Thailand’s EEC: Embracing the Circular Economy for Sustainable Growth | Tractus

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The Thailand Eastern Economic Corridor (EEC) is the result of a strategic initiative undertaken by the Thai Government beginning in 2015 to raise the nation to achieve high-income status within 20 years. The EEC special development zone encompasses three provinces: Rayong, Chonburi, and Chachoengsao. It targets investments and the development of innovative, high value industries in 12 target sectors including digital and smart electronics, aerospace, smart agriculture, and more.

In order to ensure that Thailand’s economic development goals are achieved in a sustainable and environmentally conscious manner, the EEC has adopted the BCG model, which integrates the concepts of a Bio-Economy, Circular Economy, and Green Economy.

The Bio-Economic model primarily focuses on the use of biotechnology and biomass to produce goods, services, or energy. Promoting the Thailand Bio-Economy will help Thailand realize increased value from its agricultural activities and natural resources, 80% of which are currently sold with minimal processing or “value-add.”

The Green Economy model aims at reducing environmental risk and scarcities through sustainable development while preserving the environment.

The Ellen MacArthur Foundation defines the Circular Economy as an “… economy that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.” While the Thailand EEC is pursuing all aspects of the BCG model, the Circular Economy is most applicable to the industrial investments and development targeted by the EEC.

To visually depict the circular economy concept, the Ellen MacArthur Foundation has developed the following diagram, which is nicknamed the “butterfly diagram.”

The butterfly diagram depicts the flow of materials, nutrients, components, and products of the economy, and includes an element of financial value.

The EEC has identified three drivers of Thailand’s Circular Economy:

1. Increased opportunities for investment and collaboration: Developed countries are seeking overseas opportunities to help them address climate change, circularity issues, and to offset their own carbon emissions.
2. Increased accountability for carbon emissions and environmental impacts in value chains: Decarbonizing domestic and overseas operations including supply chains and imported products.
3. Increased competitiveness of domestic markets: Ensure Thailand’s domestic growth targets while achieving COP26 climate change commitments including carbon neutrality and net zero emissions.

Thailand has identified four pillars to adapt international best practices to its circular economy framework.

• Design for Circularity: prioritize regenerative resources and use of the right materials, design for an appropriate lifetime, and design for extended use.
• Rethink Business Models: prioritize, reward, and support the circular economy through business models and economic incentives. Create greater value and align incentives that build on the interaction between products and services.
• Promote Collaboration: increase transparency and create joint value through collaborations throughout the supply chain, within organizations, and with the public sector and communities.
• Tech Enabled Circularity: Track and optimize resource use, strengthen connections between supply chain actors, and enable implementation of circular models through the use of digital platforms and technologies.

Manufacturers can optimize their value chains by focusing on three key dimensions of circularity.

1. Circular Value Chain: design for reuse and for safe recycling, to reduce raw material extraction. Use renewable or low-carbon technologies and increase energy efficiency in the production processes.
2. Product Life Extension: use sharing platforms to reduce the procurement of new products. Adopt modular production practices and localize the supply chain. Extend product life cycles through repair, resale, and remanufacturing of parts and components.
3. Recovery and Reuse: Develop a reverse sustainable supply chain, which recovers usable resources at the end of life of the product and returns them to the supply chain. Increase the availability of second-hand parts for secondary production.

Thailand has established a clear vision and strategy, incorporating the fundamentals of the Bio Economy, the Green Economy, and the Circular Economy, to evolve towards the Thailand 4.0 Innovation-Driven Economy and achieve “high-income status” by 2036 through environmentally and financially sustainable investments.

Authored by

Frank Timmons is a Senior Manager based in our Thailand office.