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Nepal Sectors

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

The transport sector of Nepal was responsible for 2 MtCO₂ of emissions in 2011.4 Vehicle ownership remains low in Nepal. However, rapid economic growth and urbanisation have led to its petroleum vehicle fleet to grow as well, at the annual rate of 14% between 1990 and 2018.14,25 This fast growth of the vehicle fleet has contributed to increasing emissions and air pollution as well as the country’s trade deficit.

In its 2020 NDC, Nepal aims to ensure that 90% of its new private and 60% of new public vehicle sales will be electric by 2030 and that transport-related emissions are expected to decline to 2.6 MtCO₂ by 2030.1 This target is in line with the modelled domestic emissions pathways benchmarks analysed in this project. Nepal’s LTS aims to reduce emissions from the sector to 1.04 MtCO₂ by 2050. It envisions doing so primarily through promotion of electric public and private transportation as well as electric freight transport, and introduction of clean fuels including biofuels and hydrogen fuel cell technology. The LTS also aims to increase the renewable energy capacity of the country to 53.2 GW by 2050 with the aim of electrification of major end-use sectors, including the transport sector.5

While the proportion of electric vehicles in the country is currently negligible – less than 1% of the vehicle fleet – this share is expected to increase significantly as the government enacts policies in line with its NDC targets.14 For example, last year the government reduced customs duties for electric vehicles.20 As Nepal imports almost all of its vehicles and exerts heavy customs taxes, this measure is expected to boost electric vehicles sales in the country’s price-sensitive vehicle market.14

1 Government of Nepal. Second Nationally Determined Contribution (NDC). 0–21 (2020).

2 Climate Action Tracker. Nepal | Target Update Tracker. (2020).

3 Ministry of Forest and Environment. National Level Forests and Land Cover Analysis of Nepal using Google Earth Images. 46 (2019).

4 Central Department of Environmental Science Tribhuvan University. Nepal’s GHG Inventory for Third National Communication. (2017).

5 Government of Nepal. Nepal’s Long-term Strategy for Net-zero Emissions. (2021).

6 Climate Analytics. 1.5°C national pathway explorer — India (sectors: power). (2022).

7 Nepal Electricity Authority (NEA). Nepal Electricity Authority: A review in fiscal year 2020/2021. (2021).

8 Nepal Electricity Authority (NEA). A year in review (fiscal Year 2016/2017). (2017).

9 Nepal Electricity Authority (NEA). A year in review (fiscal Year 2017/2018). (2018).

10 Nepal Electricity Authority (NEA). A year in review (fiscal Year 2018/2019). (2019).

11 Nepal Electricity Authority (NEA). A year in review (fiscal Year 2019/2020). (2020).

12 IEA. Data & Statistics – IEA. (2021).

13 Government of Nepal. Nepal’s 15th Five-Year Plan, (Fiscal Year 2019/20 – 2023/24). (2019).

14 Ministry of Forests and Environment (MoFE). Assessment of Electric Mobility Targets for Nepal’s 2020 Nationally Determined Contributions (NDC). (2021).

15 National Planning Commission Central Bureau of Statistics. Report on the Nepal Labour Force Survey. (2019).

16 Ministry of Finance. Economic Survey 2020/21. (2021).

17 Ministry of Finance. Economic Survey 2018/19. (2019).

18 CBS. Annual Household Survey 2016/17. (2017).

19 Nepal Rastra Bank. Macroeconomic Indicators Of Nepal. (2021).

20 Government of Nepal. Nepal Fiscal Budget 2021/22. (2021).

21 Ministry of Forests and Environment (MoFE). Assessment of Electric Cooking Targets for Nepal’s 2020 Nationally Determined Contributions (NDC). (2021).

22 FRTC. National Land Cover Monitoring System of Nepal. (2022).

23 ESMAP. Nepal – Multi-Tier Framework (MTF) Survey – MTF_Nepal_Executive_Summary.pdf – ENERGYDATA.INFO. (2019).

24 Water and Energy Commission Secretariat. Final Report on Energy Sector Vision 2050 A.D. (2013).

25 DoTM. Details of Registered Vehicles till End of Falgun of Fiscal Year 2075-76.

26 See the Climate Action Tracker for assumptions on the conditional NDC assessment. It was not possible to estimate the impact of all of the listed mitigation actions, which means the total reduction under the conditional NDC could potentially be higher than our estimates and high uncertainty remains regarding the NDC assessment.

27 The 1.5°C compatible range is based on the Paris Agreement compatible pathways assessed by the IPCC SR1.5 filtered with sustainability criteria and downscaled from regional to national level. The median (50th percentile) to 5th percentile are provided here. Underlying global pathways and detailed methodology are made available here.

28 In analysed global-least cost pathways assessed by the IPCC Special Report 1.5°C, the energy sector assumes already a certain amount of carbon dioxide removal technologies, in this case bioenergy carbon capture and storage (BECCS). While this is unlikely to be developed in Nepal, already benefiting from a high level of land sink, these pathways tend to attribute technological CDR regardless of countries potential. Thus, the level of sinks indicated in the analysed are rather a lower estimate of what the country would need to balance by 2050.

29 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for countries, they underestimate the feasible space for developed countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.

30 Benchmarks across countries cover combined share of hydrogen, district heating and electricity for the buildings sector. In the case of Nepal, hydrogen and district heating are unlikely to happen in Nepal which has a high renewable potential and could rely mostly on electricity which is the main component of these benchmarks in the case of Nepal.

31 Benchmarks across countries cover combined share of hydrogen, biomass and electricity for the industry sector. In the case of Nepal, hydrogen and biomass are unlikely to happen in Nepal which has a high renewable potential and could rely mostly on electricity which is the main component of these benchmarks in the case of Nepal.

32 See the Climate Action Tracker for details assumptions. It was not possible to estimate the impact of all of the listed mitigation actions, which means the total reduction under the conditional NDC could potentially be higher than the estimates.

33 Global cost-effective pathways assessed by the IPCC Special Report 1.5°C tend to include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches, and often rely on rather conservative assumptions in the development of renewable energy technologies. This tends to result in greater reliance on technological CDR than if a faster transition to renewables were achieved. The scenarios available at the time of this analysis focus particularly on BECCS as a net-negative emission technology, and our downscaling methods do not yet take national BECCS potentials into account.

Nepalʼs energy mix in the transport sector

petajoule per year

Scaling
SSP1 Low CDR reliance
2019203020402050100150
SSP1 High CDR reliance
2019203020402050100150
Low Energy Demand
2019203020402050100150
High Energy Demand - Low CDR reliance
2019203020402050100150
  • Coal
  • Natural gas
  • Oil and e-fuels
  • Biomass
  • Biofuel
  • Biogas
  • Electricity
  • Heat
  • Hydrogen

Nepalʼs transport sector direct CO₂ emissions (of energy demands)

MtCO₂/yr

Unit
123456719902010203020502070
  • Historical emissions
  • SSP1 Low CDR reliance
  • High Energy Demand - Low CDR reliance

1.5°C compatible transport sector benchmarks

Direct CO₂ emissions and direct electrification rates from illustrative 1.5°C pathways for Nepal

Indicator
2019
2030
2040
2050
Decarbonised transport sector by
Direct CO₂ emissions
MtCO₂/yr
5
2 to 4
2 to 3
0 to 3
2048 to 2067
Indicator
2019
2030
2040
2050
Share of electricity
Percent
0
3 to 7
9 to 14
20 to 22
Share of biofuels
Percent
0
1 to 2
1 to 5
2 to 11
Share of hydrogen
Percent
0
1 to 17
38 to 43
48 to 78

Footnotes