Stakeholder Meeting on Automotive Fuel Economy Initiative

To promote nationally appropriate automotive fuel economy policies in Nepal, the Clean Energy Nepal (CEN) and Clean Air Network Nepal (CANN) with support from The United Nations Environment Programme (UNEP) organized a stakeholder meeting on Automotive Fuel Economy Initiative in Kathmandu on 6th March 2015.

This is part of the Global Fuel Economy Initiative (GFEI) which promotes substantial but attainable improvement in automotive fuel economy to reduce greenhouse gas from the transport sector, with co-benefits in terms of energy security, cost savings, air pollution and sustainable mobility on a global basis. With the support from UNEP, CEN/CANN has initiated a project on ‘developing a vehicle fuel economy baseline for Nepal’. This project will provide the basis to better understand the current and future vehicle fleet in the country particularly on light-duty vehicles and serve as a starting point in developing nationally appropriate automotive fuel economy policies for the country. 

Mr. Bert Fabian from United Nations Environment Program presented on Global Fuel Economy Initiative (GFEI). He highlighted the existing global scenario and growth of light duty vehicles, it’s contribution to climate change and air pollution, GFEI targets, fuel economy initiatives in various countries and its relevance for Nepal. He said that 53% of total CO2 emission from road-based transport system comes from light duty vehicles. Meeting GFEI global target can reduce a total of 33 Gt CO2 emissions beyond already adopted policies between 2015-2050, he added. The target of GFEI is to achieve 4.2 l/100km in 2030 from the baseline of 8.3 l/100km, which require global fuel efficiency improvement 2.7% annually. He presented the fuel efficiency standard implemented by India to achieve 18.2 km/l in 2016-17 and 21 km/l in 2021-22, and voluntary labeling of fuel economy in passenger cars. The fuel efficiency standard in India is expected to reduce 68.91 million tons of CO2 equivalent by 2025.

Mr. Prashanta Khanal, Program Coordinator of Clean Energy Nepal presented on the baseline study on fuel economy in Nepal, relevant policies, and challenges in accessing the data. He said that the annual motorization rate in Nepal is 14%, which is one of the highest in Asia. The average annual growth rate of CO2 emission from road transport sector is 8.7% according to a study done by Clean Air Asia. Highlighting the existing trend of vehicle growth he said that the number of vehicles would at least double by 2030.  A study done on Kathmandu valley shows that the average fuel economy of petrol LDVs is 9.6 km/l and of diesel LDVs is 8.6 km/l.  Lack of detail vehicle data on make, model and year of production makes it difficult to calculate the baseline study. He also highlighted some of the policies that support the fuel economy and recommended to introduce fuel economy policy/standard for Nepal.

During the discussion session, the participants discussed on possible fuel economy policy and institutional arrangement for its implementation. The participant suggested having policy provisions of lower tax for fuel-efficient vehicles including electric and hybrid, and higher taxes for polluting and less efficient vehicles. The participant suggested implementing Environment-friendly Vehicle and Transport Policy in upcoming fiscal year plans and programs, and implement government decision to remove old polluting vehicles. As India has already devised fuel economy standards for passenger cars and light commercial vehicles, Nepal should also have standards including fuel labeling. Participants also suggested for consumer awareness program on fuel-efficient vehicles and also work on improving fuel efficiency through road improvements, fuel quality, proper inspection/maintenance system and driving behavior. The participant identified Ministry of Science, Technology and Environment or Ministry of Physical Infrastructure and Transport as focal ministry to devise the fuel economy policy.

Around 20 participants from different governmental agencies, non-governmental, agencies, academia, and private sectors.