The clean energy trap Thailand can’t seem to escape

In my work with clean energy entrepreneurs across Thailand and Southeast Asia, I have sat in enough founder meetings, investor conversations, and government consultations to see patterns that don’t show up in official data. One of them has been troubling me for a while, and the US-Iran war and its impact on Thai fuel prices have made it impossible to look away.

As part of research into Thailand’s clean energy investment landscape, I did deep interviews earlier this year with three startups and two leading venture and corporate venture funds. When I asked where their capital was going, they said that all their climate investment for 2025 was allocated outside Thailand.

Image credit: Timmy Loen

One fund even reported a portfolio that was 80% US and 15% Europe, but nothing for Thailand. When I asked why, the answer was consistent.

As one corporate investor put it: In four to five years of looking, they have not found a climate startup in Thailand – or anywhere in Southeast Asia – that met their criteria.

“There isn’t sufficient capital. There isn’t sufficient incentive. So we don’t see world-class [climate] startups emerging in this region,” the investor said.

I have heard versions of that statement many times. With diesel peaking at 50.54 baht (US$1.55) per liter recently from 29.94 baht (US$0.92) in February, what strikes me now is how this observation describes a loop that Thailand has been stuck in and is now paying a price for.

Thailand imports 57% of its crude oil from the Middle East, so there was no domestic cushion when the Strait of Hormuz effectively closed after the US and Israel bombed Iran. The Thai government managed the emergency well enough, releasing reserves, banning exports, and suspending fuel levies.

Local clean energy capacity could have outperformed all these measures, but that capacity should have been built over a decade ago. The reasons why it was never built are less obvious than they appear, and they continue to plague Thai climate startups today.

A pipeline problem

Data from Tracxn shows just US$338 million in disclosed funding for Thai climate tech firms over the past 10 years. The investors I spoke with were not wrong in their observation: Thailand has not yet generated enough investable climate tech companies.

But what’s really worth asking is why this is the case.

A pattern became clear as I worked with founders. The startups that don’t make it past the earliest stage don’t necessarily lack technical capability or market understanding.

See also: SEA’s climate tech funding is freezing, but energy tech stays hot

Instead, they run out of money as they spend on early development and wait for reimbursement from public grant programs. This is typically how the Thai government structures innovation support: You spend first, document the costs, and then wait.

Don’t wait for perfect policy