Thailand plans carbon-credit push for sugar industry as green trade barriers rise

Carbon becomes an industry asset

Thailand’s Ministry of Industry is accelerating plans to turn the country’s sugarcane and sugar sector into a fully green industry, using carbon management, emissions-credit trading and carbon capture, utilization and storage, or CCUS. Industry Minister Varawut Silpa-archa presented the measures as a way to create additional economic value while protecting the sector’s competitiveness as environmental requirements become more influential in global trade.

According to Banmuang, Varawut said a visit to the Thai Udon Thani Sugar Mill in May demonstrated the industry’s potential to become a model for green manufacturing. The ministry’s objective extends beyond cutting greenhouse-gas emissions: it wants verified carbon reductions and captured carbon to generate income for sugarcane growers and industrial operators.

The scale of emissions makes the sector important to Thailand’s climate policy. Sugarcane cultivation produces an estimated 25-30 million tonnes of carbon dioxide equivalent annually, while sugar manufacturing emits another 10-15 million tonnes. Total emissions across the system therefore reach approximately 35-45 million tonnes a year. The government aims to integrate reductions in this supply chain into Thailand’s target of achieving net-zero emissions by 2050.

Tracking from farms to mills

The Office of the Cane and Sugar Board is developing a carbon-tracking system covering the full production chain, from sugarcane fields to mills. The system is intended to provide accurate and transparent measurement, verification and reporting of emissions. For producers and buyers, such records could establish the evidence needed to demonstrate the carbon intensity of sugar and related products.

The ministry also plans to develop credit trading through Thailand’s T-VER program, allowing farmers and companies to receive returns from qualifying emissions reductions. Its six stated priorities include internationally recognized standards for credits generated through CCUS, end-to-end carbon tracing, economic incentives through carbon markets, and stronger sustainability standards based on Bonsucro and the Sugar Ecolabel.

CCUS is another part of the plan. Captured carbon could be used or stored as biochar, which the ministry says would increase carbon storage in soil while adding value in agriculture. However, the announcement provided no investment figure, implementation timetable or estimate of how many tonnes of emissions could initially be captured, stored or converted into tradable credits.

Preparing for carbon-linked trade rules

The ministry identified the European Union’s Carbon Border Adjustment Mechanism and other green trade measures adopted by partner countries as issues requiring preparation. The government’s concern is that exporters could lose competitiveness if Thai production standards and carbon-accounting systems fail to meet internationally accepted requirements. Conversely, verifiable reductions could help companies defend existing export markets and pursue additional business.

The remaining priorities are preparation for carbon-border measures and the integration of sugarcane and sugar into Thailand’s 2050 net-zero program. The initiative brings farms, mills and carbon markets into one policy framework, but execution will determine how revenues and costs are distributed. Farmers will need workable measurement rules, mills will need systems capable of tracing feedstock and emissions, and credit buyers will require verification they can trust. Until detailed rules and financing are published, the proposed carbon income remains an opportunity rather than a guaranteed new revenue stream.