shows that DE per capita had not grown even in proportion to DMC in gross terms, but that non-metallic minerals had, while almost one tonne per capita of fossil fuels was being extracted in 2010, were none was in 1970. Comparing DE to the MF per capita in panel c) indicates that Thailand’s DE was slightly less than its material requirements in gross terms, but is somewhat reliant on imports (direct or embodied) for fossil fuels and metal ores, while producing more biomass than locally required. Thailand is another country where the impact of the 1997 financial crisis is clearly discernible in its material flows. Panels d), e) and f) show per capita consumption increased on all measures. Panel d) shows a major step decrease in both MI and adjusted MI in the wake of the 1997 financial crisis. Panel e) indicates that both EI and adjusted EI have increased, indicating increased coupling of economic growth to energy use, however this has not translated to GHG emissions intensity, which decreased on both footprint based and conventional measures. Conventional indicators appear to overstate energy consumption and understate GHG emissions relative footprint based measures.

(Source: UNEP CSIRO Indicators for a Resource Efficient and Green Asia and the Pacific, 2015).

Key references relevant to SCP

UNEP's relevant activities

The information in the country profiles herein have been obtained through research with firsthand and secondhand sources. The information presented herein cannot be considered as official policy of governments or other official bodies. The SWITCH-Asia Programme cannot be held responsible for the content of the sites to which it provides links or for the availability of servers or links. Information is being continuously updated in order to maintain an up to date country profile. If you would like to contribute information for this profile or have any further comments, please send an email to:


"Green finance" - funding for sustainable consump­tion and production - represents only a small fraction of total commercial lending and financial products available, and is sold at a premium to non-green finance. In a regional, cross-country assessment focusing on the three ASEAN countries Thailand, Indonesia and Malaysia, Thailand has dem­onstrated the most promising progress, helped by an early start in government-led initiatives and capac­ity building compared with Indonesia and Malaysia. Alternative sources for finance, such as factoring and lease financing, could help enable Small and Medium Enterprises (SMEs) to invest in sustainable consump­tion and production in Thailand.

Targeting the combination of both SMEs and green activities is not yet a priority intersection for policy makers, there­fore new solutions are required. Initiatives specifically geared towards SME-sponsored green projects are not common, but stakeholders confirm that it is compel­ling market niche with clear potential. Despite promising developments, a key issue is the need for capacity building and awareness of sustainable consumption and production.

More than 2.7 million SMEs were registered in Thailand in 2012, representing 98.5% of total businesses, contribut­ing 37% to national GDP. About 80% of total employment is covered by SMEs. Small enterprises focused on services have a share of 34.1% of total SME GDP, followed by man­ufacturing (30.9%), and trade and maintenance (27.7%).

Driven by long-running SME oriented programmes and credit-support policy responses by the Government of Thailand, commercial banks in Thailand have been the key channel for an increase in SME loans over the last few years, increasing SME loans' share of total loans from 28.1% in 2007 to 37.1% in 2012. Since then, THB 5 trillion (USD 150 billion) in SME loans were outstanding in 2013/Q2, representing 32.8% of total loans. Commercial loans amounted to THB 3.946 trillion (USD 120 billion), of which 22.8% were disbursed to SMEs in the manufacturing sector. Working capital loans continue to dominate in SME finance, following a typical 3-year loan tenor structure with a premium to the retail rate of 3% to 5%.

Private sector finance trends - Alternative Sources

Alternative financing techniques, notably factoring and lease financing, serve as complementary sources of work­ing capital or investment finance, and are well suited to developing markets where the financial infrastructure presents gaps, or where the collateral regime or infor­mation infrastructure are weak. Factoring remains the most expensive and least popu­lar of the two alternative sources of finance. In Thailand, dedicated non-bank financial in­stitutions, like Bangkok Leasing, provide lease financing. Equipment and technology suppliers, for example, GE or Caterpillar, also offer lease financing on steam turbine generator sets for very small power plant (VSPPs) devel­opers and other customers through group-branded fi­nance partners. These alternative finance options are con­sidered more expensive and are therefore less preferred, but experts agree that they serve a role in kick-starting market demand for new technologies.

