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Ethyl alcohol, also known as ethanol, is a biofuel obtained primarily from biomass materials, including sugarcane and maize and starch-bearing agricultural products. It is a volatile colorless liquid that serves as an environmentally-friendly fossil fuel substitute since it releases fewer pollutants during use. The mixture of bioethanol and gasoline produces biofuel that both lowers greenhouse gas emissions and decreases national dependence on petroleum products. It is used in varying proportions in different countries, such as E10 (10 percent ethanol, 90 percent gasoline) and E20 (20 percent ethanol, 80 percent gasoline). Moreover, ethanol serves as a vital component in manufacturing alcoholic drinks and pharmaceutical medicines, as well as industrial solvents, sanitisers and disinfectants. The demand for ethanol is increasing globally as countries transition toward sustainable energy solutions. With Nepal’s reliance on imported fuels and its agricultural potential, ethanol production presents an opportunity for economic growth and energy security.

Historical background

The idea of blending bioethanol in petroleum products started in 2003 when the Ministry of Industry, Commerce and Supplies (MoICS) ordered the mixing of bioethanol in gasoline. Even blending equipment was installed at the Nepal Oil Corporation's Amlekhgunj depot. However, the initiative stalled because there was no pricing mechanism or purchase agreement in place. In the meantime, plans to extract bioethanol from jatropha largely failed despite the fiscal year 2009-10 budget seeking to promote jatropha farming for biodiesel production. 

While the 13th plan (2013-14 to 2015-16) pledged to formulate necessary policies for biofuel production, the Rural Energy Policy of 2006 strongly emphasised identifying possible biofuel production locations. Initiatives to incorporate bioethanol into petroleum products were announced in the Policy and Programs for the 2014-15 fiscal year, and the following year, private sector involvement was encouraged. Despite these legislative frameworks, no noticeable advancements have been achieved.

Recent initiatives

In 2024, a new wave of momentum appeared for the local production of bioethanol in Nepal. Minister for Industry, Commerce and Supply, Damodar Bhandari, made a significant announcement on the bioethanol blending strategy on 9 Sept 2024. The rules governing the blending of bioethanol and petroleum products are already in place and this action is anticipated to generate domestic jobs and significantly cut daily petroleum usage. Setting purchase prices from producers is one of the tactics that the NOC has been entrusted with creating for bioethanol production and marketing. One major bottleneck has been the delay in setting these prices, although new guidelines are meant to speed up the procedure.

Advantages galore

It is estimated that Nepal has the potential to produce 100 kiloliters of bioethanol every day. The country produces around 3m tons of sugarcane annually and other relevant biomass resources, such as maize, in large quantities for bioethanol production. Hence, the establishment of bioethanol plants would allow for the stabilization of sugarcane prices, minimization of post-harvest losses with more sustainable marketing strategies, thereby providing relief to farmers. Local bioethanol production would accrue economic advantages in the long run. The production of bioethanol in Nepal would, therefore, reduce the dependence on imports, saving millions of rupees each year. 

Bioethanol production would also generate thousands of jobs in rural sectors, thus fostering economic development and curbing migration to urban centers. Costs of bioethanol could be reduced to Rs 80–90 per litre if produced in Nepal, therefore relieving consumers with cheaper fuel. It will also contribute toward Nepal’s commitment to curbing climate change by erasing CO2 emissions and paving the way for cleaner energy alternatives. 

Besides, there is a reasonably good prospect for Nepal to export ethanol to neighbouring countries, especially India, where the bioethanol market is now booming, and an increasing number of states are announcing purchase prices for bioethanol for blending with gasoline. The establishment of ethanol plants does entail investment in infrastructure, research and policy formation, but these gains outweigh the costs by far in the long run.

Nepal relies heavily on petroleum products from abroad to meet its energy requirements. According to the Department of Customs, approximately 306,229 kiloliters of petrol worth Rs 26.45bn was imported during the first half of the fiscal year 2023-2024, compared to 281,970 kiloliters worth Rs 28.55bn in the same period this fiscal year. This growing dependence on petrol significantly strains Nepal’s foreign exchange reserves and increases trade deficits. Bioethanol blending in petroleum products will help Nepal save billions of rupees by reducing petrol imports. If the nation uses a 10 percent ethanol blend (E10) in petrol, Nepal can reduce the import of gasoline by 10 percent, resulting in enormous economic gains. With 306,229 kiloliters of existing imports, blending the ethanol would save around 30,622 kiloliters of petrol, amounting to a financial saving of around Rs 2.64bn.

Blending bioethanol with petrol in Nepal can significantly reduce CO₂ emissions and fuel imports and bring economic gains. One liter of petrol generates 2.3 kg of CO₂ approximately, and thus Nepal's annual consumption of 306,229 kiloliters of petrol generates approximately 704,326 metric tons of CO₂ emissions. 

With a 10 percent ethanol blend (E10), petrol imports can be reduced by 30,622 kiloliters, reducing CO₂ emissions by 70,432 metric tons annually. This transition would also enhance air quality, reduce fossil fuel reliance and assist in meeting Nepal’s climate goals. Moving to domestic ethanol production aligns with a circular economy using sugarcane, maize and agricultural waste and creating value-added byproducts like animal feed and organic fertilizers. Further, this industry would create thousands of jobs in agriculture, ethanol manufacturing, transport and research, assisting rural farmers and enhancing Nepal’s economy. With ethanol blending policies, Nepal can save billions of dollars in fuel import costs, reduce pollution and develop a green, self-reliant energy sector.

Global trends in blending

Bioethanol blending policies vary significantly across countries, reflecting each nation's goals for energy security, environmental sustainability and agricultural development. The government adopted an aggressive blending policy in Brazil, a world leader in bioethanol production. The Proálcool Program that began during the 1970s formed the foundation for the E100 (pure bioethanol) flex-fuel cars widely utilized today. E27 is already mandated in gasoline today with the intention of increasing this even more. Success in Brazil is partly due to its massive sugarcane output, which is highly well-adapted for bioethanol manufacturing. In the US, bioethanol blending is regulated by the Renewable Fuel Standard (RFS), which mandates increasing bioethanol blending into gasoline over time. The most commonly available blend is E10, with E15 and E85 available for flexible-fuel vehicles. The US has a highly developed corn bioethanol sector, though controversy remains about environmental effects and food versus fuel. In the EU, Germany and France, for example, employ various ratios of bioethanol blending that prefer to range between E5 and E10 to meet climatic aspirations and mitigate greenhouse gas emissions.

The European Union Renewable Energy Directive (RED II) seeks to promote renewable energy consumption in biofuels with specific requirements for using bioethanol in the transport sector. Moreover, India has set the ambitious target of blending 20 percent bioethanol (E20) by 2025, mainly founded on utilizing its resource-intensive sugarcane sector. The government has supported bioethanol production through better procurement prices for sugar mills, incentivizing the addition of bioethanol plants. These different bioethanol blending policies put the growing global acceptance of bioethanol as a core solution to reducing greenhouse gas emissions, promoting energy independence and encouraging local economies through agricultural and industrial growth.

