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Bhutan Current situation

What is Bhutanʼs pathway to limit global warming to 1.5°C?

Emissions profile

Bhutan’s forests currently absorb more carbon than other sectors emit and the government’s updated NDC includes a goal to remain carbon neutral.1 In 2015, Bhutan had a carbon sink capacity of 7.8 MtCO₂e, which is a cornerstone of its carbon neutrality pledge.2

However, in its third national communication to the UNFCCC, Bhutan outlines the risk of not achieving its carbon neutrality pledge due to increasing emissions from the energy, industrial processes, agriculture, and waste sector. Under a business-as-usual (BAU) scenario, emissions from these sectors will surpass Bhutan’s sink capacity between 2041 and 2045 under various economic growth scenarios.2

Bhutan’s share in global GHG emissions is very small, but since 2010, its emissions (excluding emissions from land use and forestry sector) have increased by roughly 50%. The energy and industrial sector together accounted for 66% of the country’s total emissions in 2015.2

In 2015, the transport sector was responsible for around 60% of energy-related emissions, with oil use contributing to this high share.2 Bhutan’s GDP from manufacturing sector grew by around 28% between 2013–2019 and as a result, industrial process emissions have also grown by around 60%.3,4 The cement sector is responsible for half of the industrial process emissions and a quarter of Bhutan’s total emissions. The sector has, however, become an important source of export revenue for the country.2,5

1 Royal Government of Bhutan. Kingdom of Bhutan Second Nationally Determined Contribution. (2021).

2 Royal Government of Bhutan. Third National Communication to the UNFCCC. (2020).

3 World Bank. Manufacturing, value added (constant 2015 US$) – Bhutan. (2021).

4 Gütschow, J., Günther, A. & Pflüger, M. The PRIMAP-hist national historical emissions time series v2.3 (1750-2019). (2021) doi:10.5281/zenodo.5175154.

5 OEC. Cement in Bhutan. OEC – The Observatory of Economic Complexity. (2020).

6 IRENA. Energy Profile: Bhutan. International Renewable Energy Agency. (2021).

7 CEA. Note on cooperation with Bhutan.(2021).

8 Ministry of Economic Affairs. Bhutan sustainable hydropower development policy 2021. (2021).

9 IRENA. Kingdom of Bhutan: Renewables readiness assessment. International Renewable Energy Agency. (2019).

10 Gyeltshen, N. Bhutan ramps up its solar energy ambitions. The Third Pole. (2022).

11 Ministry of Information and Communication. Low Emission Development Strategy for Surface Transport 2021. (2021).

12 Zangpo, T. Bhutan to explore hydrogen as an alternative fuel source. Kuensel Online (2022).

13 Lhaden, Y. 70% of vehicles to be replaced by EVs by 2035. Kuensel Online. (2022).

14 Climate Action Tracker. Bhutan. July 2023 update. Climate Action Tracker. (2023).

Bhutanʼs current GHG emissions

MtCO₂e/yr

Displayed values

By sector

  • Transport
  • Industry (energy use)
  • Other
  • Fugitive emissions
  • Power
  • Industry (processes)
  • Agriculture
  • Waste
  • LULUCF
Energy (9%)⟵ LULUCF negative emissions−100%

By gas

  • CH₄
  • N₂O
  • CO₂
0⟵ LULUCF negative emissions−100%

Sectors by gas

Energy
098%0
Agriculture
081%0
Industry (processes)
00

Energy system

Bhutan’s primary energy is dominated by renewables which account for 82% of total supply.6 Hydropower constitutes 100% of Bhutan’s power generation,6 but the current hydro capacity has reached only 10% (2.3 GW) of its total potential of 23 GW. Bhutan’s existing hydropower projects are primarily developed with international support, mainly from India.7 To reach the full potential of this energy source, the Bhutanese government recently launched the Sustainable Hydropower Development Policy.8

Even though Bhutan’s energy demand met through hydro power, studies recommend the Bhutanese government to diversify the renewable energy supply to support economic growth, industrial development and employment. Diversification would also enable Bhutan to reduce the risk of relying on a single energy source, particularly during winter when water levels in reservoirs drop.9

In its second NDC, the government communicated its intent to install 71.11 MW capacity of utility scale solar and 23 MW of wind energy between 2020–2028. Bhutan is planning to ramp up solar capacity installations with a vision of adding 300 MW in the next two years, with support from the Asian Development Bank (ADB). The initial process of site identification for the projects has started.10

