The Finance Ministry is leveraging funds from an emergency borrowing decree to subsidize the transition of internal combustion engine (ICE) public service vehicles to electric vehicles (EVs). This initiative aims to reduce reliance on fossil fuels, support palm oil prices, and improve the income of domestic palm oil farmers, according to Finance Minister Ekniti Nitithanprapas.
In addition to promoting EVs, the government will also support public service vehicles running on B20 biodiesel. The program specifically targets intercity buses, taxis, and public vans due to their high passenger volume.
A proposed vehicle scrappage scheme to incentivize the replacement of old ICE vehicles with EVs has not yet been finalized, as the existing EV3.5 support program, which offers a 50,000 baht subsidy per EV purchase, remains in effect. Under the new transition program for public transport, participating vehicles will be required to permanently retire their existing gasoline-powered vehicles and de-register them from the Department of Land Transport’s system to prevent their re-entry into service. Discussions with the Transport Ministry are ongoing regarding the specifics of this requirement.
The Industry Ministry is also involved in discussions concerning the dismantling of retired vehicles into parts. This process will be handled by private companies with expertise in vehicle recycling and dismantling.
The recent energy crisis, exacerbated by the conflict in the Middle East, has impacted the Thai economy, prompting the government to issue an emergency decree authorizing 400 billion baht in borrowing. This borrowing is split into two tranches: 200 billion baht for economic relief through the “Thai Chuay Thai Plus” program, and the remaining 200 billion baht allocated to support the transition from fossil fuels to clean energy.
A screening committee, chaired by the finance permanent secretary, has been established to evaluate project proposals from government agencies seeking to utilize these funds. Jindarat Viriyathavikul, director-general of the Public Debt Management Office, stated that of the initial 200 billion baht earmarked for the co-pay scheme, 138 billion baht has already been disbursed, with an additional 30 billion baht scheduled for borrowing in the next one to two months. If this 30 billion baht remains unused, it may be reallocated to clean energy transition projects, provided they align with the borrowing plan’s objectives.
The screening committee is conducting a thorough evaluation of projects seeking financing under the energy transition program to ensure they meet the law’s objectives and deliver maximum public benefit. All borrowed funds must be used efficiently and cost-effectively, with a disbursement deadline of September 2027.