Challenges and the path ahead

Although there are obvious merits, there are still no specialized bioethanol production plants in Nepal. Uncertain government policies and incentives toward bioethanol production are not a good motivator for private investments. Also, a steady supply of raw materials is needed for bioethanol production to initiate. At the same time, the agricultural sector of Nepal faces challenges such as varied crop yields, the absence of irrigation facilities and dependence on imported chemical fertilizers. These factors create uncertainty when considering bioethanol production investments.

One of the most important factors is that a blending policy is mandatory for bioethanol. The Nepal Oil Corporation (NOC) has been testing the blending of bioethanol later into fuel, but large-scale implementation has thus far not happened due to physical constraints, policy hurdles and the unwillingness of fuel dealers to accept blended fuels. The most important fuel source in Nepal's distribution network comes from India, which already has a blending policy. Without encouraging policy enforcement and significant investments in infrastructure capabilities for bioethanol distribution, Nepal will continue to depend on imported bioethanol instead of promoting its domestic production. Furthermore, there is no dedicated infrastructure in Nepal for the storage and transport of bioethanol. Unlike fossil fuels, bioethanol is very combustible and quickly absorbs moisture, indicating the need for dedicated storage tanks and pipelines. Therefore, blending bioethanol in Nepal is a grand but not yet completed plan.

To reap the benefits of bioethanol production, the government should consider initiatives to attract investment, build infrastructure and implement policies for bioethanol blending. The government should extend support for bioethanol production projects by providing subsidies and tax incentives to ensure investors a reasonable return. Working with the private sector, farmers and research institutions would help develop a sustainable bioethanol production ecosystem. If Nepal were to set up production facilities for bioethanol successfully, it could ultimately gain the benefits of lowering its fuel import bill, providing jobs, increasing farmers' incomes and providing energy security. Furthermore, the production of bioethanol is also in line with Nepal's commitment to carbon emission reductions and promoting cleaner forms of energy. Therefore, with strong policy support, it seems feasible for Nepal to establish a flourishing bioethanol sector that will be environmentally sustainable and drive economic growth.

Nepal has ample renewable energy resources, which creates a feasible opportunity for hydrogen production. There is still a worldwide debate on the best medium for producing hydrogen, where solar and hydropower are the key competitors. For Nepal, achieving a balanced energy mix is essential, and solar energy has the potential to play a larger role in the 10 percent share of alternative energy in the overall energy mix. Nepal has significant solar energy potential, comparable to its hydropower resources, making it an attractive option for diversification. This article evaluates the pros and cons of hydrogen production using solar and hydroelectric energy, with a comprehensive techno-economic comparison to determine the most suitable approach for Nepal.

Solar potential

Various studies demonstrate that Nepal has a strong solar energy potential. The Investment Board Nepal (IBN) issued its ‘Energy’ report in April 2024 which states that Nepal receives sufficient solar radiation to produce between 3.6 and 6.2 units of electricity per square meter area. The daily solar energy intensity across Nepal's surface reaches an average of 4.7 kWh per square meter. Statistical data demonstrates that solar energy possesses great potential for implementation. According to a study by the Alternative Energy Promotion Center (AEPC) and the German Agency for International Cooperation (GIZ), the estimated total technical potential for solar energy production in Nepal is 432 GW (432,000 MW), which is tenfold higher than the economic and technical potential of hydropower (42,000 MW).

Current status

The renewable energy sector of Nepal exhibits rapid growth through solar energy development with eight new solar plants with a combined capacity of 90 MW starting operations in FY 2023-24. The nation remains committed to developing its power mix by establishing strategic Power Purchase Agreements (PPAs) to add more solar power capacity. The Nepal Electricity Authority (NEA) uses competitive bidding to acquire solar energy, setting a price ceiling of Rs 5.94 per unit. In a recent initiative, the NEA invited bids for 800 MW of solar projects and the evaluation and PPA signing for these projects will occur in FY 2024-25. The move seeks to strengthen Nepal's energy supply system by adding solar power to the current hydroelectricity dominance while ensuring power stability during winters when hydroelectricity generation decreases. 

The NEA intends to acquire 800 MW of solar energy in two years following the bidding period as smaller projects (under 10 MW) will start generating electricity within 18 months and larger projects will reach commercial operation in two years. According to the White Paper of the Ministry of Energy, Water Resources and Irrigation published on 8 May 2018, by capping solar contributions to 10 percent of the total installed capacity through Power Purchase Agreements (PPAs), Nepal is accelerating for a more balanced energy future, ensuring consistent electricity supply while embracing renewable sources to meet a rising demand.

Current status of hydropower

Nepal’s power sector depends fundamentally on hydropower operations. As of February 2025, the installed hydropower capacity in Nepal has reached 3,255 MW while economic potential exceeds 42,000 MW. The country aims to generate 28,500 MW of hydroelectricity by 2035, of which 17,000 MW will be exported to neighboring countries India and Bangladesh through eight international transmission lines as per an announcement from Minister for Energy, Water Resources, and Irrigation, Dipak Khadka. 

Nepal’s commitment to electricity exports will not prevent it from maintaining surplus electricity that can be efficiently used for hydrogen production. Hydropower provides a dependable source of electricity for hydrogen electrolysis at scale because its energy output remains stable, unlike solar power which faces daily and seasonal changes. This consistent nature of hydroelectric power provides a solid base for Nepal’s hydrogen economy development.

Comparison of solar vs hydroelectric hydrogen production

The global competition for green hydrogen production is accelerating, so renewable energy sources serve as the core solution and solar and hydropower are dominant leaders in this transition. Each offers distinct advantages and faces unique challenges in this evolving landscape. Multiple important factors can be used to conduct an extensive analysis.

• Energy generation stability

Hydropower delivers uninterrupted power, which makes it a better hydrogen production source than solar energy because solar power depends on sunlight availability and shows intermittent fluctuations. The continuous operation of hydropower systems runs 24/7 to deliver steady energy streams. Solar energy generation operates within daylight hours with a seven hours daily average in Nepal, forcing the implementation of storage units or backup power for stable hydrogen production.

• Land use efficiency

The competition between these power systems depends heavily on how efficiently land resources are utilized. Each megawatt of solar PV farm needs 0.02 square kilometers of land space for installation, thus presenting challenges in Nepal's geographically restricted areas. Hydropower requires approximately 0.1 km² per MW and helps to capitalize the existing water resources and infrastructure. A strategic solution involving NEA land at hydro project locations for solar power installations would create a hybrid energy system that maximizes both technologies for green hydrogen production.

• Project timeline and operational lifespan

Solar PV and hydropower projects differ significantly in terms of construction duration, capacity range and operational lifespan. The installation period for Solar PV projects having a capacity below 10 MW in Nepal spans from six months to one year but projects between 10 MW and 50 MW require one to two years to complete. The duration of operation for these projects extends to 25 years from the Power Purchase Agreement date according to existing legal provisions but lacks any provisions for further extensions. In contrast, the duration for constructing hydropower projects depends on project size along with design complexity. 

Construction practices in Nepal indicate that projects without tunneling under 20 MW require a two-year duration while projects with tunneling need 2.5 years for completion. Projects with capacities between 50 MW and 100 MW need between 3 and 4 years to build, yet larger installations that surpass 100 MW require five years to complete because they present additional construction challenges. Hydropower plants exist for 50 to 100 years when maintenance is carried out correctly. Private sector projects receive their first 35-year operating license from government authorities, which can extend the authorization for another 15 years. The comparison of solar and hydropower shows that solar delivers swift implementation while hydropower maintains enduring operational capabilities, thus both systems represent fundamental elements for Nepal’s developing energy sector.