Within the energy sector, the Bhutanese government has initiated several policies to incentivise the electrification of the end-use sectors, such as the Bhutan Electric Vehicle Roadmap (2020–2025), and Low Emissions Development Strategy (LEDS) for Surface Transport. The high share of private vehicle use is an important concern. To address that, the LEDS for Surface Transport outlines measures like increasing shared mobility, the promotion of non-motorised vehicle use, an annual cap on vehicle import and sales, and expanding rapid mass transit.11

Bhutan is also considering the viability of renewable hydrogen fuel and the government has initiated the preparation of the Green Hydrogen Roadmap and pilot projects.12

Targets and commitments

Economy-wide targets

Target type

Base year emissions target

NDC target

Conditional NDC Target

  • Maintain carbon neutrality (incl. LULUCF) conditional on receiving adequate support for implementation.
    • A BAU emissions level after implementation of the sectoral mitigation potential (conditional upon international financial support) presented in the LEDS would lead to emissions level of 1.8-1.9 MtCO₂e excluding LULUCF by 2030 (“see the Climate Action Tracker for full estimation).14

Market mechanism

Bhutan welcomes cooperative approaches in market and non-market mechanisms.

Long-term target

In its second NDC, Bhutan declares the goal to achieve net zero emissions by 2050, a condition it already meets given that it is currently a net negative emitter.1

Sector coverage

EnergyTransportIndustryWasteAgricultureLULUCF

Greenhouse gas coverage

CO₂CH₄N₂O

Sectoral targets

Power

From 2020 to 2028:1

  • Under construction hydropower capacity of ~3GW expected to be come online before 2030.
  • Installing 71.11 MW of utility scale solar and wind energy.
  • Installing roof mounted solar PV on 300 rural households.
  • 80 kW of decentralised solar PV plant
  • Installing over 50 Solar Water Heating Systems (SWHS) of 1,000 litres per day (LPD) capacity on public buildings (schools, hospitals, monasteries).
  • Building a 500 kW mini-hydel (small hydro project) for remote Lunana community.
  • A waste to energy feasibility study for Thimphu.

Renewable generation capacity:9

  • 20 MW by 2025 excluding hydro (5 MW solar, 5 MW wind and 5 MW biomass)

Buildings

Cumulative mitigation potential 3 MtCO₂e between 2020 and 2030:1

  • Rolling out solar PV on buildings
  • Replacing LPG and firewood by electricity
  • Scaling energy efficient and green building design features
  • Switch to efficient street lighting
  • Rolling out energy efficient appliances
  • Solar water heaters

Waste

Cumulative mitigation potential 0.7 MtCO₂e between 2020 and 2030:1

  • Increasing composting and recycling
  • Improving wastewater management

Agriculture

Cumulative mitigation potential 0.7 MtCO₂e between 2020 and 2030:1

  • Switching from synthetic to organic fertilisers, 5% annually.
  • Improved agricultural practices of 14,971 ha.
  • Increased biomass through increased perennial crop production, 17,495 ha.
  • Small and medium scale domestic biogas production 10,254 nos.
  • Reduction of continuous rice flooding 200 ha/year.
  • Improved dairy cattle production through breed improvement and feeding management 8,333 nos.

Industry

Cumulative mitigation potential 0.9–1.1 MtCO₂e between 2020–2030:1

  • Replacing fossil origin reductants with renewable charcoal.
  • Waste heat recovery.
  • Refusing derived fuels in cement plants.
  • Increasing energy efficiency in production processes.
  • Direct hot charging- integrated production.
  • Improving energy efficiency of electric motor systems.
  • Conversion of diesel boilers to electric boilers.

Transport

Cumulative mitigation potential 5.3 MtCO₂e between 2020–2030:1

  • Scaling mass transit opportunities though improvements in bus systems such as the introduction of open-bus rapid transit (BRT) network (both electric and diesel), as well as a light rail transit.
  • Promoting electric passenger vehicles sales, in line with targets to reduce internal combustion engine vehicle sales.
  • Set a target of 70% of passenger vehicles will be electric by 2035.13
  • Developing low emission freight transport system for heavy and commercial trucks and freight trains.
  • Incentivising non-motorised transport system through public bicycle systems and improved sidewalks and crosswalks.
  • Improving fuel efficiency in internal combustion engines through mainstreaming stringent vehicle and emission standards.
  • Managing private vehicle demand through shared mobility, improved traffic system management, scaling carpooling, ride sharing and car rental services, and restricting imports of internal combustion engine cars from 2030 by introducing annual import quota system.

By 2030:1

  • Maintaining 436 Mt of forest carbon stock outside protected areas.
  • Maintaining 201 Mt of forest carbon stock in protected areas, representing 51.44% of land area and 31% of forest area.
  • Initiating and promoting an agro-forestry pilot project within 15 acres.
  • Undertaking a comprehensive wetland assessment for understanding organic carbon content.

Footnotes