Insight – Greener on the other side: Thailand’s bio-circular and green economy
The Thai Government is looking to green industries to drive its COVID-19 economic recovery. It has highlighted the country’s Bio-Circular and Green (BCG) economy to:
- promote value-added industries
- reduce pollution
- meet the country’s sustainable development goals.
The Thai Government has identified 4 priority sustainable industries under the BCG economy. Agriculture and food is one of those industries.
Thailand has one of the most advanced food processing industries in Southeast Asia. The industry is also highly export oriented.
Australia’s sustainably produced agricultural and seafood products can potentially be part of Thailand’s economic transition. There are also opportunities for Australian technology and advanced farming practices to work with Thai producers and processors.
Thailand’s bio-circular and green economy
Thailand introduced the BCG economy in 2019 to meet its sustainable development goals. The initiative was given renewed emphasis in January 2021, when the Thai Government promoted the potential for a green economic recovery from COVID-19. The government has announced a 5-year BCG strategic plan to drive a sustainable, equitable and resilient economy.
The BCG strategic plan is underpinned by 3 pillars:
- Bioeconomy – producing renewable biological resources and their conversion to value-added products. Thailand has a 10-year strategy to become the bio-hub of ASEAN, with target sectors comprising:
- Circular economy – recycling resources to reduce waste throughout the country’s product and value chains.
- Green economy – prioritising low-carbon and resource efficient products and supply chains to:
- promote green energy
- achieve net zero emissions targets.
Agriculture and food is one of the 4 priority industries under the BCG economy. The focus is on:
- value-adding to agricultural products and services, where Thailand is a regional leader
- waste reduction
- resource and land efficiency.
Thailand is looking to:
- adopt improved practices, such as smart farming technologies, traceability, food and product safety
- develop high-value and novel food products and functional ingredients.
The Thai Government is promoting the BCG economy by offering incentives to BCG‑related industries. This includes tax relief and exemptions from import duties on some products.
The BCG economy focuses on Thai industries and will have limited impacts on Australian exporters.
Thai investors have identified the potential for Australian smart farming practices to inform Thailand’s green economy transition. Green energy production, including biofuels and hydrogen, are also likely to feature.
The BCG economy reflects the growing demand from governments and consumers for more transparent and sustainable food production and processing. The BCG initiative has some similarities to other programs. This includes:
The Royal Thai Embassy, Washington DC has published an explainer on the BCG economic plan.
The Manual of Importing Country Requirements has details on Thailand’s import requirements for agricultural and seafood products.
Austrade has more information about the Thailand market.
The Australian Government’s network of Agriculture Counsellors provided information for this article. More information about the Agriculture Counsellor network, including contact details, is available on the Department of Agriculture, Water and the Environment website.
Learn about the United Nations’ Sustainable Development Goals.
Thailand market overview
Thailand is an upper-middle income country. Its pre-pandemic real GDP growth rate was 2.2 to 4.1% between 2015 and 2019.
The COVID-19 pandemic negatively affected the Thai economy, particularly through reduced tourism. The International Monetary Fund predicts the Thai economy to rebound by 5.2% in 2022.
Australia enjoys preferential access to the Thai market through two trade agreements:
- the bilateral Thailand-Australia Free Trade Agreement
- ASEAN-Australia-New Zealand Free Trade Area.
Thailand and Australia are parties to the Regional Comprehensive Economic Partnership (RCEP). The RCEP is expected to enter into force in 2022. Thailand is also considering applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
In 2020–21, Thailand was Australia’s 10th most valuable agricultural and seafood export market ($1.3 billion).
The value of Australian agricultural and seafood exports to Thailand has increased by 61% since 2016–17. The rise in value was driven by increased grain exports (see Figure 1).
Thailand is also major agricultural and fisheries exporter. In 2020–21, Thailand exported $1.2 billion of agricultural and seafood products to Australia. The leading exports were:
- pet food
- processed products such as sauces and products made from grains.
Australia’s 3 largest agricultural and seafood export commodities to Thailand (barley, wheat, and beef and veal) all saw a large increase in 2020–21. The increase coincided with a rise in the market value of all Australian exports to Thailand (see Figure 1) (ABS data).
In 2020–21, Thailand was Australia’s:
- 2nd largest barley market
- 8th largest wheat market
- 15th largest beef and veal market (ABS data).
Figure 1: Australia’s agricultural and seafood exports to Thailand