As an introduction, this chapter presents an overview of the OECD Framework for Industry’s net-zero transition, outlining its key principles, objectives and outcomes. It details the implementation process of the Framework in Thailand from 2023 to 2025, highlighting the key stakeholders involved, the major milestones achieved and its contribution to policy objectives.
Implementing the OECD Framework for Industry’s Net‑zero Transition in Thailand
Decarbonising the Petrochemical Sector and Plastics Value Chain
Abstract
The decarbonisation of the industry sector is increasingly urgent, particularly as industrial emissions account for as much as 40% of the total global CO2 emissions. As industrial activity is rapidly expanding in emerging markets and developing economies (EMDEs), their share within the total global is expected to rise (IEA, 2025[1]; OECD, 2022[2]). Decarbonising industry presents unique challenges due to long investment cycles, high energy intensity and the limited availability of commercially viable low-carbon technologies for hard-to-abate sectors such as steel, cement and chemicals. These difficulties are further compounded in EMDEs by infrastructure constraints, access to finance and competing development priorities (OECD, 2022[3]).
In response, the OECD has developed the OECD “Framework for Industry’s net-zero transition: Developing financing solutions in emerging and developing economies” (hereinafter “the Framework”), providing a step-by-step approach to assist emerging and developing economies to improve the enabling conditions and identify financing solutions that can accelerate industry’s transition at a country level (OECD, 2022[3]). The ultimate objective of the Framework is to contribute to creating an enabling environment for investment in low-carbon technologies1 and to developing financial solutions to decarbonise the industry sector (OECD, 2022[3]).
The Framework acknowledges the diverse needs and capabilities of industries across countries and sectors and proposes a flexible methodology that can be tailored to local context. While focussing on policy and financial instruments to stimulate investment in low-carbon technologies, the Framework recognises the importance of a holistic strategy to decarbonise the industry sector that includes for instance the entire industry value chain, the development of infrastructure and industrial and trade policies.
The Framework is a collaborative approach that brings together three key stakeholder groups, policy makers, industry actors and finance institutions, who are contributing or willing to decarbonise the industry and finance the transition (see Figure 1.1). Rather than introducing entirely new concepts, the Framework fosters alignment, shared understanding and practical co-ordination among these groups. Additionally, policy makers benefit from greater clarity on the costs, benefits and system‑level impacts of industrial transition strategies, enabling more informed and integrated climate and energy policy development. Industry actors gain support in identifying and shaping enabling conditions that can accelerate the deployment of low-carbon technologies and attract investment. Meanwhile, financial institutions are equipped with clearer insights into viable financing mechanisms and risk-sharing approaches that can help them scale up support for industrial decarbonisation and develop new market opportunities (OECD, 2022[3]).
Source: (OECD, 2022[3])
The Framework proposes a five-step approach (see Figure 1.2). Pillar 1 of the Framework encompasses Steps 1 and 2. Its objective is to identify the industry scope/subsector (herein called as the “Focus Area”) and a group of key stakeholders to engage with. The selection is informed by background research and data collection on socioeconomic, industrial, energy and investment issues that are critical for the decarbonisation of the manufacturing industry (i.e. GDP contribution, employment, energy use, emissions, foreign and domestic direct investment). Pillar 2 presents the analytical core of the Framework implementation. It consists of Step 3, focused on assessing the business case of the low-carbon technologies identified for the transition of the Focus Area and Step 4, centred on developing solutions for improving the enabling conditions and financing instruments to operationalise the selected low-carbon technology and approaches based on their business cases. Pillar 3, which involves Step 5, revolves around the dissemination of the Framework’s outcomes through outreach activities to help stakeholders gain insights about the benefits of the Framework for industry transition.
Source: (OECD, 2022[3])
Sectoral focus and rationale
The implementation of the Framework in Thailand is one of the key activities of the Sustainable Infrastructure Programme in Asia (SIPA). The SIPA programme is supported by the International Climate Initiative (IKI) and the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (OECD, n.d.[4]). Within SIPA, the Framework is carried out through the Clean Energy Finance and Investment Mobilisation (CEFIM) programme. The CEFIM programme aims to support governments in emerging economies in Africa, Latin America and South and Southeast Asia to enable finance and investment in decarbonisation of industry, renewables and energy efficiency.