• Production efficiency

The capacity factor of a power plant represents the ratio of actual energy output to its maximum potential. A higher capacity factor ensures stable and predictable electricity supply that supports uninterrupted operation of hydrogen electrolyzers. For comparison, a 1 MW solar PV system operating at 20 percent capacity factor would generate 1,752 MWh annually to produce 35,040 kg of hydrogen when electrolyzed at 70 percent efficiency. In contrast, a 1 MW hydroelectric plant with 50 percent capacity factor produces 4,380 MWh of annual energy output, which results in hydrogen production of 87,600 kilograms. This means that hydropower can produce approximately 2.5 times more hydrogen per MW than solar power. The large-scale production of hydrogen through hydro-based methods proves more efficient in Nepal because hydropower constitutes a major portion of its energy mix. Hydropower benefits from solar energy integration since it provides additional flexibility and strengthens the electricity supply system.

• CAPEX

Capital investment is a key factor in selecting a renewable energy pathway for hydrogen production. Solar power plant installations in Nepal cost between Rs 60m-Rs 70m per MW but hydropower construction requires approximately NPR 80m per MW before adding the cost of electrolyzer units. The price gap between hydroelectric and solar-based hydrogen production indicates that hydropower stands as a more economically efficient option for big projects across Nepal because it delivers extended operational time and dependable output. However, solar energy remains an attractive option for diversification and hybrid energy solutions.

• OPEX

For hydroelectric power plants, the annual operation and maintenance expenses amount ranges from one percent to 2.5 percent of initial capital investment to cover turbine maintenance alongside dam maintenance and sediment removal. In contrast, solar power plants incur an initial O&M cost of two percent of the capital cost in the first year and then increase annually by five percent of the initial two percent. The maintenance expenses include operations on the panels and inverters in addition to the monitoring system maintenance. The initial maintenance costs of solar power are lower, but future expenses will rise because regular servicing becomes essential to preserve operational efficiency.

Cost comparison of hydrogen production

The cost of hydrogen production varies significantly depending on the energy source and country-specific strategies. The government of Chile intends to achieve annual green hydrogen production of 160m tons by 2050 through its extensive hydropower resources. The National Green Hydrogen Strategy of Chile envisions that the country will achieve 5 GW electrolyzer capacity by 2025 and 25 GW by 2030 with the goal to lower production costs to $0.8–$1.1 per kilogram by the end of the decade. 

Meanwhile, the United Arab Emirates (UAE) uses its extensive solar resources to become a dominant global player in solar-powered hydrogen manufacturing. Through its renewable energy flagship Masdar, the UAE plans to grow hydrogen market share globally to 25 percent by 2030 and increase its annual production to 1m tons. The UAE has established a strategy to decrease production expenses for hydrogen to $1-$2 per kilogram by 2030. The evaluation demonstrates that hydro-based hydrogen production in Chile generates lower production expenses yet solar-powered hydrogen from the UAE establishes itself as a competitive and scalable option for international hydrogen markets.

Pathway to green hydrogen leadership

Nepal can establish itself as a regional leader in green hydrogen production through its extensive hydropower resources combined with solar power integration, which creates a strong and resilient energy combination. Hydropower provides an efficient and cost-effective production method for large-scale hydrogen generation because it delivers stable renewable energy, which supports long-term sustainability and energy security. The combination of solar energy with hydropower enables better power flexibility and decentralizes hydrogen producing operations. Strategic investments, policy support and international collaborations will be crucial in unlocking Nepal’s hydrogen potential thus positioning the country as a key player in the global green hydrogen economy.

Agriculture is one of the most important sectors in Nepal, contributing 23.95 percent to the nation’s GDP and providing jobs to more than 60 percent of the population. However, the sector faces several problems, mainly food security, attributed to the high usage of imported fertilizers, most of which are urea. In fiscal year 2024-25, Nepal plans to import around 550,000 tons of chemical fertilizers, with urea constituting a bulk. Moreover, the Nepal government has allocated a budget Rs 27.95bn as subsidy to ensure a steady supply of fertilizers to the farmers. Hence, the government bears nearly two-thirds of the fertilizer price to help alleviate the pressure on farmers. However, constant supply breaks and bad distribution channels threaten food production in Nepal, necessitating the construction of a urea manufacturing plant to boost food security.

JICA study report 1984

Nepal’s attempt at local production of fertilizer began in 1984, when Japan International Cooperation Agency (JICA) conducted a feasibility study on the production of 275 TPD green urea plants in Nepal. The primary focus was to produce green hydrogen via water electrolysis, one of the percussors for urea. However, Nepal’s hydropower capacity was only 156 MW at that time, making electricity per unit price very high. The study concluded that the water electrolysis method was only feasible if the electricity price was reduced by 40 percent, and hence the idea was abandoned.

IBN report 2015

The Infrastructure Development Corporation, Karnataka (IDeCK) and the Institution of Agricultural Technologists (IAT), along with Shah Consultant International Limited, Nepal, under the Office of Investment Board Nepal (OIBN) conducted the 2015 feasibility study on 700 kT/year urea plant, which became the second major attempt to develop a urea fertilizer plant in Nepal since the 1984 JICA study. The study evaluated Nepal’s escalating fertilizer import situation as price instabilities and supply chain breakdowns endangered national food security. The analysis assessed three production methods: electrolysis, coal gasification and natural gas steam reforming for hydrogen production. The study concluded that using natural gas as feedstock made the urea plant feasible. The research team recommended that Nepal should import natural gas from Jagdishpur (India) through pipelines followed by plant construction on a 400-acre site in Dhalkebar Dhanusha as the country lacks natural gas extraction capabilities. The evaluation showed that a natural gas-based plant costs $665m, coal gasification totalled $953m and electrolysis reached $1,305m. The research base considered that the government of Nepal would import natural gas at a fixed price from India for smooth operations of the urea plant. 

IBN comparative report 2021

The Investment Board Nepal (IBN) has prepared a report that examines two urea production methods, including natural gas-based and water electrolysis-based (green hydrogen) systems. The analysis for 701,250 T/year urea demonstrates that natural gas-based manufacturing meets financial criteria through cost-effective capital investments totaling $665m and production expenses amounting to $278 per ton. However, this process requires a 108-km gas pipeline from India. The risks associated with Indian natural gas imports become substantial due to two factors: India will deplete its gas reserves by 2040, and gas produced in the country will increase in price to double its current levels until then. This creates long-term supply uncertainty coupled with high costs. The water electrolysis process is environmentally friendly yet remains uncommercial because it comes with billion-dollar capital expenses ($1.3bn) and produces hydrogen at $656 per ton, requiring 450 MW of daily electrical power and CO₂ capture from cement facilities. According to the report, Dhalkebar stands out as the optimal location because of its existing infrastructure, and the authors endorse establishing a public-private funding partnership. The future development of green ammonia through water electrolysis requires subsidized electricity costs to become viable. The research demonstrates that local fertilizer production would decrease Nepal’s dependence on imported materials and subsidy programs, yet essential infrastructure development and supportive policies need implementation.

