Nepal’s Formal Entry into Global Carbon Markets
The Government of Nepal has officially opened a structured and legal pathway for carbon trading with the gazette publication of the Carbon Trading Regulations, 2082. Developed under the authority of the Environment Protection Act, 2076, this historic document provides the long-awaited blueprint for how the private sector, government bodies, and international partners can monetize emission reductions.
For a developer like Green Eco Solution, this regulation isn’t just a rulebook—it’s a massive opportunity to lead the development of high-integrity carbon projects that deliver both climate impact and national prosperity.
1. Who Can Participate?
The new law moves beyond government-only projects. Eligible “proponents” now include:
- Companies registered in Nepal.
- Joint ventures between foreign companies and Nepali-registered firms.
- Organizations and bodies established under federal law, including local-level and provincial government entities.
2. The Seven-Step Path to Project Approval
The regulation provides a clear, time-bound Standard Operating Procedure (SOP) to de-risk investment and ensure transparency:
- Project Concept Note (PCN): Proponents must first prepare a PCN in the format specified in Schedule-2.
- Recommendation: Forest projects apply to the REDD Implementation Center, while others (energy, waste, etc.) apply to the relevant Sectoral Ministry. A recommendation is issued within 15 days.
- Letter of Consent: Upon evaluation of the PCN, the Ministry grants a letter of consent within 15 days to prepare the final Project Document.
- Project Document (PDD): Proponents have one year to submit a detailed PDD following Schedule-3.
- Final Evaluation: The Management Committee evaluates the PDD based on social, environmental, and financial criteria.
- Approval Letter: Within 15 days of the final recommendation, the Ministry issues the official approval letter.
- Registration: Approved projects are assigned a Project Registration Number in the National Carbon Registry.
3. The Financial Mechanics: Fees and Retention
To ensure that climate action contributes to Nepal’s national goals, the regulation establishes a specific financial framework:
- 5% NDC Retention: Five percent of all certified carbon credits are automatically counted toward Nepal’s own Nationally Determined Contribution (NDC) and cannot be sold.
- 10% Benefit Sharing: Private sector proponents must allocate 10% of the benefits received from trading to the Government of Nepal.
- NPR 100/ton Fee: Proponents must pay a fee of one hundred rupees per tonne of carbon credit before sale.
- Approval Fees: One-time fees based on project size (Small: NPR 25,000; Medium: NPR 50,000; Large: NPR 100,000).
4. Sectors Open for Development
The regulation (Schedule-1) broadens the horizon for carbon projects in Nepal beyond traditional forestry:
- Renewable Energy: Hydropower, solar, wind, and community-led systems.
- Energy Efficiency: Industrial efficiency and clean cooking (improved stoves).
- Agriculture & Land Use: Sustainable management and carbon sequestration in soil and trees.
- Waste Management: Methane capture and energy from waste.
- Transport: Electric vehicles and sustainable public transport infrastructure.
The Carbon Trading Regulations, 2082 BS, provide the technical and legal certainty that the private sector has been demanding. By defining a clear process from Concept Note to Registry, Nepal is now open for high-integrity investment. Green Eco Solution is ready to be your strategic partner, navigating the PDD process and the ‘5% + 10%’ framework to turn local climate actions into premium, globally-recognized carbon assets.