The National Economic and Social Development Council (NESDC) and the OECD are collaborating on implementing the Framework for Industry’s net-zero Transition to support Thailand’s decarbonisation journey. Furthermore, the project has built on an established cooperation between Thailand’s government and the OECD, including the Thailand Country Programme Phase 2 (launched by the OECD Secretary General and Thailand’s Deputy Prime Minister in March 2023) and the Clean Energy Finance and Investment Roadmap in collaboration with the Department of Alternative Energy Development and Efficiency (DEDE) of the Ministry of Energy (OECD, 2024[5]). These efforts are also aligned with Thailand’s broader engagement with the OECD as part of its path towards possible membership, reaffirmed by Thailand’s formal request to initiate the accession process in June 2024 and supported by ongoing policy dialogue and reform efforts across key areas of economic, environmental and institutional governance (OECD, 2024[6]). In December 2025, Thailand submitted Thailand’s Initial Memorandum to the OECD, thereby launching the technical phase of the OECD accession process (OECD, 2025[7]).
Following stakeholder consultations and an initial assessment of Thailand’s industry decarbonisation priorities, the petrochemical sector has been selected as the sector for implementation, including a plastic value chain perspective. The choice of petrochemicals and plastics reflects the strategic importance of this sector for Thailand’s economy, as well as its contribution in terms of energy consumption and CO2 emissions within the industry sector (see Annex C). The petrochemical and chemical sectors together represent the second largest employer within the manufacturing sector in Thailand. In addition, Thailand hosts the largest petrochemical industry in Southeast Asia, positioning the country as a regional hub for chemical and plastic production. The country is also the world third largest producer of bioplastics and has the ambition to become a bioplastic hub for the ASEAN region by 2027. The plastic value chain is also a priority area under several national strategies (see Annex C), including the Bio-Circular-Green (BCG) Economy Model, the Roadmap on Plastic Waste Management (2018–2030) and the development of an EPR scheme2 through the Sustainable Packaging Management Act (Ministry of Natural Resources and Environment, Pollution Control Department, 2024[8]).
While the sector is a significant source of energy consumption and CO2 emissions, the rationale for selecting this value chain goes beyond decarbonisation. It also lies in the sector’s potential to generate cross-cutting benefits, such as fostering industrial symbiosis, supporting innovation in bio-based materials, strengthening Small and Medium-sized Enterprises (SMEs) involved in plastic recycling and conversion. Innovation in low-carbon solutions has also the potential to create new, high-value economic sectors and generate employment in clean technology, engineering and renewable energy.
Importantly, decarbonising the petrochemical and plastics sector also aligns with global trends. These include the growing adoption of carbon-related trade policies such as the European Union (EU)’s Carbon Border Adjustment Mechanism (CBAM). Compliance with such measures can strengthen exports of domestic products, as well as attract foreign investments for industrial projects within Thailand’s special economic zones. Finally, focusing on the plastic value chain echoes to the rising focus on plastics in multilateral negotiations to tackle plastic pollution, notably the Intergovernmental Negotiating Committee on Plastic Pollution (INC) under the United Nations Environment Programme (UNEP) (UNEP, 2022[9]; European Commission, 2025[10]). During the fifth session of the INC (INC-5) of the Plastics Treaty, the country stated its support for the development of a legally binding international instrument to end plastic pollution. It emphasised the need for covering the full life cycle of plastics, for considering national circumstances, the inclusion of financial support mechanisms, the promotion of technology transfer, capacity building and public-private partnerships (UNDP, 2024[11]).
Governance and implementation steps
The implementation of the Framework was co-ordinated through multiple levels of engagement. The NESDC served as the main governmental focal point, while the OECD acted as the Secretariat and working-level counterpart. The process also draws on existing institutional structures, particularly the NCID, to consider how the high-level findings and recommendations of the country report could be implemented. Additionally, to ensure coherence and transparency throughout the process, three “Project Meetings” were held to provide strategic guidance, review key intermediate outcomes and engage with broader stakeholder groups. In addition, ad-hoc bilateral consultations at the working level supported the process and fed into the Project Meetings (see Figure 1.3).
