Nepal

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GH2 Country Portal – Nepal

Green Hydrogen Vision

Nepal envisions green hydrogen as a transformative solution to achieve energy security, decarbonise its economy, and harness its vast renewable energy potential. With abundant hydropower resources, the country aims to produce green hydrogen using clean and sustainable electricity from its hydropower plants. This aligns with Nepal’s commitment to addressing climate change, reducing dependency on imported fossil fuels, and transitioning to a low-carbon economy. 

Green hydrogen is a key driver for decarbonising sectors such as transport, industry, and agriculture while opening energy storage and export opportunities. Nepal aspires to leverage international partnerships, attract investments, and foster innovation to develop a green hydrogen ecosystem that supports economic growth and environmental sustainability. Nepal seeks to position itself as a regional leader in clean energy solutions by integrating green hydrogen into its energy strategy. 

National Strategy

Nepal's 2024 Green Hydrogen Policy marks a significant step toward establishing a sustainable and low-carbon energy future by leveraging the nation's abundant renewable resources, particularly hydropower. The policy's primary objectives include reducing dependence on imported petroleum products, achieving carbon neutrality, and promoting economic growth through developing and utilising green hydrogen.  

Key Components of the Policy: 

1. Promotion of Green Hydrogen Production and Utilization: The policy encourages the production of green hydrogen using renewable energy sources, aiming to integrate it into various sectors such as transportation, industry, and domestic energy consumption.  

2. Infrastructure Development: It emphasizes the need to develop the necessary infrastructure for the production, storage, and distribution of green hydrogen, including the establishment of hydrogen refuelling stations and related facilities.  

3. Research and Development (R&D): The policy underscores the importance of R&D in advancing green hydrogen technologies, encouraging collaboration between academic institutions, industries, and government agencies to foster innovation and build a skilled workforce.  

4. Regulatory Framework: It calls for establishing clear regulatory guidelines to ensure safety, environmental sustainability, and quality standards in the production, storage, and utilization of green hydrogen.  

5. Incentives and Investment: The policy proposes incentives such as tax breaks, financing facilities, and land allocation to attract domestic and international investments in the green hydrogen sector.  

6. International Collaboration: Recognizing the global nature of green hydrogen development, the policy encourages partnerships with international organizations and countries to share knowledge, technology, and best practices.  

Implementation Strategies 

  • Pilot Projects: The policy supports the initiation of pilot projects to demonstrate the feasibility and scalability of green hydrogen technologies in Nepal. For instance, the Hydrogen Empowered Hydroelectric Grid (HyHEG) Project is piloting green hydrogen for cooking in rural municipalities.  
  • Capacity Building: It emphasizes training programs to develop a skilled workforce capable of supporting the emerging green hydrogen industry.  
  • Public Awareness: The policy aims to raise public awareness about the benefits of green hydrogen to garner support for its adoption and integration into daily life.  

Capacity and Capacity targets

  1. Promote Production: Foster investment in green hydrogen facilities through tax reductions, subsidies, and streamlined permits. 
  2. Encourage Utilisation: Advance green hydrogen uses in transportation, industrial applications, and fertiliser production, with initiatives like hydrogen refuelling stations and subsidies for hydrogen-powered vehicles. 
  3. Develop Framework: Establish regulations for the production, storage, transportation, and usage of green hydrogen, ensuring safety compliance and environmental standards. 

Impact Targets

  • Energy Security: The policy aims to reduce dependence on imported fossil fuels, enhancing energy security. 

  • Environmental Sustainability: Green hydrogen production emits no greenhouse gases, aiding decarbonisation and climate action. 

  • Economic Growth: The policy can create new industries and jobs in green hydrogen production and storage, boosting economic development. 

Policy Spotlight

Nepal Rastra Bank (NRB) has directed banks and financial institutions (BFIs) to integrate climate change measures into their investment decisions. This step emphasizes the financial sector's role in climate action. The 'Nepal Green Finance Taxonomy' aims to guide BFIs in issuing loans based on defined guidelines. As per NRB's reference document, the taxonomy is crucial for enhancing sustainable finance and effectively mobilizing green investments. While not mandatory, this recommendation marks a positive start, aiding in building climate-resilient infrastructure and efficiently mobilizing resources. The central bank's policy will influence private sector investments in combating climate change, helping Nepal better prepare for its impacts. 

Nepal faces growing resource demand due to intensive growth and urbanization. To tackle climate change, the country has developed national policies and regulatory frameworks, including the Environment Protection Act and the National Climate Change Policy. At COP-26 in Glasgow, Nepal set a target for net zero carbon emissions by 2045 and estimates needing USD 77 billion for adaptation and sustainable development by 2030. NRB’s directive seeks to mobilize private sector financial resources for a climate-resilient future. 

Financing

No major investments declared

Government green hydrogen lead 

Ministry of Energy, Water Resources and Irrigation