A wide range of options can be implemented to decarbonise petrochemicals and the plastic value chain in Thailand. As part of “Step 2” of the Framework implementation, a detailed assessment was conducted on ten low-carbon options, considering various dimensions and Thailand’s national circumstances. Based on these findings and stakeholder consultations, three low-carbon options were selected for the next steps of the Framework implementation: bioethanol to bio-ethylene (option No. 1), bio-based and biodegradable plastics (option No. 2) and CCS (option No. 3). The three selected options are primarily meant to reflect a high level of relevance regarding the different dimensions assessed, as well as to the Framework’s objective of identifying routes which struggle to achieve viable business cases.
Implementing the OECD Framework for Industry’s Net‑zero Transition in Thailand
Abstract
Petrochemicals are the backbone of countless industries and the economy. They are essential for producing plastics (used in packaging, construction, electronics, automotive), synthetic fibers (for clothing, industrial textiles), fertilizers (supporting global agriculture), pharmaceuticals, paints, lubricants, solvents and some fuel types. These materials are deeply embedded in our daily life, making petrochemicals critical to economic development, infrastructure and innovation.
The petrochemical and plastic value chain includes multiple building blocks, from upstream to final products. Its complexity stems not only from this diversity of products involved all along the value chain, but also from the variety of industrial processes underpinning their production (e.g. feedstock processing, steam cracking, catalytic reforming, production of intermediate chemicals, polymerisation, plastic conversion ...). As such, petrochemicals and plastics should not be viewed as a single industry sector, but rather as two distinct branches. Likewise, within the petrochemical sector, petrochemical products have distinct market dynamics and environmental challenges.
Figure 2.1 provides an overview of the conventional1 petrochemical and plastic value chain (namely fossil‑fuel based and non-biodegradable plastics, which represented more than 99% of global plastic production in 2024 (European Bioplastics, 2024[1]). The main building blocks of the value chain are explained in Annex C.
Note: ‘Conventional’ refers to fossil-fuel based and non-biodegradable plastics, which represents more than 99% of global plastic production. Alternative and bio-based production processes (not covered in this Figure) are discussed further down in this chapter. LPG: Liquefied Petroleum Gas, NGL: Natural Gas Liquids, PTA: Purified Terephthalic Acid, HDPE: High-Density Polyethylene, LDPE: Low-Density Polyethylene, LLDPE: Linear Low-Density Polyethylene, PVC: Polyvinyl Chloride, PP: Polypropylene, BR: Butadiene Rubber, SBR: Styrene Butadiene Rubber, ABS: Acrylonitrile Butadiene Styrene, PS: Polystyrene, EPS: Expandable Polystyrene, PET: Polyethylene Terephthalate.
Source: (Krungsri, 2023[2])
Accounting for 34.6 million tonnes per annum capacity (Mtpa) in 2022, Thailand's petrochemical sector is the largest in the ASEAN region and ranked 16th globally (Krungsri, 2024[3]). The total capacity is comprised of 13.2 Mtpa of capacity for upstream products (38% of total capacity), 8.5 Mtpa of capacity for intermediate products (25%) and 12.5 Mtpa of capacity for downstream products (37%) (Petrochemical Industry Club, 2022[4]). Ethylene plays a central role in the upstream segment, representing approximately 40% of the total upstream petrochemical capacity (5.5 Mtpa), which places the country 9th globally in terms of ethylene production capacity. Production of upstream petrochemical products in Thailand reached around 13.2 Mtpa in 2022 (Krungsri, 2023[2]). Among the most produced upstream petrochemical products, ethylene accounted for the largest share of the production (around 4.5 Mtpa), reflecting its predominance in terms of capacity (Annex C).
Petrochemicals and chemicals represented 55%2 of the total final energy consumption from Thailand’s manufacturing sector in 2023 (i.e. 26 Mtoe, see Annex B), as well as 12% of the total direct energy related CO2 emissions from the industry sector (i.e. nearly 6 GtCO2, see Annex B).