KU feasibility report 2022

The Green Hydrogen Lab at Kathmandu University evaluated the possibility of generating 200 kT/year of green urea in 2022 and submitted its findings to the Ministry of Agriculture and Livestock Development. The feasibility study primarily focused on the surplus hydroelectricity in Nepal, which serves as the key benefit for local green hydrogen production through water electrolysis, thus ensuring the proposed urea plant operates independently from Indian natural gas imports. The study promoted domestic renewable-based solutions for urea production as it recognized the risks and price instability of importing natural gas along with the difficulties of managing border pipelines. The use of green hydrogen instead of fossil fuels in plant operations would make Nepal a pioneer in sustainable industrial development through substantial carbon emission reduction. The research demonstrated how green urea production qualifies as carbon credit material suitable for international offset programs. The new income source generated from green hydrogen operations would increase project profitability, thus attracting foreign investment. The report advocates for government incentives, policy backing, and public-private partnership (PPP) to realize the successful deployment of the green urea plant that will strengthen Nepal’s food security, energy independence and climate commitments.

GGGI report 2024

In 2024, the Global Green Growth Institute (GGGI) Nepal performed extensive research on green fertilizer production in Nepal by creating Di-Ammonium Phosphate (DAP) and Urea from green hydrogen. Researchers analyzed renewable energy integration into hydrogen production by obtaining 100 MW from the Nepal Electricity Authority (NEA). The study focused on the production of 103,950 T/year green urea and 264,000 T/year DAP. WindPower Nepal and Hydrovert Services led the project forward by performing a Pre-FEED study to evaluate the technical aspects, economic viability and infrastructural requirements for building a green hydrogen-based fertilizer plant. The study assessed the Bhalu Chira site’s characteristics by examining its ability to accommodate the proposed facility through assessments of land resources and logistical and accessibility factors. The total capital cost of the green urea plant was calculated to be $284.88m, and the capital cost of DAP was around $268.26m. Green hydrogen utilization within the project will improve Nepal's food production independence alongside carbon footprint reduction initiatives. The research findings will create a base for upcoming green fertilizer industry policy decisions and investment decisions in Nepal.

Hariharpurgadhi pre-feasibility study 2024

In 2024, Hariharpurgadhi rural municipality (Sindhuli district) signed a Memorandum of Understanding (MoU) with Kathmandu University to conduct a pre-feasibility assessment of a 200 kT/year green urea production facility. The project's central point involved extracting carbon dioxide from cement factories in Hetauda before transporting it through a constructed pipeline to the urea production facility. The research demonstrated pipeline transport of CO₂ was not economical because of substantial construction expenses and complex transportation requirements. The pre-feasibility study recommended the construction of a cement industry along with the green urea plant at Hariharpurgadhi as the solution to maintain a continuous carbon dioxide supply for urea synthesis. The project could develop a sustainable industrial cycle through this combined strategy to convert cement-based CO₂ emissions into synthesized ammonia using green hydrogen. The research demonstrated that the proposed solution could help Nepal decrease its dependence on imported fertilizers and advance carbon capture and utilization (CCU) practices that support a sustainable agricultural sector.

Conclusion

A green urea plant establishment in Nepal will produce lasting advantages since the government has to allocate billions of rupees for agricultural sector fertilizer subsidies every year. The domestic production of urea from green hydrogen combined with local carbon dioxide supplies enables Nepal to decrease expensive import costs while establishing independent fertilizer availability. The stable fertilizer prices, along with prompt distribution, will help farmers decrease expenses while improving their productivity levels. National food security will be enhanced through this project because it delivers dependable fertilizer supplies that produce elevated crop harvests and safeguard against worldwide supply chain interruptions. The initiative allows Nepal to develop carbon credits from green hydrogen and industrial emission capture activities, supporting domestic climate goals and accessing international carbon financing. Further, Nepal could generate carbon credits that can be traded internationally, creating an additional revenue stream. Establishing a green urea plant will lead to employment opportunities at various stages, including construction, plant operation and maintenance, stimulating economic growth in the region. Moreover, a circular economy practice in Nepal can develop when setting up a cement sector alongside the urea plant to convert its CO₂ emissions into valuable products instead of atmospheric release. These strategic developments will empower Nepal’s agricultural activities while decreasing government financial burdens and realizing sustainable growth through new industrial development alongside environmental management.

The race to decarbonize the transportation sector has brought two primary contenders to the forefront for heavy-duty applications: hydrogen-powered vehicles (HPVs) and battery electric vehicles (BEVs). Road transport, especially that of commercial vehicles such as trucks and buses, and other large vehicles is pivotal to the global supply chain and public transportation but at the same time contributes highly to emissions of greenhouse gases. Both technologies promise reduced emissions, but their viability for heavy-duty transport varies based on energy density, infrastructure, operational range and cost.

Energy density

Energy density is a critical factor for heavy-duty vehicles since large vehicles have very high energy requirements. Hydrogen fuel cells utilize both compressed hydrogen gas and liquid hydrogen, which possess energy densities of approximately 120 MJ/kg and 141 MJ/kg, respectively. This in turn gives hydrogen vehicles high energy densities allowing for large ranges without compromising payload capacity. In contrast, lithium-ion batteries used in BEVs have an energy density of approximately 0.2 MJ/kg. The lower energy density implies that very large and heavy batteries are needed for long ranges, which may decrease the payload. Advances in battery technology such as solid-state batteries are an example of working on the mentioned gap but are yet to be developed fully.

Capital and maintenance costs

In the acquisition and maintenance cost comparison for heavy-duty transport, hydrogen trucks, which cost approximately $350,000 for a 40 kg fuel tank capacity, are much costlier than electric trucks that, on average, cost $150,000 for a 150-kWh battery pack, because of the immaturity of fuel cell technology. But in the long run, hydrogen trucks are more cost-effective in terms of total cost of ownership (TCO) because the fuel cell has a much longer lifespan than batteries and has lower maintenance costs than electric trucks. Although electric trucks are more economical at purchase, they have higher maintenance costs over time, primarily due to battery degradation and eventual replacement.

Refueling and charging infra

Refueling time is a major operational consideration, and since hydrogen vehicles can be refueled in 5-15 minutes, they outperform electric vehicles. For example, the Shell refueling station in Long Beach, California, has a capacity of about 1 MW at 700 bar high-pressure and can refuel 50 hydrogen-powered vehicles with 30-40 kg tank capacity per day. But charging of BEVs takes much longer compared to refueling of HEVs. High output fast chargers—DC chargers over 350 kW like in Tesla’s V4 supercharging station for its semi trucks with massive ~900 kWh packs—can charge a battery to 80 percent within half an hour and limit vehicle throughput to 10-15 per station per day. Standard charging mechanisms include AC chargers, which usually take many hours and therefore are not efficient for heavy-duty transport with tight schedules. Hydrogen refueling stations are currently expensive to establish, costing $1-2m per station with a capacity of 500 kW to 1 MW. EV charging infrastructure is more modular, with Level 2 stations i.e. AC fast charging stations (6 kW to 20 kW) costing $2,000-$5,000 and fast-charging stations (25 kW to 350 kW) costing $50,000-$100,000.