The key milestones and outcomes of these meetings are summarised in Annex A. Three project meetings took place in Bangkok (Thailand) to convene a stakeholder group representing over 60 organisations from government, industry associations, national and multinational companies, financial institutions, international partners and multilateral development agencies, research and academia. The Project Meetings gathered a diversity of Ministries and Government Agencies across the Thai administration, reflecting a whole-of-government approach (Annex A).
Structure of the country report
This country report provides a series of recommendations to foster finance and investment in decarbonising Thailand’s petrochemical sector and plastic value chain. These recommendations build on the financial solutions and enabling conditions identified throughout the Framework implementation. Specifically, the report seeks to identify solutions that can scale up finance and investment in three low-carbon options: bioethanol to bio-ethylene, bio-based and biodegradable plastics and carbon capture and storage (CCS). This report provides a comprehensive analysis, addressing the complexity of the petrochemical sector, which encompasses the production of thousands of products. It spans different parts of the value chain - from petrochemical production processes to downstream plastic manufacturing – making it a uniquely thorough study for Thailand. Moreover, the findings can be also applicable to other countries, given the shared challenges in decarbonising this sector.
The report is structured in six chapters. Chapter 1 provides a brief overview of the Framework and the related implementation process in Thailand. Chapter 2 outlines the rationale and key take aways of the assessments conducted for the selection of the three low-carbon options. Chapter 3 presents the results of economic assessments conducted for each selected low-carbon option, as well as how financial levers can improve their competitiveness. Building on the economic assessments, chapters 4 and 5 explore the financial solutions and enabling conditions (including policies, regulations, market-based solutions) to drive investments in bioplastics (chapter 4) and CCS (chapter 5). Chapter 6 proposes a series of recommendations to foster investments in each of the three selected low-carbon options. In addition, deep dives into Thailand’s industry sector (including key related economic and climate strategies), and into the petrochemical and plastics manufacturing sectors are presented in Annex B and Annex C.
Through its focus on the petrochemical industry and plastic value chain, the Framework aims to support Thailand’s efforts in achieving its emission reduction objectives and in advancing the implementation of the BCG Economy Model, thereby harnessing associated socio-economic benefits. Thailand’s BCG Economy Model is a national strategy for sustainable, inclusive and innovation-driven growth, integrating bioeconomy, circular economy and green economy approaches. The BCG Action Plan 2021-2027 operationalises this vision and includes a focus on biofuels and biobased products (biochemicals, biomaterials).
Thailand has set ambitious targets and enhanced national efforts, aiming to achieve net-zero GHG emissions by 2050. On November 4, 2025, the Cabinet approved Thailand’s second Nationally Determined Contribution (NDC 3.0) (Department of Climate Change and Environment, 2025[12]). The Office of Natural Resources and Environmental Policy and Planning (ONEP) has officially submitted NDC 3.0 to the United Nations Framework Convention on Climate Change (UNFCCC). The implementation period for NDC 3.0 is set for 2031-2035, demonstrating Thailand’s strengthened commitment and ambition by reducing GHG emissions compared to the base year level of 2019. The target is to reduce net GHG emissions by 47% from the 2019 baseline by 2035 (representing a reduction of 135.2 million tonnes of CO2 equivalent (MtCO2eq)), covering all sectors of the economy. Under this target, Thailand’s net GHG emissions would not exceed 152 MtCO2eq by 2035, in line with the 1.5°C pathway, and supporting the country’s goal of achieving net-zero GHG emissions by 2050 (B.E. 2593).
Thailand has adopted a series of plans and strategies to support the achievement of these emission reduction targets (Annex B and Annex D). More broadly, the recommendations aim to inform any related national policy development, including the upcoming National Economic and Social Development Plan.
In a context where competitiveness is a critical concern, the development of financial instruments and enabling conditions is essential to stimulate investments in decarbonising these sectors. The Framework implementation in Thailand contributes to these policy objectives by notably providing:
A whole-of-government and multistakeholder approach: By engaging government bodies, industry actors and financial stakeholders, the Framework promotes coordinated action and stakeholders’ dialogue. The Framework implementation provides a set of recommendations (chapter 6) that encompasses multiple Ministries and national agencies, ensuring a comprehensive approach.