Across the value chain, upstream petrochemicals are the most energy consuming and emission intensive products, driven by olefins (Annex C) (Kanchanapiya et al., 2014[5]; Tantisattayakul et al., 2016[6]). Available estimates indicate that the upstream petrochemical industry accounted for 62% of GHG emissions of Thailand’s petrochemical industry, whereas the intermediate and downstream groups were responsible for around 20% and 17%, for the period 2005-2010 (Kanchanapiya et al., 2014[5]). Given that olefins are both the most produced and the most emission-intensive type of petrochemicals in Thailand, they constitute the focus of the Framework's implementation.
The steam cracking process is the main source of CO2 emissions for olefin production, with more than 80% of the direct CO2 emissions arising from fossil-fuel combustion in the furnaces (Mynko et al., 2022[7]). Steam crackers in Thailand are quite new when one considers that the average lifetime of a steam cracker is 45 years (Worrell and Biermans, 2005[8]). As of 2025, 40% of the total steam cracker capacity in Thailand is 15 years and 20% under 5 years (Annex C). The age profile of the fleet highlights the crucial need to develop low-carbon options to decarbonise these existing assets. Both ethane-based and naphtha‑based crackers are operating in Thailand. However, in response to persistently high naphtha prices in Asia over recent years, the country is progressively shifting toward lighter feedstocks (Annex C).
A broad range of options can be used to decarbonise olefins production and the plastic value chain. These options are based on three main levers: i) switch in feedstock (e.g. from fossil fuels to biomass); ii) decarbonising production processes (especially steam cracking process) including energy efficiency, renewable electricity, electrification and CCUS; and iii) through effective end-of life management of plastic products Figure 2.2.
Note: See Figure 2.1 for the links with the different building blocks of the petrochemicals production and plastic value chain. HVC: High-Value Chemical
Source: Authors
Thailand’s decarbonisation plans and climate strategies do not outline any specific preferred pathways for decarbonising the petrochemical sector and plastic value chain. Therefore, a detailed assessment has been conducted to identify the subset of low-carbon options to be considered for the Framework implementation, based on the routes presented in Figure 2.2.3
For each decarbonisation route, the following dimensions have been analysed to assess their relevance to decarbonise the sector:
Relevance to Thailand’s specificities: relevance to national plans and strategies and ecosystem (industry structure, infrastructure, feedstock availability).
Projects in Thailand: existing or planned projects using the route.
Emission reduction potential (based on carbon intensity)
Technology Readiness Level (TRL)
Economic performance (competitiveness)
Other structuring considerations which may challenge the development of the route.
A synthesis of the assessments conducted for each option is presented in Annex E, highlighting how the different options compare across each dimension. This analysis was presented and discussed with stakeholders during a dedicated workshop and the overall performance of each option was considered in the final selection process.
In addition, it is important to recall that the selection of low-carbon options for the Framework implementation relies on 4 principles:
The Framework covers only a subset of low-carbon options. The Framework implementation does not aim to build comprehensive sectoral roadmaps. Rather, it aims to analyse how to improve the viability of critical technologies (that are ideally associated with specific projects) to achieve deep emissions reductions through policy and financing solutions.
The Framework implementation focuses on options which directly impact the manufacturing process, have a significant emission reduction potential and are consistent with Thailand’s national strategies.
The technologies should have a TRL of at least 6-7 (namely at least at a demonstration phase) and/or with examples of industrial deployment at international level.
The selected low-carbon options should benefit from the policy recommendations and financing solutions that the OECD Framework will propose. Therefore, technologies that are already technically and economically viable and widely implemented are less relevant. On the contrary, disruptive technologies that are technically viable but struggle to reach economic viability fit to the scope of the Framework.
The outcomes of the assessments presented in Annex E highlight 4 routes that are particularly relevant for the Framework implementation (Figure 2.3): biomass to bioethanol to bio-olefins, biomass to bio-based and biodegradable plastics, CCS, mechanical recycling.