Operational range and cost

Current hydrogen-based heavy-duty vehicles need to be refueled between 500-800 km, although prototypes such as the Toyota Kenworth T680 fuel cell truck have been produced with the capability of covering more than 1000 km. Hydrogen vehicles contain fuel tanks of 30-40 kg of hydrogen and are built to work under a pressure of up to 700 bar. The cost of hydrogen fuel is between $6- $10 per kg, meaning that the operating cost per kilometer is between $0.12 and $0.20 for a conventional heavy-duty truck. Medium and heavy-duty BEVs, like the Tesla Semi, based on battery capacity can drive 500-800 km using a battery with a maximum capacity of 1 MWh. In other countries, it costs $0.10 to $0.20 per kWh to charge the electricity, hence the operation cost of $0.10-$0.15 per km is comparatively higher than that of Nepal. According to a study by the NEA, the cost of operating electric vehicles in Nepal is 15-20 times lower than petrol vehicles: for electric cars, it is Re 0.7 paisa per kilometer, Re 0.8 for SUVs or jeeps, Re 0.9 for microbuses and Rs 1.2 for large buses.

The green aspect

Environmental aspects shape the complex relations between hydrogen and battery-electric vehicles. Hydrogen’s environmental impact hinges on its production method: green hydrogen, produced through the electrolysis of water using electricity from renewable sources, is a cleaner but comparatively expensive solution, while gray hydrogen produced from natural gas has a high CO2 output. Technologies like carbon capture and storage (CCS) have improved the blue hydrogen to fill this gap. A notable environmental advantage of hydrogen-powered vehicles is that their byproduct is just water vapor, and thus doesn’t emit any carbon into the atmosphere. Even though electricity used by BEVs can be from renewable sources, the two main environmental issues are associated with batteries. The exploitation of such strategic minerals such as lithium, cobalt and nickel brings with it questions on resource depletion as well as the impact on the environment. However, recycling or disposal of the batteries becomes a concern when the BEV batteries degrade over time—typically after about 10 years.

Hybrid model

Hybrid models combining hydrogen and battery technologies are emerging as a promising solution. These vehicles are driven by hydrogen fuel cells as the main power source and batteries that will be used for auxiliary/peak load. This approach enhances the efficiency of the features inherent in both technologies, including the range of operation and regenerative braking. For instance, the Honda CR-V e: FCEV incorporates hybrid systems to balance performance and efficiency that provide 29 miles of range via battery, adding to the 241 miles from the fuel cell. The hybrid model is more appropriate for developing countries like Nepal, where establishing extensive hydrogen refueling infrastructure is expensive and not feasible in all locations. Thus, by incorporating a battery as an extra power source, the hybrid model allows vehicles to cover the necessary range to reach refueling stations. Current trends are to further invest in R&D of lighter fuel cell systems and higher capacity batteries to cut costs and ease integration.

Conclusion

The heavy-duty vehicle registration in Nepal was about 18,500 units in 2023 and is projected to reach around 20,400 units by 2026. This highlights the potential for hydrogen and electric technologies to play a pivotal role in the decarbonization of the transportation industry. Heavy-duty transport may benefit from hydrogen or electric technologies but each has its strengths and weaknesses. Hydrogen has the highest energy density, fast refueling time, and longest-range satisfaction compared to battery electric vehicles, making it suitable for long-distance use. Nevertheless, hydrogen remains an immature technology, with the problem of expensive hydrogen production and the lack of refueling stations persisting.  These issues can be solved through strategic solutions such as government subsidies, incentives for green hydrogen production and policies to encourage private sector investment. BEVs are cheaper with regard to energy, require less maintenance and have a more extensive charging network. However, they have relatively less energy density, longer charging time and limited traveling distance, which are not suitable for commercial purposes for heavy-duty applications. That is why hybrid models are considered to be intermediate solutions that combine the possible benefits of both technologies. The choice ultimately depends on specific use cases, availability of infrastructure and regional energy policies. As the world continues to look for sustainable production of heavy-duty vehicles, both hydrogen and electric technologies are likely to coexist in the coming years as well.

Asia has been one of the world’s fastest-growing regions, and energy requirement is expected to increase by more than 50 percent until 2040, mainly driven by factors such as industrialization, urbanization and population growth. The general electricity generation dependency upon coal and thermal power in the region is 70 percent for India, over 80 percent for Bangladesh and 58 percent for Pakistan. Despite being a technologically advanced nation, 70 percent of Japan’s energy demand is fulfilled by fossil fuels whereas the numbers for South Korea and China are 80 percent and 60 percent, respectively. The Asian countries use about 0.5bn metric tons of coal annually, of which more than 1.5bn metric tons of CO2 are emitted from the power sector. This heavy reliance on fossil energy resources bears the social cost of extreme air pollution and greenhouse gas pollution. As industries like steel, cement, ammonia and others that release high levels of CO2 are expected to expand during the current decades, it is imperative to develop nontraditional energy sources in the region.

Green hydrogen is a clean, versatile energy carrier generated through water electrolysis using renewable electricity. In contrast to grey or blue hydrogen, which are derivatives of fossil fuels and their production emits greenhouse gases, green hydrogen is carbon-free. Its applications are manifold: from powering industry and transport to energy storage and a clean fuel source for power generation. For Asia whose energy mix is dominated by coal and natural gas, green hydrogen offers a pathway to decarbonize hard-to-abate sectors like steel, cement and heavy transport. It also aligns with the region’s commitments under the Paris Agreement to limit global warming.

The present energy scenario of Nepal shows a comfortable position with an installed hydropower potential of about 3,157 MW, while the total domestic demand is about 1,870 MW. Nepal’s estimated peak electricity demand looks much less at 10,500 MW by 2040 with an installed capacity of 40,000 MW. This excess renewable energy is a perfect opportunity for Nepal to focus on green hydrogen production since water electrolysis can be powered with surplus electricity. Green hydrogen can act as a carbon-neutral and exportable energy vector for meeting the energy transition needs of neighboring Asian countries. Since coal and thermal energy predominate in the countries within the region, exporting green hydrogen from Nepal could be helpful to countries like China, South Korea, Japan, India, Bangladesh and Pakistan to progress toward less carbon-intensive energy sources and, at the same time, spur regional cooperation and growth of the energy sector. 

India's rising demand for green hydrogen is a perfect opportunity for Nepal to become a major exporter of green hydrogen. Nepal, being a country abundant in hydroelectric power, could use the excess clean energy to generate green hydrogen to aid India in its decarbonization drive. Moreover, Nepal has the potential to export green hydrogen and its derivatives, such as ammonia, to India via pipelines, enabling further export to East Asian and South Asian markets. While green hydrogen may not currently be the most economically viable energy source, it stands out as one of the most environmentally-sustainable options, aligning with global decarbonization goals. Besides, the geographical location of Nepal, which is adjacent to India, and the ongoing prospects of energy exchange make the country an ideal supplier of green hydrogen. At the same time, this business may lead to the generation of thousands of employment opportunities in Nepal’s energy transportation and logistics sectors and contribute to diversification. Green hydrogen holds the promise of becoming the foundation of Nepal's new export economy in energy and, therefore, could become a long-term substitute for the two most volatile industries in Nepal—remittances and tourism.

