Wood fuel market in Nepal

Earlier Report Observations

The wood fuel market in Nepal saw a temporary increase in 2019, supported by higher import volumes, even as policy initiatives began promoting alternative fuels. The revision of the Rural Energy Policy in 2019 enabled the entry of new private producers into bio-pellets and briquettes. However, in 2020, an energy trade blockade with India and COVID-19 supply chain disruptions sharply reduced imports, causing the market volume to decline despite rising household demand for wood.

From 2021 to 2023, the market continued a gradual downward trend, aligned with the government's fuel-switching strategy aiming to replace wood with biogas, solar, and electric heaters. The launch of the first industrial-scale bio-pellet plant by Bakas Renewable Energy in 2021, supported by state subsidies and tax incentives, provided a practical alternative, reducing reliance on traditional wood fuel.

By 2023, expanded hydropower trade with neighboring countries lowered the relative cost of wood but also intensified competition from cleaner energy. New 2024 regulations, including stricter sustainable forest management and mandatory labeling for electric cookstoves, reinforce this shift, setting the stage for a continued decline in wood fuel use.

Production wood fuel in Nepal

In kind, 2017-2020, K m³

Top producers of wood fuel, 2017-2020

World map of production of wood fuel, 2017-2020

Wood fuel production in Nepal has declined for the third consecutive year. In 2020, Nepal produced 11 650 K m³ of wood fuel, marking a slight drop of 0.9% compared to 2019. Between 2017 and 2020, production decreased by 2.9%, which equates to an annualized decline rate of 1.0%.

Annual dynamics of production in Nepal in kind, 2017-2020, K m³

Exports wood fuel from Nepal

Exports in kind, K m³

The data reveals irregular changes, indicating a volatile market environment. A 15-fold variation was observed between the minimum in 2020 and the maximum in 2018. In 2020, Nepal's wood fuel exports were recorded at 0.0 K m³, constituting a decrease of 93.3% from the previous year. The maximum value was recorded in 2018 at 0.0 K m³, with the largest increase of 180.9% also occurring in that year.

Annual dynamics of product's exports from Nepal in kind, 2017-2020, K m³

From 2017 to 2020, Nepal's wood fuel exports showed a pronounced dependence on India, with this market accounting for 96.3% of total exports in kind.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Nepal in kind, 2017-2020

Exports in value, K $ US

Volatility characterized the market behavior during these years. The lowest exports were observed in 2017, with the highest in 2020, reflecting a 3.5-fold gap. In 2020, Nepal exported 10 K $ US of wood fuel, showing a sharp uptick of 109.2% compared to 2019. The largest decline was recorded in 2019 at 6.4%.

Annual dynamics of product's exports from Nepal in value, 2017-2020, K $ US

Throughout 2017–2020, India (49.6% of exports in value terms), the United States (18.4% of exports in value terms), and Spain (6.5% of exports in value terms) formed the core group of markets for exports in value terms, together representing 74.5% of total flows.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Nepal in value, 2017-2020

Imports wood fuel to Nepal

Imports in kind, K m³

Volatility characterized the market behavior during these years. From the trough in 2020 to the peak in 2019, imports changed by 44 times. In 2020, the volume of wood fuel imports to Nepal totalled 10.0 K m³, which is 97.7% less compared to the previous year. The maximum value was recorded in 2019 at 436.7 K m³, with the largest increase of 1 292.3% also occurring in that year.

Annual dynamics of product's imports to Nepal in kind, 2017-2020, K m³

From 2017 to 2020, India acted as the main source for wood fuel imports to Nepal, consistently absorbing 99.9% of total imports in kind.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Nepal in kind, 2017-2020

Imports in value, K $ US

The market exhibited an unstable trend throughout the timeframe. From the low in 2017 to the high in 2019, volumes varied 3.2 times. In 2020, Nepal's wood fuel imports totalled 521 K $ US, amounting to an abrupt decrease of 67.4% from a year earlier. The maximum value was recorded in 2019 at 1 594 K $ US, with the largest increase of 145.1% recorded in 2018.

Annual dynamics of product's imports to Nepal in value, 2017-2020, K $ US

In 2017–2020, India clearly dominated the list of suppliers of wood fuel to Nepal, taking 94.5% of total imports in value terms.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Nepal in value, 2017-2020