Cambodia
With a cumulative score of 1.73, Cambodia ranks number 22 among emerging markets and number 49 in the global ranking.
- Emerging markets
- Asia-Pacific
1.98 / 5
Power score
1.15 / 5
Transport score
Buildings score
Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.
Low-carbon strategy
Net-zero goal and strategy
Cambodia submitted a long-term strategy for carbon neutrality to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2021. This lays out the country’s plan to reach net-zero greenhouse gas emissions by 2050.
The pathway includes targets in the agriculture, forestry and land use, energy, transport, industrial and waste sectors. Together, these amount to a total emissions reduction of 156 million tons of CO2 equivalent (MtCO2e) in 2050 versus a business-as-usual scenario. The country is aiming for almost half of this emissions savings to come from reducing deforestation and expanding afforestation and reforestation activities.
Regarding energy, the strategy entails no new coal generation capacity installed beyond already committed projects, substituting coal in the industrial and power sector, switching to electricity for cooking, and investing in grid modernization, flexibility and storage. Cambodia is also aiming for 35% of its energy generation mix to come from renewables (including hydro) in 2050, of which 12% is expected to come from solar. However, this is not an ambitious target given that 49% of domestic generation in 2021 came from renewables.
The country’s transport goals are more challenging. They include public transport accounting for 30% of mobility in urban areas by 2050, and for electric vehicles to reach a 70% share for motorcycles and 40% for cars and urban buses. In addition, Cambodia is looking to increase the fuel efficiency of internal combustion engine (ICE) vehicles.
Nationally Determined Contributions (NDC)
Cambodia submitted an updated Nationally Determined Contribution (NDC) – a non-binding plan to achieve the goals set out in the Paris Agreement – to the UNFCCC in December 2020. The country aims to lower its greenhouse gas emissions by almost 42%, or 65MtCO2e, in 2030 versus a business-as-usual scenario. The largest part of this reduction, around 59%, is expected to come from the forestry and land use sector, with the energy sector accounting for 21% of the emissions savings.
Cambodia’s main objective is to alleviate poverty and become an upper-middle-income nation by 2030, so most of the decarbonization efforts in its NDC are conditional on international support.
Fossil fuel phase-out policy
Cambodia does not currently have a fossil fuel phase-out policy. The country’s carbon neutrality strategy involves a shift away from coal for power but does not pledge to end its use. Natural gas is also identified as a “dispatchable transition fuel”.
Power
Power policy
Cambodia lacks a long-term power development plan. It has directed investment in the power sector towards large hydro, coal-fired power plants, transmission and distribution to support growing electricity demand and enable energy access to almost 98% of villages in 2021. Non-hydro renewables investment has been slower to take off.
The country has a limited number of clean energy policies in place today, and there are no incentives like feed-in tariffs or net metering to support residential or commercial solar. In fact, current rooftop solar regulations disincentivize residential and commercial investment.
Power policies
Power prices and costs
Electricity Authority Cambodia (EAC), the state energy regulator, sets power retail prices nationwide. The average residential power price was $117.91 per megawatt-hour (MWh) in 2021, down 21% versus 2015.
Time-of-use tariffs are only available for medium- and high-voltage consumers who buy electricity from the national grid and do not have any grid-connected rooftop solar. The Ministry of Industry, Mines and Energy subsidizes electricity for certain types of consumers.
Power market
Cambodia’s power market is dominated by state-run utility Electricite du Cambodge (EDC). While almost all generation is owned by independent power producers, they can only sell their electricity via a special license to EDC, which has a monopoly over transmission in the country. Retail licenses are distributed by regulator EAC to EDC, as well as 469 small Rural Energy Enterprises (REE). This means each company enjoys a retail monopoly in the various fractions of different provinces.
Electricity tariffs in Cambodia are higher than neighboring countries Vietnam and Laos, although they dropped 22% between 2015 and 2020 (and have remained constant since) thanks to government efforts to make power more affordable. EDC and the government have therefore favored large power plants with low per-megawatt costs, such as hydro and coal, to support growing power demand. Energy imports also play an essential role in Cambodia’s power system.
Generation capacity has increased almost tenfold in the last 15 years, and in 2021 large hydro and coal-fired plants accounted for 85% of domestic power generation, Meanwhile, energy imports from neighboring countries met 30% of electricity demand.
The government’s ambitious electrification program has raised the share of households with access to electricity from 29% in 2012 to a reported 86% in 2021. However, the quality of electricity supply remains an issue in remote areas. The government aims for at least 70% of households in the country to be able to access grid-quality electricity by 2030. In remote areas of the country, electricity is supplied by hundreds of private operators that generate, deliver, and sell power.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Utility privatisation
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
Since both EDC and the REEs hold retail licenses that grant them a monopoly in specific areas, private entities rely on them to enter the market. Distribution licensees, including operators of mini-grids that are connected to the main grid, are under pressure from thin distribution margins because both selling and buying tariffs are regulated. This threatens the economic sustainability of their businesses.
Regarding rooftop solar, regulations introduced in 2018 limit the capacity that can be connected to the grid for medium- and high-voltage customers to half the capacity contracted to EDC, and also forbid commercial and industrial customers from using the time-of-use rate. This deeply damages the business case. In addition, the lack of standards for connecting low-voltage customers has forced many these consumers to go off-grid. They face the choice of either discarding their investment in a rooftop solar system or acquiring an accompanying battery, which makes for a significantly higher upfront cost.
It is very difficult to finance rooftop solar and storage installations for residential or small commercial customers in Cambodia. This is due to high interest rates and the cost and time involved in checking that the investors meet the financial requirements.
Currency of PPAs
Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel price distortions - Subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Fossil fuel price distortions - Taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?
Transport
EV market
The electric vehicle (EV) market in Cambodia is in the extremely early stages. There were 155 new EVs registered in the country from January to July 2022, up from 11 during the same period in 2021, according to Sun Chanthol, the minister for public works and transport.
EV policy
Cambodia does not have any legislated EV targets, but its long-term strategy for carbon neutrality includes a goal for 70% of motorbikes and 40% of cars and urban buses to be electric by 2050.
The only financial incentive that the country has implemented is lower import taxes on EVs, which are about 50% lower than the levy on internal combustion engine vehicles. The government reduced the special import duty for EVs from 30% to 10% last year.
In terms of charging infrastructure, Cambodia’s first EV charging point was installed in March 2022, supported by funds from the UN Development Programme. The government has set a target for at least 10 charging stations to be operational by the end of the year.
Transport policies
Fuel economy standards
Does the country have a fuel economy standard in place?
Buildings
Buildings market
The tropical climate of Cambodia means low-carbon heating has minimal relevance and stakeholders point to a lack of substantive policy or financial support to improve the energy efficiency of buildings.
Energy efficiency policy
Does the country have a national energy efficiency plan?
Energy efficiency policy
Are there minimum energy performance standards for buildings?
Energy efficiency incentives
Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?
Buildings policy
The tropical climate of Cambodia means low-carbon heating has minimal relevance and stakeholders point to a lack of substantive policy or financial support to improve the energy efficiency of buildings.
Buildings policies
Additional insights
from BNEF
Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.
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