The Market for Alternative Invest­ments provides a public listing alternative for Thai SMEs with lower costs and less stringent requirements. Es­tablished by the Stock Exchange of Thailand, the plat­form allows SMEs to access long-term capital to fuel their growth and potentially prepare a move to the main stock exchange. In Q1 2014, 97 companies were listed, reporting total sales of THB 28.5 billion (USD 877 million). The venture capital and private equity industry is small in Thailand and has focused on mergers and acquisitions and restructurings, rather than start-up and mezzanine finance. In addition, the weak Thai legal system and the under­developed capital market made exits difficult. The government has established venture capital funds, including the SME Venture Capital Fund, but the industry is still relatively small. Strengthen­ing SMEs' international competitiveness and improving access to finance are part of the Third SME Promotion Master Plan's objectives.

Public support in Thailand

The Government of Thailand has demonstrated that political will and leadership can create regional champi­ons. Thailand's major public support schemes for green finance are linked to the Energy Conservation Promo­tion Fund, implemented in 1992 to support energy ef­ficiency improvements and renewable energy develop­ment among others. Funding and fiscal incentives are provided through three funds, notably the ENCON Fund, the ESCO Fund and the Energy Efficiency Revolving Fund (EERF). From the outset, the funds aimed to (i) stimulate the investment appetite of commercial banks and private sector actors to engage in developing and financing re­newable energy and energy efficiency projects, (ii) create networks of financiers, ESCOs and developers, and (iii) provide training to banks in technical and policy support analyses.

Key challenges SMEs face accessing finance

Structural barriers:

Inefficient coordination and unclear responsibilities of relevant government agencies complicate applica­tion processes, and slow implementation of policies. Although a collateral regime has existed allowing for pledging and mortgaging of immovable assets, facilitating large-scale project finance, obligors must present moveable property to the creditor, thus utilisation of the property impossible. Other property types (raw materials, intellectual property) cannot be securitised at all. While similar regulations are already in place in Indonesia and Malaysia, as well as Sin­gapore, Cambodia and Vietnam, as of July 2014, the Thai Government has yet to pass the draft law.

Supply-side barriers:

- Higher transaction costs

- Long turnaround time due to additional (environmen­tal) assessments

- Longer tenor required (hence higher risk) to achieve environmental and financial savings

- Financiers lack technical skills

- Organisational processes necessary to evaluate green projects and smaller, newer and more opaque firms

- Lack of differentiation in Thailand for green finance products typically means that green transactions must be directly compared with non-green deals, without the dedicated metrics needed to support internal and market momentum for new business lines.

Demand-side barriers:

- Short-term outlooks

- Lack of awareness of the business case for green in­vestments

- Inadequate business ena­bling capacity

A government-led, top-down approach will be es­sential to enforcing and stimulating greater SME access to green finance, and raising awareness of sustainable consumption and production. Economic incentives for banks should be considered to help them overcome inertia and initially higher transac­tion costs. National regulations, such as quotas for commercial lending to SMEs for green projects, would be a strong market signal to advance progress towards greener and more inclusive financial services.

Main institutions providing Green Finance

Main institutions providing Green Finance

Thailand's Board of Investment (BOI)'s investment promotion programmes and fiscal incentives regularly target SMEs and green sectors. The BOI currently offers a 'Productivity Enhancement Program', which encourages companies to use renewable energy, reduce energy con­sumption and replace machinery to improve production efficiency.

Thailand's Energy for Environment Foundation (E for E), which manages the ENCON Fund, comple­ments its funded financing facilities with capacity build­ing and advisory services, through multiple "Service Cells".

Other institutions providing Green Finance in Indonesia are:

CIMB Thai Bank

Bangkok Bank

ESCO Revolving Fund


ESCO Revolving Fund

Krung Thai Bank (KTB)

SME Bank

Ministry of Foreign Affairs of Finland

Global Environment Facility (GEF) Trust Fund