Nepal holds significant potential in the global carbon credit market, with extensive forests, hydropower capacity, and low industrial emissions. However, it has captured only a tiny fraction of available carbon revenue due to regulatory delays, weak institutional frameworks, and low community awareness. The country's first carbon trading regulation was only enacted in late 2025, years after the Kyoto Protocol expired. With its Least Developed Country status expiring in late 2026, Nepal faces a narrow window to benefit from automatic additionality for carbon projects. Experts argue the country needs a dedicated carbon market office, clearer investment pathways, and stronger community engagement to compete with peers like Ghana and Bangladesh. Without urgent action, buyers may turn to other suppliers.
