Bangkok Bank recommends exporters of agricultural products decarbonize and stop deforestation in compliance with the new EU regulations to be effective at the end of the year while strengthening its role as a ‘trusted partner’ providing knowledge and financial support for 80 years
July 24, 2024
Bangkok Bank recommends exporters of seven types of agricultural products to the European Union countries speed up business transition to decarbonize and prevent prevent deforestation before new regulations take effect at the end of this year. To reinforce its role as a ‘trusted partner’ supporting knowledge and low interest loans, the Bank invited experts to provide insights into the impact of the regulations and help customers identify opportunities in global markets that enable them to grow their businesses sustainably.
Bangkok Bank Executive Vice President in charge of Business Banking Mr. Than Siripokee said Bangkok Bank as a “trusted partner” has continuously provided customers and Thai entrepreneurs with knowledge and awareness of changing global markets so they can adapt accordingly. The second seminar of the year titled “Sustainable Era: The Thai Agriculture Sector’s Transition to Sustainability” aims to develop Thai farmers to be part of global supply chains and urged businesses to transform to achieve sustainable growth while maintaining environmental responsibility. Businesses, especially exporters, will need to comply with new EU laws and regulations which are designed to reduce carbon emissions and create sustainable and efficient use of resources, such as The Carbon Border Adjustment Mechanism (CBAM) and The EU Deforestation Regulation (EUDR). Effective from December 30, 2024, these laws will impact seven commodity groups – wood, rubber, oil palm, cocoa, coffee, soy, and cattle.
The effects of climate change are becoming more severe and many countries are introducing more regulations. Given this trend, exporters need to keep a close watch on positive and negative effects. If businesses can quickly make adjustments it may create trading opportunities. However, if businesses are not prepared, they may limit how they can do business. Therefore, Bangkok Bank encourages exporters to keep abreast of the latest developments and the changing business environment. Meanwhile, the Bank is ready to provide special interest loans such as Bualuang Green Loan, Bualuang Green Solar Energy Loan and Bualuang Transformation Loan to equip business operators with sufficient capital to prepare their businesses to cope with the challenges presented by global trends in a strong and sustainable manner.
"Throughout the past 80 years Bangkok Bank as a "trusted partner" has not only supported entrepreneurs with loans to transform traditional businesses to digital and environmentally-friendly enterprises, it has also served as a knowledge hub for entrepreneurs by updating them on changing trends and global regulations. Businesses can no longer remain as they are and they must adapt to the changing environment. If businesses can exceed requirements, they will be protected against all odds while the value of their products will be higher and market expansion will be more feasible. The Bank organizes study tours to showcase businesses that have successfully transformed their operations with the aim of inspiring other businesses to prepare themselves for emerging challenges in a strong and sustainable manner,” said Mr. Than.
Deputy Director of the Center for Applied Economics Research, Faculty of Economics, Kasetsart University Assoc.Prof. Witsanu Attavanich, Ph.D. said, “Changes in global climate conditions will intensify occurrences of El Niño and La Niña phenomena which will see Thailand face increasingly severe heat and drought. Moreover, rainy seasons will face more erratic rainfall, all of which will significantly affect the agricultural sector. It is anticipated that by 2100 the effects of climate change will cause substantial economic damage to Thailand, resulting in a reduction of per capita income by over 50% annually. This forecast does not include the risks associated with transitions after countries start to implement measures to mitigate environmental impacts such as CBAM and EUDR, which will be key restrictions that prevent Thailand from exporting goods to the European market.”
“According to a study, the Thai agricultural sector remains fragile as it faces the aging society at a more rapid rate than the national average rate, while young people are also leaving the sector at an accelerating rate. Additionally, those people in agriculture have lower levels of education compared to those in non-agricultural sectors. We also found that 80% of people in agriculture own less than 20 rai of land, and only 26% have access to irrigation systems. Furthermore, climate change will cause greater damage to non-irrigated agriculture than to irrigated areas. It is estimated that the cumulative damage from 2011 to 2045 will be valued at approximately 0.609-2.850 trillion baht, resulting in the increase in the inequality gap.”
“Farmers still have very little understanding that any transition to reduce environmental impacts will have a significant cost for Thai businesses. Therefore, the government and corporate sectors must play a role in educating these farmers and incentivize them to truly develop themselves, rather than simply providing free funds with no conditions. If they do not adapt, they will be exposed to climate change risks in the future,” said Assoc. Prof. Wissanu.
Mr. Chalerm Kokanutaporn, Vice President of FTI Chonburi Chapter and Chief Executive Officer of Thai Eastern Group Holdings Public Company Limited, stated that the agricultural sector needs to quickly adapt and increase its production per rai to meet market standards. Meanwhile, the government sector should support or create an environment conducive to doing business and make sure . information is up-to-date and accessible to everyone. Additionally, the criteria or definition of SME entrepreneurs should be revised so they can receive government benefits and support to expand their businesses. Large corporations can also support small Thai entrepreneurs by providing them with knowledge. For example, Bangkok Bank regularly holds seminars and invites experts to provide market updates and share experiences, helping small entrepreneurs understand and adapt.”
“Financial institutions are crucial to the growth of the business sector. To ensure sustainable business growth, the government should expedite the implementation of a taxonomy to provide clear criteria for financial institutions to assess loans and offer special interest rates to entrepreneurs. This will incentivize entrepreneurs to move towards a green economy, thereby driving the Thai economy and society towards sustainability and keeping pace with global changes,” said Mr. Chalerm.
“To achieve business success and sustainable growth it is crucial to look for new opportunities, continuously learn about the business environment, and have a clear business plan to create adaptive strategies and always view every change or challenge as an opportunity. Nowadays, the size of a business, whether big or small, does not matter as ‘Fast movers will win over slow movers.’ For example, as a fast mover, we seized the opportunity from the depreciation of Thai baht during the Tom Yum Kung economic crisis in 1997 to develop new products and expand our market abroad. At the same time, we committed to developing business standards to build investor confidence, create growth, and list on the stock exchange. By driving the organization according to sustainable development guidelines, Thai Eastern Group has become one of the major producers and distributors of natural rubber and crude palm oil in the eastern region and we are also a producer of renewable energy in the form of integrated bioenergy in the Eastern Economic Corridor area.”
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