Legal Frameworks for Green Hydrogen Subsidies:  Comparative Lessons for Thailand’s Energy Transition

Chirat Keawchaum; Supannee Keawchaum

Authors

Chirat Keawchaum College of Innovation and Management, Songkhla Rajabhat University
Supannee Keawchaum College of Innovation and Management, Songkhla Rajabhat University

Keywords:

green hydrogen, legal framework, green premium, contract for difference, subsidies

Abstract

To achieve Thailand's net-zero emissions target, the deployment of green hydrogen is essential. However, its implementation is hindered by the significant green premium, a barrier driven by high operational expenditure (OPEX) rather than capital expenditure (CAPEX). This research article argues that Thailand's current legal framework, based on the Board of Investment (BOI)'s investment promotion measures, which focuses on the CAPEX incentive model, is structurally misaligned and incapable of solving this OPEX-driven problem. Therefore, a tax holiday on profit is valueless for an industry if a project cannot become profitable initially. The study applies a comprehensive comparative law analysis of subsidy models in the United States, the United Kingdom, Germany, and Japan to analyze the insufficiency of the BOI's measures and propose operable and bankable alternatives. It recommends that a new legal and financial framework for Thailand should be established with three integrated components: (1) a two-way Contract for Difference (CfD) for long-term risk diversification; (2) a GX Bond mechanism for debt financing, modeled after Japan and guaranteed by a future carbon tax; and (3) a Multi-Criteria Auction (MCA) to ensure project readiness and effective procurement. This paradigm shifts from providing passive incentives to becoming an active state partner is essential for creating a bankable market.

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