The biomass-based routes (i.e. biomass to bioethanol to bio-ethylene and biomass to bio-based and biodegradable plastics) can build on multiple national plans and strategies aiming to promote the development of biofuels, biochemicals or bioplastics, as well as on the BCG Economy Model. 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 relevance of biomass-based routes for petrochemicals and plastic production in Thailand is further reinforced by abundant domestic biomass resources (sugarcane, cassava) and BOI incentives for bioplastics (see Annex C). These options can also rely on a well-established industry structure in Thailand (PLA, PBS, ethanol) and bioplastics companies (TotalEnergies Corbion, PTTMCC Biochem, SMS Corporation, ThaiWah PCL…). Regarding bio-ethylene specifically, a major project has been announced between the Brazilian bioplastic company Braskem and SCG Chemicals to build a facility in Map Ta Phut. In addition, biomass-based routes are associated with a higher GHG emission reduction potential4 compared to the other routes analysed, due to biogenic carbon.
CCS is strongly promoted in Thailand’s national strategies and dedicated plans are under development. Beyond these plans, implementation support for CCS is also emerging, with investment incentives proposed by BOI, the development of a regulatory framework by the Department of Minerals Fuels (DMF) or the consideration of CCUS for carbon credit registration by the Thailand Greenhouse Gas Management Office (TGO). Several projects involving CCS technology have been announced, including the development of a CCS Hub in the Gulf of Thailand and on-going action plan would cover around 20 CCS projects. These projects do not specifically target olefins production, but their development would contribute to create and strengthen the ecosystem and infrastructure for establishing CCS technology. Another strength of this route lies in its relevance for the retrofit of existing petrochemical assets and for industrial clusters. For the Framework implementation, it is important to note that the selected option is CCS (and not CCUS), as stakeholder consultations confirmed that CO2 utilisation was not a preferred option for olefin decarbonisation in Thailand.
Mechanical recycling is highly relevant given the central role of recycling in various national strategies and the target of 100% recycling of plastic waste by 2027. In addition, mechanical recycling in Thailand lies on a well-established industry structure. This option is associated to high emission reduction potential, as the circularity approach not only avoids emissions arising from plastics’ end-of-life, but also emissions from primary plastics (including olefins) production. This option was however not selected in this final list to ensure complementarity and avoid duplication with other projects’ stakeholders. Indeed, as mentioned during the kick-off meeting, a study on mechanical recycling aspects in Thailand is currently conducted by the IFC and the World Bank, including business model considerations (namely a very similar scope of the Framework implementation).
Source: Authors based on analysis developed in Annex E.
As a result, the following three low-carbon routes are selected:
Option No. 1: biomass to bioethanol to bio-ethylene
Option No. 2: biomass to bio-based and biodegradable plastics
Option No. 3: CCS
The three selected routes should not be considered as the only options to decarbonise Thailand’s petrochemicals and plastics. It is important to mention that all decarbonisation routes present their own strengths and challenges. Consequently, not a single route is intended to support the decarbonisation of the petrochemical industry and the plastic value chain by its own, but rather a combination of options. The selected options are primarily meant to reflect a high level of relevance regarding the different dimensions assessed, as well as to the Framework’s objectives of identifying routes which struggle to achieve viable business cases. In addition, these three selected options allow to cover a mix of biomass-based and conventional routes and to address both existing and new assets. While the biomass-based options support Thailand’s BCG Economy Model, the CCS route enables to address the emissions from the existing assets of Thailand’s petrochemical industry (steam crackers).
Towards a pipeline of projects
Each one of the three selected low-carbon option has the potential to create a pipeline of projects. As the outcomes of the Framework aim to support project pipeline development, particular attention is paid to both existing and prospective projects associated with the selected options.
For option No. 1, there is currently one bio-polyethylene flagship project and company - Braskem Siam Company- as outlined in Annex C. The investment began in 2023 and the construction is expected to be completed by 2027 with a capacity of 200 000 tonnes of bio-ethylene per year. This bio-ethylene, derived from bioethanol produced from sugarcane, will be supplied to SCGC’s existing plant to produce bio-based polyethylene (bio-PE) plastic pellets (Braskem, 2023[9]). The company has set a goal of producing 1 million tonnes of green polymers annually by 2030 (ICIS, 2024[10]).
