Developing a circular economy is central to Thailand’s future growth strategy. The government’s ambition is to leave the middle-band GDP bracket by 2037, but it must balance planned growth against strict environmental targets. 

Arup was asked by the Thai government to work with the International Finance Corporation (IFC), an organisation providing national government with analysis on driving private sector growth. Our remit was to study the possibility of a circular economy across three of the country’s most strategic sectors: food and agriculture, electrical and electronic equipment, and construction. 

We developed a report with policy and non-policy recommendations which identified high impact opportunities through data and stakeholder insights. Our evaluation of these opportunities showed billions of dollars of potential revenue and cost savings, along with significant positive environmental impacts. It also identified the constraints Thailand must overcome to realise these opportunities.

Thailand is now taking a leading regional role in fostering the circular economy, integrating circular economy-enabling measures into its plans for economic and social development.

Opportunities for green growth in Thailand

Population growth and an increasing middle-class of consumers places unprecedented pressure on Thailand’s natural resources to meet future demand. The circular economy is a way to reinvent the future in order to create sustainable growth and prosperity. 

After reviewing Thailand’s progress and benchmarking it against countries leading the circular economy, countries with economic ties to Thailand, and those countries with similar economies, we identified a host of opportunities Thailand could pursue. 

Arup led this first of a kind circular economy assessment, bringing together quantitative analysis of the economic benefits with qualitative proposals on the policy changes required for a circular economy to thrive. To leverage their experience, we commissioned Arup to write a guidance note on how to undertake these assessments in other countries.

Etienne Raffi Kechichian

Senior Private Sector Specialist, International Finance Corporation

We then prioritised these opportunities according to their economic and environmental potential, those that best align with Thailand’s ambitions, and their ‘fit’ with target sectors. We prioritised those which impacted the full value chain most. We also evaluated measures at an individual business level to ensure the benefits and actions were meaningful to business owners and  government decision-makers. 

Our recommendations focused on five opportunities for each strategic sector, which could realise benefits of US$23.1bn, or four per cent of Thailand’s projected GDP, by 2026. 

Overcoming the barriers to circularity

Successfully moving to a circular model requires systemic change for Thailand’s economy. With such a broad reaching approach, thinking about individual sectors in silos serves no purpose. Instead, we examined the different factors which limit the development of a circular economy by sector and across sectors. 

We found there was a lack of knowledge and understanding of the concept across public and private sectors and academia. This makes it challenging for governments, investors and the private sector to unify their ambitions. There was also a lack of clarity around the business case for a circular economy.

Developing a circular economy makes great sense environmentally, but articulating the business model that underpins private sector growth is key to educating the many multinationals and banks yet to significantly invest in the concept. Any circular economy is constrained by the physical and digital infrastructure available, and developing these is essential to delivering the opportunities it promises both practically and for business.

Our analysis identified the key activities and collaboration required to overcome these barriers and realise the substantial gains on offer. Our recommended actions ranged from revising regulations and standards to incorporating a circular economic approach in public procurement.