Biomass energy policy and entrepreneurship with regional learnings

Rationale

Nepal produces millions of tonnes of agricultural and forestry residues annually, yet most are burned or left unused, causing pollution and fire hazards.

Existing energy and environmental policies do not adequately address biomass energy production, quality standards, or market integration.

Successful models from India and China show that with targeted policy support and incentives, biomass energy can reduce fossil fuel dependency, create jobs, and improve air quality.

About the event

The consultation on biomass energy policy reform will bring together policymakers, researchers, private sector representatives, civil society, and development partners to discuss the urgent need for a robust biomass energy policy in Nepal.
The two-day event will focus on addressing policy gaps, showcasing viable biomass energy solutions, and drawing lessons from regional best practices in China and India. It aims to pave the way for sustainable, scalable, and inclusive biomass energy development aligned with Nepal’s climate commitments and development priorities.

Objectives

• Identify gaps and opportunities in existing biomass energy policies and regulations in Nepal.
• Analyse potential pathways for scaling biomass energy, including institutional, financial, and market mechanisms.
• Explore lessons from regional and global best practices for application in Nepal.
• Strengthen coordination among government agencies, private sector, academia, and civil society for biomass energy development.

This event is part of Action Area: Air, under the Strategic Group: Climate and Environmental Risks. It is delivered through the Himalayan Resilience Enabling Action Programme (HI-REAP), supported by the United Kingdom International Development.

Alignment with national and global goals

The consultation supports Nepal’s NDC targets, the Renewable Energy Subsidy Policy, and the Sustainable Development Goals (SDGs)—particularly SDG 7 (Affordable and Clean Energy), SDG 13 (Climate Action), and SDG 15 (Life on Land).

Expected outcomes

• Draft roadmap for scaling biomass energy in Nepal with clear short-, medium-, and long-term actions.
• Policy recommendations for updating and integrating biomass energy into Nepal’s national energy strategy.
• Enhanced stakeholder alignment and commitment to biomass energy development.
• Shared understanding of the economic, environmental, and social benefits of biomass energy.

Background

Nepal remains heavily dependent on imported fossil fuels to meet its energy needs, despite abundant potential for alternative energy sources, particularly from agricultural and forestry residues. Current practices, such as the open burning of crop residues and unmanaged forest litter waste valuable resources, contribute to severe air pollution, and increase the risk of wildfires.

Transforming these residues into biomass fuels offers a triple win: reducing greenhouse gas emissions, improving air quality, and creating green jobs. Several initiatives, including those supported by ICIMOD and the Biomass Energy Alliance Nepal (BEAN, 2025), have demonstrated viable solutions. However, without an enabling policy framework, these efforts remain small-scale and fragmented.

While Nepal’s Nationally Determined Contributions (NDCs) and renewable energy targets acknowledge the role of biomass, current policies are outdated and lack clear mechanisms for scaling production, ensuring quality standards, or integrating biomass into national energy planning. Lessons from India and China show that targeted policy interventions combined with private sector incentives can rapidly expand biomass energy markets and reduce fossil fuel dependency.