Nepal’s energy sector is a significant and growing source of emissions in the country. In 2021, fossil fuels comprised of ~25% of the country’s energy mix. Meanwhile, electricity contributed to only ~4% and renewables to ~3% of this share. Biomass was used to meet the remaining 69% of the country’s energy needs.,
In 2017, over half of the households in the country depended on firewood as their primary cooking fuel while a third of them use liquified petroleum gas (LPG). Trends show that biomass cookstoves are being steadily replaced by LPG cookstoves.
The country’s vehicle fleet, particularly two-wheelers, are also rapidly increasing with urbanisation. Petrol and diesel consumption, mostly used in the transport sector, grew at a pace of over 21% per year between 2008 and 2019.
Coal, which makes up a very small percentage of the total energy mix, is mostly used in brick kilns and cement industries.
Nepal has no proven reserves of fossil fuels and imports LPG, gasoline and coal from India. These imports are the biggest contributors to Nepal’s trade deficit and contribute significantly to its emissions as well., To address these, the country plans to increase its renewable energy capacity ten-fold to 15 GW by the end of the decade and to 53.2 GW by 2050 and promote electrification of end-use sectors such as cooking and transportation.,
According to its 2021/2022 national budget, Nepal plans to phase out all fossil fuel-based light vehicles and replace them with electric vehicles by 2031, in addition to installing 500 charging stations throughout the country. Furthermore, the government has offered tax incentives for those that convert fossil fuel-based light vehicles to electric ones.
While the government has provided subsidised electric cookstoves in rural areas, adoption remains low mostly due to difficulties in peak load management, lack of power infrastructure capable of handling the extra load, and absence of after-sales market services.