The well-established bioethanol industry in Thailand can be a powerful lever to stimulate further similar type of industrial projects. In terms of supply, there are currently 28 bioethanol manufacturing plants in Thailand with a total capacity of around 6.8 million L/day (DEDE, 2024[11]). These manufacturing plants use different types of feedstocks, including molasses (11 plants), cassava (10 plants) and hybrid (7 plants). Despite the current production capacity, Thailand’s bioethanol consumption is only about 3.6 million L/day. This suggests considerable room for further bioethanol use (including for bioplastic production), coupled with the abundance of biomass resources (including cassava, sugarcane and molasses: see chapter 4 for more details).
The potential for implementing option No. 2 type of projects is based on the existing bio-based and biodegradable companies’ ecosystem. As detailed in Annex C, the bio-based and biodegradable plastics industry is already well developed in Thailand, with several leading companies. PLA is mainly produced by TotalEnergies Corbion (75 000 tons per year capacity), PBS by PTTMCC Biochem (20 000 tons per year capacity), TPS by SMS Corporation (global leader in the modified tapioca starch industry) and ThaiWah PCL (PTT MCC Biochem, n.d.[12]; SMS, n.d.[13]; Thai Wah, n.d.[14]). A major project currently underway is the development of a new PLA facility by NatureWorks, a joint venture between PTTGC and Cargill. In 2024, the company secured a USD 350 million (THB 12.6 billion) loan from Krungthai Bank to build a fully integrated PLA complex with an annual production capacity of 75 000 tonnes. The facility will include manufacturing plants for lactic acid, lactide and PLA polymer, utilising sugarcane as the primary raw material (GC, 2024[15]).
On option No. 3, Thailand aims to deploy CCS technology by 2040 at the latest, with the target of scaling up CCS capacity to 40 million tonnes annually by 2050 and 60 million tonnes by 2065. To support these goals, Thailand has established 13 projects in 5 areas, led by government agencies and the private sector (ERIA, 2024[16]). The primary initiatives developed by PTTEP include the Arthit CCS Pilot Project and the Eastern Thailand CCS Hub. The Arthit CCS Pilot Project is a flagship project located at the Arthit natural gas offshore field in the Gulf of Thailand (PTTEP, 2025[17]). It involves capturing CO2 from natural gas production process, injecting and storing it in depleted gas reservoirs, monitoring the stored CO2. The objective is to capture and store 1 Mt CO2 per year, starting injecting in 2028. This project has passed the Front-End Engineering Design (FEED) and the Final Investment Decision (FID) stages. It is of particular importance as the project serves as a model for future CCS hubs in Thailand.
The Eastern Thailand CCS Hub is central to Thailand’s long-term vision of achieving net-zero GHG emissions by 2050. The hub will be located in the EEC (which accounts for 40% of Thailand industry CO2 emissions), with the capacity to handle increasing volumes of CO₂ as more industries connect to the hub. Over time, the hub could expand to serve not only domestic industries but also regional CO₂ emitters, positioning Thailand as a leader in CCS technology in Southeast Asia. It will also establish a CCS infrastructure blueprint for future national and regional decarbonisation efforts. The objective is to ramp up to 10 Mtpa by 2030 and ultimately reaching 98 Mtpa CO2 storage capacity in saline aquifers in the Gulf of Thailand.
Beyond these two flagship projects, there are other projects envisioned for different sectors and of different nature. Some of them include: a CCU project at BLCP Power (CO2 capture from coal-fired power plant and converting them into methanol), the Nam Phong Power Plant in Khon Kaen project by the Electricity Generating Authority of Thailand (EGAT) (CO2 capture from natural gas-fired power plant and storage in nearby geological formations), the Mae Moh Basin project spearheaded by EGAT in collaboration with the DMF and PTTEP (CO2 capture from lignite-fired power plant and injection into a subsurface sandstone reservoir).
As mentioned earlier, while these projects do not specifically target olefins production, their development would contribute to create and strengthen the ecosystem and infrastructure for establishing CCS technology in the petrochemical sector.
