35 ASIAN LEGAL BUSINESS – OCTOBER 2023 WWW.LEGALBUSINESSONLINE.COM levy. On the same day, the government also introduced a carbon tax. Indonesia, which is the world’s fourth-largest producer of coal and Southeast Asia’s biggest gas supplier, also rolled out its first regulation that prohibits new coal-fired power plant (CFPP) development, and introduced sustainability obligations for financial services institutions, issuers and public companies. More recently, in September, Indonesian President Joko Widodo launched the country’s first carbon emission credit trading market, which aims to fund cuts in greenhouse gas emissions and become a major participant in the global carbon trade. “Numerous stakeholders, both from the public and private sectors, have shown great interest in carbon trading and are actively developing carbon trading projects tailored to their business. This situation presents a great opportunity for law firms to make substantial contributions by structuring the carbon trading projects, meticulously drafting and negotiating the transaction documents for carbon trading,” says Sastrawijaya. The Indonesian government is also currently preparing a new renewable energy bill and revising its national energy policy. The challenge for lawyers is to stay abreast of new and upcoming policy and regulatory developments in the energy transition market, Sastrawijaya explains. “Every party involved, despite their high interest, is still figuring out the best approach to serve their distinct interests. This is where we, as lawyers, come in. We can offer our expertise to assist them in developing and structuring their projects in a way that aligns with the current regulatory frameworks while also anticipating forthcoming legal changes. The unfolding energy transition era requires us to think innovatively within the bounds of the existing regulations and the evolving market dynamics.” “We envisage a variety of projects and deals coming up in the decarbonisation space, spanning from the development of carbon trading business to CFPP phase-out and renewable energy development,” Sastrawijaya adds. THAILAND At the United National Climate Change Conference 2021 in Glasgow, Thailand’s Prime Minister Srettha Thavisin announced the country’s commitment to carbon neutrality by 2050 and net zero greenhouse gas emissions by 2065. While the country has made shifts to its national energy policy to increase the share of renewables in its energy mix, most of the legislative and regulatory initiatives that would have a more significant impact in reducing carbon emissions are in the planning or proposal stages, says David Beckstead, a partner at Thai law firm Chandler MHM. These include the creation of thirdparty access (TPA) codes by the country’s government power utilities - the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority - in order to permit power generators to utilise their transmission and distribution infrastructure to sell to customers at a distance. “Once the TPA Codes are adopted and fully implemented, it is likely that many new business models will be developed to permit businesses operating in Thailand to purchase a greater share of their power form renewable sources. If properly implemented, this may result in significantly increasing the volume of renewable projects (mainly solar) being developed in Thailand over the coming decades,” Beckstead says. The country’s regulators and policymakers are also working on rules to regulate carbon capture, utilisation and storage, and a draft climate change law, which could establish regulatory authority for government agencies to enact specific rules needed to tackle carbon emissions. Law firms in Thailand, Beckstead says, have been seeing an increasing number of engagements involving the financing and setting up of renewable infrastructure in the country. “A successful round of renewable energy procurement has just concluded, with 4.88 GW of projects being awarded. Most of the projects were groundmounted solar, solar + battery storage, and wind power. Further, an additional 3.66 GW has been approved for government procurement, meaning we are likely to see more renewables projects being developed in the short- to midterm.” For law firms, there is great potential to assist clients in drafting and negotiating major project agreements, such as EPC contracts and wind turbine supply agreements. We assume that many project sponsors will be seeking project financing on a non-recourse or limitedrecourse basis, meaning there will be opportunities for law firms to advise on these financing deals in 2024 and beyond. ENERGY “Once the TPA Codes are adopted and fully implemented, it is likely that many new business models will be developed to permit businesses operating in Thailand to purchase a greater share of their power form renewable sources. If properly implemented, this may result in significantly increasing the volume of renewable projects over the coming decades.” — David Beckstead, Chandler MHM
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