Thailand shelves 'Old Car for New Car' project due to scrap disposal issues

Prachachat•Politics•4d ago

Reader Briefing

Thailand's 'Old Car for New Car' incentive program is postponed due to an inability to manage and dispose of scrapped vehicles, drawing lessons from similar initiatives in the US, Germany, and Japan.

•Thailand's government has postponed the 'Old Car for New Car' project, which aimed to provide incentives for trading in old vehicles for new ones.
•The primary reason for the postponement is the lack of infrastructure, recycling facilities, and effective laws for handling end-of-life vehicles.
•Similar programs in the US and Germany faced significant issues with scrap car disposal, environmental pollution, and even criminal activity, while Japan succeeded by establishing a robust recycling framework beforehand.

Overview

•Thailand's government has postponed the 'Old Car for New Car' project, which aimed to offer tax benefits or subsidies for trading in old vehicles.
•The postponement is due to a bottleneck in the management and disposal system for scrapped cars, as Thailand lacks sufficient infrastructure, recycling plants, and supportive laws.
•The 'Old Car for New Car' project aimed to stimulate the economy and reduce PM 2.5 pollution by encouraging the purchase of new electric, hybrid, or electric motorcycles.
•If implemented without proper preparation, the project could lead to a 'toxic waste crisis' in Thailand.
•In 2009, the US implemented the 'Cash for Clunkers' program (CARS) with a budget of $3 billion, successfully scrapping over 680,000 vehicles.
•The US 'Cash for Clunkers' program resulted in an inability to store scrapped cars, causing severe environmental pollution from leaking fluids and chemicals.
•Germany's 'Abwrackprämie' program in 2009 offered a 2,500 Euro subsidy for vehicles over 9 years old, boosting sales but leading to organized crime and international fraud related to scrap car destruction certificates.
•Japan successfully implemented eco-car incentives by enacting the 'End-of-Life Vehicles Recycling Law' in 2005, four years prior to similar economic stimulus efforts, establishing a strong recycling infrastructure and a pre-paid recycling fee system.

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Key Entities

Place

United States(สหรัฐอเมริกา)ℹ️

A country that implemented the 'Cash for Clunkers' program.

Germany(เยอรมนี)ℹ️

A country that implemented the 'Abwrackprämie' program.

Japan(ญี่ปุ่น)ℹ️

A country that successfully implemented eco-car incentives due to its established recycling infrastructure.

Person

Barack Obama(บารัก โอบามา)ℹ️

The US President who launched the 'Cash for Clunkers' program in 2009.

Law

Car Allowance Rebate System (CARS)

The official name of the US government's 'Cash for Clunkers' program.

Abwrackprämie

The name of Germany's car scrappage incentive program launched in 2009.

End-of-Life Vehicles Recycling Law

The Japanese law enacted in 2005 that mandated a framework for recycling end-of-life vehicles.

Old Car for New Car(รถเก่าแลกรถใหม่)

The name of the Thai government's proposed incentive program for vehicle renewal.

Sodium Silicate(โซเดียมซิลิเกต)

A chemical used in the US 'Cash for Clunkers' program to permanently disable engines of scrapped vehicles.

Organization

National Bureau of Economic Research (NBER)ℹ️

A research institution whose work indicated that the US 'Cash for Clunkers' policy distorted market mechanisms.

Federal Criminal Police Office (BKA)ℹ️

The German law enforcement agency that investigated corruption within the 'Abwrackprämie' program.

TTAC

An automotive media outlet that reported on fraud and international criminal activity related to Germany's scrappage scheme.