A 2023 report by the World Bank estimated that if Nepal utilized 10 percent of its technically feasible hydropower for hydrogen production, it could produce 1.2m metric tons of green hydrogen annually, worth approximately $6bn at current market rates. Exporting hydrogen to India, Bangladesh and potentially China would create thousands of jobs throughout the supply chain of hydrogen production, storage, transport and logistics. For Nepal’s economy, which relies heavily on remittances and tourism, hydrogen could diversify revenue streams and reduce trade deficits.

The proximity of Nepal to the two significant energy consumers, India and China, places it at a logistical advantage in terms of green hydrogen exports. India’s National Hydrogen Energy Mission has targeted bringing down the price of green hydrogen to $1 per kilogram by 2030, creating massive demand for cheaper imports. And Nepal could be a key supplier. Also, hydrogen trade could be added to existing bilateral agreements such as the India-Nepal Power Trade Agreement (2014). Developing regional hydrogen corridors with shared infrastructure, such as pipelines and storage facilities, would reduce costs.

The government’s support is critical to making Nepal a green hydrogen hub. The Nepal Hydrogen Hub plan foresees the utilization of excess hydropower in the production of green hydrogen that can be utilized in Nepal’s economy in green cement and green steel industries, and the excess hydrogen can be exported as green ammonia or transported through pipelines to the Asian market. Setting up a green hydrogen plant for every hydropower project being developed in Nepal would be very costly. In response, the Nepal government should propose a plan to establish four strategic hydrogen hubs to centralize resources for cost efficiency based on the approximate area of hydropower stations. These hydrogen hubs, depending on their distances from either India or Bangladesh, could be used to export green hydrogen, hence providing Nepal with perfect regional markets. 

For that, the policymakers need to formulate a National Hydrogen Roadmap outlining the production target, export strategy and incentive for investment. Offering subsidies or tax breaks for producing green hydrogen and related infrastructures can attract domestic and foreign investments. Incentivizing public-private partnerships is critical for mobilizing large-scale capital and technical expertise. Green hydrogen aligns with Nepal’s commitments under the Paris Agreement to achieve net-zero emissions by 2045. Hydrogen can reduce air pollution, improve public health, and contribute to global climate goals by replacing fossil fuels. 

Developing robust export infrastructure, such as pipelines, storage systems and transportation networks, will ensure seamless movement to regional and international markets via shipments. This will not only strengthen the Nepali economy but also make it more self-reliant, rather than being dependent on remittances and taxes, which are unsustainable long-term economic solutions. Becoming a green hydrogen export hub will not only position Nepal as a leader in sustainable energy but also create massive employment opportunities and drive the development of green infrastructure to pave the way for long-term economic growth and environmental resilience. Besides, the export of green hydrogen will lower Nepal’s trade deficit by decreasing reliance on imports while creating new revenue streams. This transformation aligns with global efforts to decarbonize energy systems and presents Nepal with an opportunity to lead the region in renewable energy innovation and sustainability.

Space exploration has always been a boundary of human imagination, pushing the boundaries of technology and expanding our understanding of the universe. NASA and many other organizations have already carried out remarkable missions of landing on the Moon and exploring Mars with spacecraft. These efforts have significantly contributed to our knowledge of space but still, the concept of interplanetary travel and colonization remains a grand ambition. Elon Musk has taken a bold step toward realizing this dream through his company SpaceX. Musk is working on a new idea of transportation that envisions human travel from one planet to another. Starship is the latest development in this journey, designed to transport humans and cargo to Mars, the Moon and beyond.

Musk founded SpaceX in 2002 and from that date, it has already achieved several space milestones including the development of reusable rockets like the Falcon 9 and the first private spacecraft to deliver cargo to the International Space Station (ISS). These successes have paved the way for the development of the most powerful and advanced spacecraft ever built—Starship. SpaceX has launched several different versions of spacecraft before the development of Starship. The Dragon was the company’s first major spacecraft designed to transport cargo and crew to the ISS. With the development of Dragon 2, SpaceX solidified its position as a leader in the space industry as it was allowed for human spaceflight. With the development of Falco 9, a reusable rocket, the company marked a significant turning point in space exploration by drastically reducing the cost of launch. Starship is the result of all these earlier projects, which marked a major leap in terms of technology and scale. Unlike previous spacecraft, Starship is designed with interplanetary travel in mind, making it a key component of Musk’s vision for colonizing Mars.

The most advanced spacecraft SpaceX has developed to date, the Starship is designed to carry up to 100 passengers or 100 tons of cargo to various destinations in space. The spacecraft is made of stainless steel and carbon fiber.  The use of stainless steel is a significant shift from the lightweight aluminum-lithium alloys used in many traditional spacecraft, as it provides a better balance of strength, temperature resistance and cost-effectiveness and it can withstand the extreme conditions of space travel. The Starship consists of two stages: Stage 1 and Stage 2. The lower part responsible for providing the necessary thrust to launch the spacecraft into orbit is Stage 1, which is also known as Super Heavy booster. It measures 71 meters in height with 9 meters in diameter and is powered by 33 Raptor engines, which generate a total thrust of around 17m pounds (7,700 tons). In the past, boosters were expendable; after launch, they would fall into the sea and be destroyed. However, the Super Heavy booster is designed for reusability. It can return to the launch pad after separating from the spacecraft, allowing for rapid turnaround times and significantly lowering the cost of space travel. 

The upper part of the spacecraft responsible for carrying crew and cargo to their destination is Stage 2, which is the Starship itself. It is 50.3 meters tall with nine meters in diameter and has a payload capacity of 100 metric tons. It is equipped with six Raptor engines, which use liquid methane and liquid oxygen as propellants. This combination is chosen not only for its high performance but also because it can potentially be produced on Mars using the planet's natural resources. This capability is essential for long-term sustainability and the possibility of return missions.

The Starship program has undergone several test flights to date. The first test flight was a suborbital ‘hop’ in which the spacecraft ascended a few kilometers before landing back on Earth. Subsequent Starship flights reached higher altitudes and performed more intricate maneuvers, ultimately culminating in Flight 5. Executed on 13 Oct 2024, Starship Flight 5 marked a significant advancement in SpaceX’s mission to create a fully reusable rocket system, demonstrating major upgrades from its predecessors, such as a redesigned heat shield and enhanced landing mechanisms. The mission involved launching the Starship upper stage toward space, followed by a controlled return of the Super Heavy booster to the launch site. The booster executed a precise landing using ‘chopstick’ arms on the launch tower after separating at an altitude of approximately 74 km, showcasing a novel recovery technique that aims to significantly reduce the time and costs associated with rocket reuse. Starship is designed to achieve re-flight of its rocket booster ultimately within an hour after liftoff. The booster returns within ~5 minutes, so the remaining time is reloading propellant and placing a ship on top of the booster. 

SpaceX refined the design and improved the reliability of the spacecraft with the valuable data from each test. Starship's capabilities are not limited to Mars missions as it is intended for a variety of other roles, such as deploying satellites, transporting cargo to the Moon and even conducting intercontinental travel on Earth.  

As per Elon Musk, the cost of launching a rocket is around $60m. If the rocket is used only once, the entire capital investment is consumed in a single flight. However, if the rocket can be reused 1,000 times, the cost drops to just $60,000 per launch. This dramatically reduces the cost of spaceflight and can bring it closer to the cost of air travel in the near future.

