Nepal’s state-run oil monopoly, Nepal Oil Corporation (NOC), is preparing to enter the hydrogen economy by producing green hydrogen from its abundant hydropower resources—marking a notable shift for a country that relies heavily on imported fossil fuels for transport and cooking.
With hydrogen-powered transport already tested on university grounds and a national policy now in place, Nepal is aiming to translate its renewable power potential into strategic energy independence.
According to Dr. Chandika Prasad Bhatta, Managing Director of NOC, the initial phase will focus on using hydrogen in transportation, with expansion into cooking and industrial applications envisioned.
This electricity-to-hydrogen pathway, when powered by hydroelectricity, qualifies as green hydrogen and aligns with decarbonization goals. Hydrogen’s high energy density—1 kg can provide up to 50 kilowatt-hours of energy and drive a vehicle up to 70 km—offers a competitive edge over battery systems for certain mobility and off-grid industrial applications.
Hydrogen’s potential in Nepal is not limited to transport. The government’s recently launched Green Hydrogen Policy outlines broader use cases: as feedstock in fertilizers, for industrial heating, and for cooking fuel. At present, LPG imports account for a significant share of Nepal’s energy trade imbalance. Substituting this with domestically produced hydrogen could reduce foreign currency outflows and enhance national energy security.
However, the transition faces structural hurdles. Despite Kathmandu University’s successful test of a hydrogen-powered Hyundai vehicle, regulatory approval for road use is still pending. Experts warn that without targeted incentives and regulatory clarity, private-sector engagement will remain limited.
Nepal’s Green Hydrogen Policy offers fiscal and infrastructural incentives to attract early movers. It includes provisions for land access, transmission line construction, carbon trading mechanisms, and the deployment of substations—all essential for scaling production and integrating hydrogen into national energy systems.
But the gap between planning and implementation remains wide. Former Chief Secretary Baikuntha Aryal acknowledged the initial cost barriers yet sees long-term export potential. “It may be costly at first, but Nepal can eventually export hydrogen,” he said, suggesting pipeline exports as a possibility—a long-term scenario that would require regional infrastructure cooperation and standardization.
Meanwhile, the policy’s impact will hinge on the extent to which it addresses practical constraints such as water purity requirements, electrolyzer efficiency, safe storage solutions, and the creation of demand through industrial policy.
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