Tailored solutions for implementation: By focusing on selected low-carbon options (chapter 2), the Framework outlines financial and policy solutions that are specific to each one of these options, rather than general considerations. Therefore, the outcomes of the Framework can directly benefit the development of on-going and planned industrial projects that implement these low-carbon solutions.
Evidence-based recommendations: Building on evidence-based analyses, the Framework highlights the most impactful financial instruments to support the selected low-carbon options (chapter 3). These outcomes can guide policymakers on the type of instruments to be prioritised, as well as on where public support can be efficiently used and provide maximal impact to stimulate investments.
Furthermore, the findings and recommendations can inform several key national policy and regulatory initiatives currently under development, such as the Climate Change Act and the Taxonomy. This presents a valuable opportunity to advance the decarbonisation of petrochemicals and the plastics value chain by ensuring these frameworks explicitly address these sectors. Moreover, the outcomes offer actionable policy guidance by identifying specific existing laws, regulations, or policies that may require amendments to effectively support the implementation of the selected low-carbon solutions.
Finally, the Focus Area of the Framework (i.e. petrochemicals and plastic value chain) contributes to make the link between the decarbonisation policy agenda of the petrochemical sector and plastic value chain and the plastic pollution reduction agenda. In this way, the outcomes of the Framework can provide insights for aligning both agendas and developing a comprehensive approach to plastic related emissions and pollution issues (chapters 4 to 6).
References
[12] Department of Climate Change and Environment (2025), Thailand’s Second Nationally Determined Contribution (NDC 3.0), https://unfccc.int/sites/default/files/2025-11/TH%20NDC%203.0.pdf.
[10] European Commission (2025), Carbon Border Adjustment Mechanism, https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en.
[1] IEA (2025), Support for decarbonising heavy industry in emerging markets and developing economies, https://www.oecd.org/en/publications/support-for-decarbonising-heavy-industry-in-emerging-markets-and-developing-economies_7787cde0-en.html.
[8] Ministry of Natural Resources and Environment, Pollution Control Department (2024), Thailand’s Sustainable Packaging Management Act (EPR Scheme), https://www.pcd.go.th/laws/31505/.
[13] OECD (2025), Development co-operation and the elimination of plastic pollution, OECD Publishing, Paris, https://doi.org/10.1787/96803ffc-en.
[7] OECD (2025), Thailand reaches key milestones in OECD accession process, https://www.oecd.org/en/about/news/press-releases/2025/12/thailand-reaches-key-milestones-in-oecd-accession-process.html.
[5] OECD (2024), Clean Energy Finance and Investment Roadmap of Thailand, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/d0cd6ffc-en.
[6] OECD (2024), OECD kicks off accession process with Thailand, https://www.oecd.org/en/about/news/press-releases/2024/10/oecd-kicks-off-accession-process-with-thailand.html.
[3] OECD (2022), “Framework for industry’s net-zero transition: Developing financing solutions in emerging and developing economies”, OECD Environment Policy Papers, No. 32, OECD Publishing, Paris, https://doi.org/10.1787/0c5e2bac-en.
[2] OECD (2022), Global Plastics Outlook, https://www.oecd.org/content/dam/oecd/en/publications/reports/2022/06/global-plastics-outlook_f065ef59/aa1edf33-en.pdf.
[4] OECD (n.d.), Sustainable Infrastructure Programme in Asia (SIPA), https://www.oecd.org/en/about/programmes/sustainable-infrastructure-programme-in-asia.html.
[11] UNDP (2024), Thailand’s statement at the fifth session of Intergovernmental Negotiating Committee to develop an international legally binding instrument on plastic pollution, including in the marine environment (INC-5), https://resolutions.unep.org/incres/uploads/thailand_national_statement_inc5_final_27_nov.pdf.
[9] UNEP (2022), Intergovernmental Negotiating Committee on Plastic Pollution, https://www.unep.org/inc-plastic-pollution.
← 1. Low-carbon technologies refer to all technologies that offer a lower or near-zero emission solution to conventional production processes that emit CO2.
← 2. EPR schemes are “an environmental policy approach in which a producer’s responsibility, physical and/or financial, for a product is extended to the post-consumer stage of a product’s life cycle” (OECD, 2025[13]).