Plastic GHG emissions reduction and pollution control are two interlinked issues (Box 2.1) (OECD, 2023[18]). While addressing plastic pollution issues does not fall in the scope of the Framework implementation, Thailand’s policy choices for reducing plastic pollution may drive the choice and the design of some of the solutions and recommendations highlighted in this report. For instance, the extent to which a plastic pollution fee or a ban on SUP can support bioplastics deployment would depend on the scope of application of these measures (which types of plastics are subject to these measures, which are exempted). Likewise, the scope of application of policies to stimulate demand for bioplastics or low‑emission plastics (i.e. which type of plastics they cover) developed in chapters 4 to 6 may be also driven by plastic pollution policies considerations. Overall, there may be synergies and trade-offs to be considered between decarbonisation policies and plastic pollution reduction policies.
From the perspective of the Framework implementation, the three selected options are meant to reduce CO2 emissions from fossil fuel-based plastic production, acknowledging that primary plastics would still represent an important share of Thailand’s total plastic production by 2050 (see Annex C). However, the promotion of any of these low-carbon options should be accompanied with end-of-life management mechanisms and policy support (collection, sorting, recycling, landfill, waste-to-energy, etc.) to prevent pollution issues. Given the linkages between plastic pollution and GHG emissions issues highlighted above, decarbonisation efforts should be embedded within a broader strategy that addresses both challenges, including by acting on the demand side (e.g. promoting eco-design and longer product lifespans, enhancing recycling).
Insights from OECD policy highlights
Plastic pollution and GHG emissions are often treated as separate environmental challenges, yet they are deeply interconnected. The production, use and disposal of plastics are significant sources of GHG, primarily due to their reliance on fossil fuel-based feedstocks.
The climate mitigation and plastic pollution policy domains have synergies because climate change and plastic policies influence plastics life cycle GHG emissions through different channels. Climate policies reduce the GHG intensity of plastics production and waste management and lead to lower plastic production, while plastic policies lead to emission changes through lower plastic production, an increased share of recycled plastics and improved waste management systems.
Scenarios developed by the OECD show that policies to mitigate climate change and curb plastic pollution are complementary in the environmental issues they address. Policy makers can combine efforts to fight plastic pollution and mitigate climate change by:
Strengthening the ambition of domestic policies to address plastics pollution: The results suggest that the most straightforward way of mitigating GHG emissions from the plastics life cycle is to slow down the increase in global plastics use and waste. In addition to mitigating environmental impacts of plastics leakage, countries could get closer to achieving their climate objectives.
Supporting the decarbonisation of the plastics life cycle: Reducing the energy-intensity of plastics production and increasing the share of secondary plastics can provide significant reduction in GHG emissions. Other mitigation options include increasing the availability and use of secondary plastics; decarbonising production and conversion; as well as waste treatment processes, by, among others, an increased use of electricity as a replacement for fossil fuels, combined with a decarbonisation of electricity generation.
Fostering innovation in plastics production and waste management: Much more ambitious policies are needed to direct technological change towards closing plastics loops and reducing leakage to the environment in a climate-friendly way. To ensure strong demand for circular plastics, investments in innovation should go hand in hand with education, environmental awareness, financial incentives for behavioural change and binding regulations that should be adapted to the local context.
Strengthening the secondary plastics market: Markets for secondary plastics remain vulnerable. Policies to support the supply and demand for secondary plastics include taxes on non-recycled plastic waste and recycled content targets.
Tapping into the complementarity of plastics and climate policies: When implemented jointly, policies to reduce plastics leakage and climate policies produce synergies in reducing GHG emissions from plastics.
Both policy agendas need to be implemented to address the environmental crisis: climate mitigation policies cannot be used as a substitute for plastics policies to reduce plastic leakage and plastics policies cannot replace dedicated climate mitigation action.
Source: (OECD, 2023[18])
References
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MEA can go up to 4.0 GJ/tCO
← 1. Alternative and bio-based production processes are covered and analysed further down in this chapter and in Annex E.
← 2. When considering non-energy use.
← 3. The low-carbon options presented in this Figure are based on global decarbonisation roadmaps and stakeholder consultations in Thailand (IEA, 2018[19]).
← 4. While most bioplastics have lower GHG emissions compared to fossil fuel-based plastics, other environmental challenges need to be considered, see Annex C.