Local sustainable bond issuance exceeds B1.1tn

Thailand’s sustainable bond market has surpassed 1.1 trillion baht in cumulative issuance, with regulators and market participants now turning their attention to transition finance as the next major growth driver, particularly for carbon-intensive industries seeking funding to support decarbonisation efforts.

Speaking at an ESG bond seminar organised by the Thai Bond Market Association (ThaiBMA), the Securities and Exchange Commission (SEC), and the Royal Thai Embassy in Brussels, Ariya Tiranaprakij, president of ThaiBMA, said Thailand’s environmental, social and governance (ESG) bond market has expanded steadily over several years.

Between 2019 and April 2026, cumulative ESG bond issuance exceeded 1.1 trillion baht from 43 issuers, while outstanding ESG bonds totalled 1.03 trillion baht.

Despite the strong growth, nearly 70% of private-sector ESG bond issuance remains concentrated in the energy and transport sectors, with most issuers already operating green or low-carbon businesses, she said.

Meanwhile, hard-to-abate industries continue to face challenges in accessing suitable sustainable financing instruments.

Transition Bonds Emerging

Investors and issuers increasingly view transition finance as a critical mechanism for helping carbon-intensive industries move towards net-zero emissions targets.

Kosintr Puongsophol, senior financial sector specialist at the Asian Development Bank, said transition bonds have become an increasingly important financing tool globally, with roughly 59% of transition finance proceeds directed towards energy, infrastructure and utility projects.

He said companies seeking transition financing must establish transparent and credible transition plans covering strategic objectives, operational implementation, value chain engagement, measurable targets, and governance structures in order to avoid concerns over greenwashing.

The importance of transition financing is evident in heavy industries such as cement, petrochemicals, power generation, transport and agriculture, where substantial capital investment is required to reduce emissions.

SEC Prepares New Rules

The SEC is planning to introduce regulatory frameworks for new sustainability-linked debt instruments.

Tayakorn Jitrakuldecha, director of the bond department at the SEC, said the regulator is preparing a public consultation on draft regulations governing transition bonds and Thailand amber bonds, aligned with the Thailand Taxonomy and International Capital Market Association standards.

Under the proposed framework, issuers will be required to establish transition finance frameworks and obtain external reviews from qualified independent assessors.

The SEC plans to continue offering fee exemptions to encourage ESG bond issuance.

Market observers say the new regulations could significantly expand the issuer base beyond traditional green sectors and accelerate sustainable financing across the broader economy.

Heavy Industry

Industrial companies are already laying the groundwork for future transition finance opportunities.

Chana Poomee, advisor to Siam Cement Plc (SCG), highlighted the progress of the “Saraburi Sandbox” initiative, a collaborative effort led by the Thai Cement Manufacturers Association and SCG to transform Saraburi into Thailand’s first low-carbon city.

The project promotes low-carbon hydraulic cement, LC3 clay technology capable of reducing greenhouse gas emissions by 30-40%, renewable energy adoption, and waste-to-energy solutions.

According to Mr Chana, successful transition financing requires clear corporate roadmaps aligned with Thailand’s nationally determined contributions and national taxonomy frameworks.

Growth Stage

As Thailand’s ESG bond market matures, industry leaders expect future growth to be driven less by traditional green financing and more by transition financing aimed at helping high-emission sectors decarbonise.

The emergence of transition bonds and Thailand amber bonds is expected to unlock new investment opportunities for industries previously excluded from sustainable finance markets, while supporting the country’s long-term ambition to achieve net-zero greenhouse gas emissions.

Ms Ariya said the next phase of market development will place greater emphasis on transparency, measurable climate outcomes, and credible transition plans, reinforcing investor confidence and broadening access to sustainable capital across the economy.

Source – Bangkok News