An Energy Sector Roadmap to Net zero Emissions for Lao PDR

The report outlines a pathway for Lao PDR to reach net zero emissions by 2050, utilizing LEAP and NEMO modelling to compare a Baseline Scenario with a transformative Net Zero Scenario. Key findings highlight the necessity of diversifying the energy mix beyond hydropower, electrifying transport and cooking, and implementing carbon removal technologies. The analysis emphasizes that while hydropower remains dominant, the country must scale up solar, wind, and biomass to ensure resilience against climate-induced droughts. Achieving the target requires significant infrastructure upgrades, including grid modernization and the deployment of direct air capture (DAC) to offset residual industrial and agricultural emissions. The report also addresses critical economic challenges, such as high public debt and currency depreciation, and recommends strengthening regional cooperation through the ASEAN Power Grid and the APAEC framework.

• Lao PDR's energy sector is heavily reliant on hydropower, which is vulnerable to climate variability, specifically drought-induced water shortages that threaten energy security and export revenues.
• Under the Net Zero Scenario, electricity generation capacity must grow significantly, reaching nearly 30 GW by 2030, compared to 18 GW in the Baseline Scenario, to support increased demand, hydrogen production, and direct air capture (DAC).
• The industrial sector is projected to become the largest energy consumer by 2050, surpassing transport, commercial, and residential sectors.
• Direct air capture (DAC) will play a critical role in the final years of the transition, accounting for almost 40% of final electricity demands across all sectors by 2050.
• To achieve net zero by 2050, Lao PDR must be capable of securely storing over 6 million tonnes of CO2 annually to offset residual emissions from industrial processes, waste, and transport.
• The residential sector requires a dramatic shift away from traditional biomass; the Net Zero Scenario targets universal access to clean cooking technologies by 2030.
• Road transport is expected to be the second-largest energy consumer, requiring a transition to electric vehicles (EVs), biofuels, and hydrogen to reduce emissions.
• Lao PDR faces severe macroeconomic constraints, including high external debt service (increasing from 27% to 43% of government revenue) and high inflation, which average 25.3% in 2024, limiting the fiscal space for clean energy investments.
• The country's economic stability is heavily dependent on China, which was the largest trading partner in 2022, with exports of raw materials valued at USD 2.73 billion and imports of machinery and electronics at USD 2.1 billion.
• Regional cooperation via the ASEAN Power Grid and the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) is essential for diversifying the energy mix and securing economic resilience.

APA

Stockholm Environment Institute (n.d.). An Energy Sector Roadmap to Net zero Emissions for Lao PDR. https://leap.sei.org/documents/ACCEPTIILao2025.pdf

Chicago

Stockholm Environment Institute. An Energy Sector Roadmap to Net zero Emissions for Lao PDR. n.d. https://leap.sei.org/documents/ACCEPTIILao2025.pdf.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=An Energy Sector Roadmap to Net zero Emissions for Lao PDR |url=https://leap.sei.org/documents/ACCEPTIILao2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitutendenergy, author = {{Stockholm Environment Institute}}, title = {{An Energy Sector Roadmap to Net zero Emissions for Lao PDR}}, institution = {Stockholm Environment Institute}, url = {https://leap.sei.org/documents/ACCEPTIILao2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }