Thailand: linking bonds to NDC targets

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Thailand has significantly raised its climate ambition. In late 2025, the government approved its new Nationally Determined Contribution (NDC) targeting a 47% reduction in net greenhouse gas emissions by 2035 (compared to 2019 levels) and committing to net zero by 2050.

In this research note, we assess Thailand’s updated NDC and related emission reduction targets. More investment is needed to decarbonise the economy, and capital markets will continue to play a key role in financing the transition.

The paper examines Thailand’s landmark Sustainability-Linked Bond (SLB), now the largest of its kind globally. We evaluate recent emissions and zero-emission vehicle registrations against performance targets. While the SLB has been a market success, our analysis finds the estimated option value is limited.

We also explore how performance-linked bonds tied to NDCs could evolve further and outline a proposal for a Thai transition linker. This instrument is designed to embed transition progress into bond pricing. If well structured, it could lower Thailand’s cost of capital while offering investors a hedge against a failed transition scenario.