Starship is another important step forward in human space exploration because Mars colonization becomes more realistic with it. The payload of the spacecraft is rather generous and, in addition, it can be refueled in orbit, which makes it possible to deliver everything necessary for the construction of a Martian settlement. Musk envisions a city on Mars with a population of one million people by the 2050s. This ambitious goal involves sending thousands of Starships to the Red Planet, transporting equipment, habitats and settlers in phases. The potential benefits of interplanetary colonization extend beyond survival. Mars could serve as a hub for scientific research, resource mining and even a launch point for future missions to the outer solar system. The Moon, too, could be a valuable destination. NASA’s Artemis program, which aims to return humans to the Moon, may use Starship as a lunar lander to transport astronauts and cargo to the lunar surface. With Earth estimated to be about 4.5bn years old and potentially facing environmental challenges that could threaten its habitability, finding an alternative home for humanity is becoming increasingly important. SpaceX’s vision for Starship is not just about exploration but about ensuring the continuation of human civilization.

Starship represents a monumental step forward in human spaceflight and interplanetary travel. Its advanced design, reusability and cost-effectiveness make it a game-changer in the space industry. SpaceX is advancing scientific knowledge and ensuring a future where humanity can thrive beyond Earth as it aims to establish a human presence on Mars and explore the Moon and other celestial bodies. As countries around the world look to space for new opportunities, the launch of NepaliSat-1 in 2019 stood as a symbolic moment, showcasing the country’s aspirations. Thus, considering Earth’s 4.5bn-year history and the potential environmental threats to its future, SpaceX’s Starship symbolizes a crucial step toward safeguarding the future of humanity beyond our planet.

Green hydrogen has turned out to be one of the primary solutions to global warming and climate change as it helps in the process of decarbonization and attaining carbon neutrality. Since green hydrogen can be produced using renewable energy sources, it is an opportunity to gradually decrease the dependence on fossil fuels, which will improve energy independence and energy security. To summarize, green hydrogen is a promising, clean fuel of the future in a world that is slowly moving toward cleaner energy systems. Thus, with the vision of shifting the energy sector to cleaner and sustainable sources, the idea of hydrogen production in Nepal was initially discussed in an academic research paper completed by Prof Bhakta Bahadur Ale of Tribhuvan University and Prof SO Bade Shrestha of Western Michigan University in 2008. They suggested that hydrogen should be produced through the use of electricity from hydroelectric plants when they are generating power during off-peak hours. During that time, Nepal was struggling with acute energy crises and frequent load-shedding, which, coupled with technological constraints, made it next to impossible to turn the concept into reality. 

When the Covid-19 pandemic started, the industrial sector contracted, leading to a significant drop in energy consumption, but fossil fuel imports remained high. This led to an overproduction of electricity particularly from the hydropower plants in Nepal. This excess electricity led to wastage and an imbalance between supply and demand; hence, it was crucial to look for methods to utilize this electricity in domestic sectors. This scenario was ideal for producing green hydrogen using the surplus electricity through the process of electrolysis. That is when the shift from a fossil fuel-dependent economy to a green economy began to take shape. Recognizing this potential, Kathmandu University decided to channel the excess energy into producing hydrogen by splitting water through electrolysis. With this goal in mind, the Green Hydrogen Lab (GHL) at Kathmandu University was established in 2020 under Prof Bhola Thapa and Biraj Singh Thapa, marking a major step forward in Nepal’s pursuit of renewable energy solutions.

Even though the strategy of generating hydrogen by utilizing the excess electricity from hydropower was discussed in 2008, it was only in 2020 that R&D on hydrogen production was initiated. In particular, the GHL has contributed to developing this vision. GHL started the Nepal Hydrogen Initiative (NHI), a consolidated program for establishing a policy foundation, hydrogen energy value chain, and developing action plans. Some of the ongoing projects at GHL are Nepal’s first hydrogen refueling station and the green urea production plant in Nepal. GHL has a 5-kW electrolyzer that can produce 2 kg of hydrogen per day, which is used to refuel a car with a 6 kg hydrogen capacity, providing a driving range of 600 km. GHL is also involved in different projects: green hydrogen for the production of ammonia, industrial heat, zero-emission transportation, re-electrification and making green steel. MIT Group Foundation and Global NRN Foundation, KU being a knowledge partner, organized the Nepal Green Hydrogen Summit in October 2022 with the main aim of prioritizing the delivery of climate-friendly green hydrogen projects that help achieve the Sustainable Development Goals (SDGs). Since 2023, the Global Green Growth Institute’s (GGGI) NP15 Green Hydrogen Value Chain and Green Ammonia Plant project has been exploring the potential of green hydrogen in Nepal's energy mix. Asian Development Bank (ADB) studied the prospects of Hydropower to Hydrogen in Nepal in 2020. The first hydrogen internal combustion engine conversion technology was demonstrated on 16 September 2024 at Pulchowk Engineering College, which embarked on another big step in the development of green hydrogen in Nepal. With the adoption of the Nepal Green Hydrogen Policy-2024, the country has set a more tangible framework for future study, innovation and funding of green hydrogen. This policy lays the groundwork for realizing Nepal’s immense opportunity in green hydrogen generation, mainly based on Nepal’s hydropower potential. 

Nepal’s roadmap for green hydrogen production can be significantly boosted by studying the policies, pilot projects, and commitments of global leaders in the hydrogen economy. Countries like Japan, India, China and the United States are driving the green hydrogen agenda, making substantial investments in technology, infrastructure, and research. These nations provide important lessons for Nepal in terms of policy formulation, industrial applications and the scaling of green hydrogen.

The Indian government approved the National Green Hydrogen Mission in 2023 to develop a green hydrogen production capacity of at least 5 MMT per annum. By 2050, it aims to replace 50m metric tonnes of gray hydrogen with green hydrogen, which could cut 50m tonnes of CO2 emissions annually. India is focusing on reducing the cost of hydrogen production to $1.5 per kg by 2030 through large-scale projects. 

The US National Clean Hydrogen Strategy and Roadmap-2023 align with the administration’s goals, including the aim to develop green hydrogen production capacity of 10 MMT by 2030, 20 MMT by 2040, and 50 MMT by 2050; 100 percent carbon pollution-free electricity by 2035 and net zero GHG emissions by no later than 2050. At the same time, the United States’ Department of Energy (DOE) has launched the “Hydrogen Shot” initiative to reduce the cost of clean hydrogen to $1 per kg within a decade. In March 2022, China’s Medium and Long-Term Strategy referred to as “the National Plan” was released for the development of the hydrogen energy industry after which there has been significant development in the country’s hydrogen space. Among these targets, the deployment of 50,000 fuel cell vehicles and the production of 0.1 to 0.2 MT of renewable hydrogen toward a broader goal of reducing annual CO2 emissions by 1m to 2m tons by 2025 was most important. China is focusing on reducing the cost of hydrogen production to $2.18/kg with advancements in technology and a reduction in electricity prices. Japan, another hydrogen pioneer, is equally ambitious. Japan was an early proponent of making hydrogen for decarbonization, publishing its first hydrogen strategy in 2017, and the substance continues to be a critical part of Japan’s strategy to decarbonize its economy and achieve carbon neutrality. Japan’s hydrogen strategy is central to its goal of becoming carbon-neutral by 2050, reducing CO2 emissions across power generation, transportation and industry. Japan aims to bring down the cost of hydrogen to $2.77 per kg by 2030 from the current cost of $9.24 per kg, largely through technological advancements and scaled up production. Japan also plans to produce 1.08 MMT of hydrogen annually by 2040, a target that Nepal can aspire to as it has the potential to develop its green hydrogen capabilities.

