Fuel pipeline project goes against green energy pledgeNepal is spending billions to finance oil pipeline projects, contrary to the focus that there should be for meeting its commitment to net zero emissions.
Prime Minister Pushpa Kamal Dahal flew to Dubai on Wednesday to attend the 28th Conference of Parties to the United Nations Framework Convention on Climate Change (COP 28) and spoke on climate finance Nepal seeks from the international community.
In his speech at the summit, Dahal said, “Nepal is fully committed to the Paris Agreement. We are committed to achieving net zero greenhouse gas emission by 2045, five years earlier than the global target.”
“We will fully utilise our hydropower potential to secure clean energy and maintain 45 percent forest-covered land,” said Dahal on the second day of COP 28 in Dubai, the United Arab Emirates.
Citing the National Adaptation Plan and Second Nationally Determined Contribution (NDC) implementation guidelines with a clear roadmap and strategies that were recently unveiled, Dahal said that the government's attempts to implement climate change adaptation and mitigation plans are facing serious financial and technological gaps.
Separately, the Ministry of Forest and Environment has launched Nepal’s long-term strategies for net zero emissions.
As per the strategy, Nepal aims to increase clean energy generation to 15,000 MW by 2030.
In the transport sector, the strategy is to increase the sales of electric vehicles (EVs) to 90 percent of all private passenger vehicles, including two-wheelers, sold and 60 percent of all four-wheeler public passenger vehicle sales by 2030.
But there is a catch.
Nepal will start the construction of two new petroleum pipelines by this fiscal year.
Experts say the decision contradicts Nepal’s commitment to achieve net zero emissions.
Prime Minister Dahal and his Indian counterpart Narendra Modi agreed in June to construct two petroleum pipelines.
During the bilateral meeting held in New Delhi on June 1, the two prime ministers signed a memorandum of understanding to construct the Siliguri-Jhapa Petroleum Pipeline.
Dahal and Modi jointly laid the foundation of a petroleum pipeline from Amalekhganj to Lothar of Chitwan during the meeting.
A 69-km cross-border pipeline, which brings petrol from Motihari in India to Amlekhgunj, Bara, became operational in April 2020.
“The construction of two petroleum pipelines will start by this fiscal year,” said Manoj Kumar Thakur, deputy director of Nepal Oil Corporation.
The construction of the two petroleum pipelines and a greenfield terminal in Jhapa will be funded by the Indian government. Another terminal in Chitwan will be built by the Nepal Oil Corporation.
The cost of all projects is estimated to be at nearly Rs3 billion. This financing excludes investment in other projects that may exceed Rs15 billion, officials privy to the matter said.
It will cost Rs438.4 million to build the Amalekhganj-Chitwan petroleum pipeline and Rs988.88 million to construct the green field terminal in Chitwan.
Similarly, construction of the Siliguri-Jhapa pipeline will cost Rs460.8 million. The cost of the green field terminal in Charali is estimated at Rs830 million.
“A committee has been formed comprising officials from Nepal Oil Corporation and Indian Oil Corporation to work out the investment modality and construction process,” Thakur said. The joint committee has already conducted three meetings.
The committee will submit the report in December, after which Nepal Oil Corporation will send the report to the Ministry of Industry, Commerce and Supplies and the Indian government.
Experts say it’s a double standard.
They say these million-dollar projects are a waste of money. According to them, there is an immediate need to decarbonise the transport sector, and most countries, including Nepal’s two immediate neighbours, are already moving in that direction.
“Obviously, it is a contradictory policy. While the Nepal government has committed to net-zero emission by 2045, it is constructing the petroleum pipeline,” said Ram Prasad Dhital, an energy expert.
“Instead of investing in fossil fuel pipelines, the government should focus on investing in renewable hydropower, cross-border energy trade and installation of charging stations for EVs,” Dhital said.
The use of fossil fuels needs to be reduced gradually.
There were discussions to gradually phase down fossil fuel during last year’s COP meeting, Dhital said.
To fulfil the net-zero emission commitment by 2045, the government has introduced an ambitious roadmap for hydropower too, Dhital said.
According to the Department of Customs, Nepal imported petroleum products worth Rs98.08 billion in the first four months of the current fiscal year.
In the last fiscal year, the petroleum import bill totalled Rs352.71 billion.
The government should invest in hydropower energy to reduce the dependency on imported fuel, Dhital said.
Bhushan Tuladhar, an environmental expert, has been discussing the plan to reduce the reliance on fossil fuel, and investing in the oil pipeline infrastructure makes no sense.
Nepal is totally dependent on imported petroleum products.
“The fossil fuel is impacting the environment. Nepal can reduce the impacts by investing in renewable energy like hydropower and solar.
Nepal’s private sector is aggressively investing in the hydro sector and the government’s investment in the petroleum infrastructure could be a setback for them and the country as well,” said Tuladhar.
The government has also set a goal of installing 500,000 improved cooking stoves, primarily in rural areas, and an additional 200,000 household biogas plants and 500 large-scale biogas plants.
By 2030, Nepal has a strategy that electric stoves are used as the primary mode of cooking in 25 percent of households.
It is estimated that to meet the target, Nepal would need to invest $25 billion.