The government has introduced the Green Hydrogen Policy, 2080 BS with an aim to promote the green hydrogen sector. The policy aims to advance the production and utilization of green hydrogen by using electricity produced from renewable sources such as hydropower to minimize the impacts of climate change.

The policy aims to create a low carbon economy, reduce dependence on petroleum products and utilize and store green hydrogen and its by-products. The policy aims to encourage other industrializations including production of chemical fertilizers using green hydrogen and its by-products and to promote studies and research on the commercial use of green hydrogen and its by-products.

Currently, Nepal heavily depends on imported petroleum products, leading to the outflow of foreign currency equivalent to approximately 10 percent of the country's gross domestic product. It accounts for about 13 percent of the country's trade deficit. It is mentioned in the policy that the production and use of green hydrogen will replace petroleum products and also enhance energy security.

Currently, Nepal has incurred a situation where approximately Rs 21 billion worth of foreign currency has been spent on the import of chemical fertilizers. Prof Dr Biraj Singh Thapa, team leader of Green Hydrogen Lab at Kathmandu University, said that the government has a lot of potential to use the electricity generated from hydropower projects as an alternative to petroleum through hydrogen.

"The policy serves especially as an alternative to petroleum products and to help in the production of chemical fertilizers." He said, "The policy is like a ripe fruit hanging in the sky. Now we need to harvest it. Practical implementation of the policy requires the formulation of acts and regulations," Thapa added.

He said that along with the policy, it is time for the government to bring and implement laws and regulations related to green hydrogen. "In the event that an industry produces hydrogen from hydroelectricity, arrangements have not been made for how to provide electricity to such industries," he said. Prof Dr Thapa said there is a need to form a board, authority/council related to green hydrogen.

There is a huge potential for hydropower generation in Nepal and currently projects with a capacity of more than 20,000 megawatts are in various stages of study and construction.In this way, it seems that a large amount of hydroelectricity produced in Nepal in the coming years can be consumed in the production and use of green hydrogen in the country and replace the import of petroleum products and chemical fertilizers.

The policy has been introduced because it aligns with Nepal's international commitments to reduce carbon emissions and contribute to global environmental preservation. It is said that the production and use of green hydrogen will contribute to making the country's economy stronger, safer and more self-reliant by reducing the import of coal, furnace oil, LPG gas, petroleum products and other substances that are currently being consumed in the country.