Green hydrogen, which is generated from electrolysis, is a huge opportunity for Nepal. The government is formulating directives to generate 28,500 MW of electricity by 2035, while the country’s internal electricity requirement is estimated to be around 7,000 MW. With a surplus power of approximately 20,000 MW, there is an opportunity to produce 400,000 kg of hydrogen (as 1 MWh of electricity generates 20 kg of H2). If this surplus electricity, costing Rs 6.70 per unit, is not utilized for either domestic consumption or export, the financial value would effectively be zero. The country could face an annual loss of Rs 1.173trn, but by using surplus electricity to produce green hydrogen and its derivatives, it can reduce fossil fuel imports, cutting down on import expenses and promoting clean energy use in industries. This excess capacity could be used to produce green hydrogen which will make hydrogen one of the cheapest and competitive fuels in the market. Thus, increasing the scale of economies and with the assistance of technology across the globe, the cost of producing green hydrogen is expected to be below $1 per kilogram by 2050, which will enhance the feasibility of green hydrogen production. For Nepal, this is a chance to completely change the energy paradigm from a fossil-based to a renewable hydrogen economy.

Nepal faces several challenges in developing a green hydrogen economy, including gaps in policy, underdeveloped technology and low market readiness. Domestic demand for hydrogen applications, like Fuel Cell Electric Vehicles (FCEVs), remains limited, while high production costs and a lack of infrastructure complicate commercialization efforts. Additionally, attracting investment is challenging due to the market's early-stage conditions. To overcome these obstacles, Nepal needs to concentrate on the formulation of sound, sustainable energy policies that incorporate green hydrogen in the country’s strategic plan. The government should fund pilot projects to demonstrate the viability of green hydrogen technologies while encouraging Public-Private Partnerships (PPPs) to invest in scaling up commercial projects. 

In addition, successful pilot projects will also help to attract foreign direct investment (FDI). The government should also encourage private companies to invest in the technology by providing them with subsidies, tax exemptions and reasonable power tariffs for electrolysis. By leveraging its abundant hydropower, Nepal also has the potential to export green hydrogen to neighboring countries like India and China, with supportive export policies and infrastructure development key to realizing this opportunity. Moreover, investment in research and development (R&D) will contribute toward bringing down the costs of producing hydrogen and enable Nepal to remain competitive in the global hydrogen market. The creation of a separate hydrogen authority and simplification of the licensing of hydrogen projects will help stimulate further development and increase the share of commercial-scale projects after successful pilot projects.

To bridge the gap between academia and industry, Kathmandu University (KU) has established the Academia-Industry Cooperation (AICKU) under the leadership of Vice-Chancellor Prof. Dr. Bhola Thapa. Recognizing the immense potential of a synergistic partnership between academia and industry, Dr. Thapa envisioned AICKU to address shared challenges and meet the evolving needs of both sectors. KU firmly believes that fostering collaboration with industry is key to driving innovation and solving real-world problems. The university’s motto, “From Campus to Community,” reflects its commitment to tackling unemployment, reducing student outflow, and promoting knowledge and skill transfer. Currently, AICKU identifies potential industry partners and develops strategies for collaboration through partnerships.

AICKU operates with the vision to "bridge the gap between academia and industry, enhancing research and development, and contributing to economic growth and social impact." Its mission is "to create collaborations that promote skill development, knowledge transfer, and employment opportunities." AICKU follows the GRID model, which stands for Grants, Research, Industry, and Dissemination. By securing grants from government and private sectors, AICKU facilitates KU’s research projects, focusing on solving real-world problems through strategic partnerships. The results of these projects are shared through seminars, conferences, and workshops, opening new avenues for funding, innovation, and knowledge transfer to benefit all stakeholders.

AICKU’s initiatives go beyond research and knowledge transfer, focusing on creating direct pathways for student and graduate engagement with industry. This includes providing jobs, internships, collaborative workshops, research and development (R&D), promoting startups, and fostering international collaborations.

Jobs and internships

AICKU partners with private companies to offer paid internships and job placements, providing students with practical experience while meeting industry needs. KU’s Employment Promotion Program has already placed 30 recent graduates, with a target of offering opportunities to 80 graduates annually. A KU Employment Promotion Committee ensures adherence to employment guidelines, ensuring that top students receive job opportunities even in a challenging job market. This initiative not only benefits students but also enhances the overall societal progress by connecting academic knowledge with industry expertise.

Collaborative workshops

AICKU has been proactive in organizing collaborative workshops and events to bring together key stakeholders. The first Academia-Industry Meet 2023, held on December 29, brought leaders from academia, industry, and government together to discuss industrial development and economic progress in Nepal. Other successful events include the Academia-Industry Workshop in collaboration with Energize Nepal, held across all provinces to align R&D efforts with industry priorities. Additionally, the Brain Drain vs. Gain Symposium united experts to address the challenges of brain drain and youth retention, while Yuwa: A Talk Show inspired youth engagement through transformative discussions. A recent seminar titled Nepal-Japan Collaboration for Environmental Sustainability, Earthquake Resilience, and Youth Empowerment further showcased AICKU’s efforts to confront pressing challenges in collaboration with Japan's Tiger Mov, Inc.

Research and development

KU’s ultimate goal is to conduct groundbreaking research that leads to practical solutions, internships that shape future careers, and projects that bridge the gap between theory and application. AICKU serves as a common platform for KU’s schools, departments, and industries to collaborate on research and academic activities. Current initiatives include the Mental Health Research Centre, Hematology and Oncology Research Centre, and Multi-Disciplinary Diabetic Research Centre, all of which are contributing to advancements in health technology and medical research. These efforts highlight the potential for academia and industry collaboration to foster national development.

Startups and entrepreneurship promotion

KU’s Business Incubation Centre (KUBIC) has already supported over 20 companies producing innovative, community-focused products. KUBIC has also trained more than 179 individuals and supported 22 researchers. This initiative is part of KU’s broader strategy to promote startups and entrepreneurship, further strengthening academia-industry ties.

International collaboration

In addition to national partnerships, AICKU has established international collaborations. Notable partnerships include those with ASHA NPO Japan to develop a digital medical records app for Nepal’s healthcare system, and with Colorbath NPO Japan to work on energy sector projects. AICKU also facilitated a partnership between KU and Thrangu Vajrayana Buddhist Center in Hong Kong, resulting in the construction of the Thrangu Rinpoche Academia Industry Block at KU, a testament to both institutions’ commitment to fostering a collaborative environment for academia and industry.

Kathmandu University’s efforts to foster academia-industry collaboration represent a significant milestone in Nepal’s educational and industrial landscape. Through robust partnerships, student opportunities, and research aligned with industry needs, KU is paving the way for a brighter future. As these collaborations continue to flourish, they promise to not only enhance individual success but also drive societal and economic progress, contributing to nation-building and sustainable development. AICKU stands as a beacon of KU’s commitment to bridging the gap between theoretical knowledge and practical application, with the vision of creating a self-sufficient nation where education and industry work hand in hand to achieve lasting impact.