Green finance is taking root in Thailand. The head of the country’s Securities and Exchange Commission said that the Kingdom will open a market for trading carbon credits in 2025 with the backing and expertise of the Stock Exchange of Thailand to ensure it thrives.

“Thailand needs a much more active carbon credit market,” said Securities and Exchange Commission (SEC) Secretary-General Pornanong Budsaratragoon. “The stock exchange will offer trading expertise and a wider base of investors to help it succeed.”

The development of green finance is essential to funding actions and policies that propel businesses and societies to a more sustainable future. However, financing has been one of the weaker pillars in the green transition.

According to Bloomberg news service, Thailand’s domestic trade in carbon offsets has been hamstrung by oversupply that has dragged down prices. Demand has translated into the purchase of roughly 3.5 million tons of carbon credits between 2016 and October last year, but about 20.5 million tons of credits were generated during the same period.

The Kingdom has also sold carbon credits overseas, recently signing agreements for country-to-country credits trading. Bloomberg said that Thailand is seen as having strong potential to supply global demand as trading in carbon credits picks up.

Thailand has been rapidly advancing in the area of green finance. In late 2023, Energy Absolute, a Thai green energy provider, completed the world's first carbon offset sale under a new system created by the U.N. Climate Accord or Paris Agreement, selling carbon offset credits to Switzerland's KliK Foundation.

In addition, the Kingdom’s financial policymakers, biggest banks and several of its leading corporations have issued green bonds and sustainability-linked debt instruments. While Singapore leads Southeast Asia when it comes to green financing, Thailand is striving to increase its share of the market.