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Green coal gives a sustainable response to energy needs in Nepal


In Nepal, the industrial sector is thriving, infrastructure is developing, and population growth rapid. All of this increases the demand for energy. To control carbon emissions and tackle climate change, companies responsible for energy generation need to lean towards renewable sources. An NCF-funded project replaces fossil fuels with biomass pellets and demonstrates how this can improve both the well-being of environment and local communities.

Every year in Nepal, the plantation forest at Sagarnath suffers from forest fires. The forest understory bushes grow during the rainy seasons and then dry out during the winter, serving as an ignition as well as a fuel source for forest fires. The spread of invasive species, such as the ‘Banmara’, has worsen this vicious cycle in recent years.

A local company, BAKAS Renewable Energy Ltd. (BREL), decided to investigate ways to turn the invasive shrubs into climate-friendly energy sources and at the same time prevent forest fires. This led to an idea of establishing a briquette and pellet factory in the neighbourhood of the Sagarnath plantation where BREL could lease the plantation forest to extract understory and fire-prone shrubs. This, in turn, could pave the way for employment opportunities in nearby communities, where local people could be involved in both shrub harvest and collection of raw materials, and take part in the production at the factory.

In the process of developing this idea, BREL teamed up with a forestry IT and technology company from Finland, Arbonaut Ltd, with the purpose of digitalising important components of the potential project. These included an airborne laser scanning campaign to measure the Sagarnath forest resource, creation of detailed maps of the shrub density and tree biomass, and a mobile web map platform to share collected data to provide support to the shrub harvesting operations and fire prevention management.

The Sagarnath forest understory during the dry season is a risk for forest fires. Photo: BAKAS Renewable Energy Ltd. / Arbonaut Ltd.

Turning the idea into an impactful project

The project idea became real in 2020, when the Nordic Climate Facility (NCF), managed and financed by NDF, awarded a EUR 500,000 grant for the proposal. Together with co-financing from the two partners (EUR 1,500,000), the pellet factory has since then materialised, and the local community has been engaged in its production. Due to the outputs of the factory, many businesses in the area have moved, or are in the process of transitioning, from fossil fuels to pellets that allows them to achieve cost savings and green-house gas emission reductions. Furthermore, shrub removals from the forest have mitigated the risk of forest fires with derived positive effects in relation to people's well-being and emission reductions.

“We never thought that waste biomass could replace coal and gas. I feel very lucky to be contributing to the production of the ‘green coal’”, says Sharwan Kumar Mahato, a factory operator who comes from the local community.

The project has improved the local environment in Nepal, but also contributed to the well-being of the surrounding communities and its people. At the end of the project, 215 seasonal and 15 permanent jobs were created. Jobs include harvesting and material collection and have been given to locals in marginalised communities, especially women.

“Before the pellet project arrived in our remote village, I struggled with unemployment. Now, working in the factory does not only provide financial stability but also brings a sense of fulfilment. It has positively impacted my life both economically and emotionally,” says Jina Khatun, one of the women, who was employed through this project.

Women from local communities have found employment through this project in Sagarnath. Photo: BAKAS Renewable Energy Ltd. / Arbonaut Ltd.