Bhutan, a small landlocked nation in South Asia with a population of 792,000 and a GDP per capita of $16,148 (2024), faces mounting challenges from transport-related air pollution despite its reputation for environmental conservation. While the country's annual average concentration of PM 2.5 decreased modestly from 31.2 micrograms per cubic meter in 2000 to 30.1 in 2023, this level remains significantly above the World Health Organization's air quality guideline of 5 micrograms per cubic meter and exceeds even the interim target of 25 micrograms per cubic meter. Although Bhutan's PM2.5 levels are below the South Asian regional average of 40.1, the health and economic implications of air pollution remain substantial for this lower-middle-income economy.

The human cost of air pollution in Bhutan is considerable. The World Bank estimates that 270 people died prematurely due to ambient PM 2.5 exposure in 2019, with McDuffie et al. (2021) attributing approximately 14 of these deaths directly to transport tailpipe emissions. The State of Global Air data indicate that transport and international shipping contributed approximately 5.4 percent and 0.0 percent to ambient PM2.5 concentrations, respectively, in 2019. More broadly, the annual cost of health damages from ambient and household PM 2.5 exposure reached $774 million in 2019—equivalent to 9 percent of GDP. This figure is particularly striking when compared to Bhutan's healthcare expenditure of just 4.4 percent of GDP in 2022, underscoring how air pollution imposes a hidden burden that exceeds formal health sector investments.

Bhutan's transport sector emissions have grown in tandem with economic development, though at rates generally lower than GDP growth. Since 2010, the country's GDP has expanded by 7.2 percent annually, while PM 2.5 emissions from transport grew by 4.1 percent per year between 2010 and 2022, up from 2.9 percent growth in the previous decade. By 2022, the transport sector accounted for 15 percent of total PM 2.5 emissions in Bhutan. The composition of transport emissions reveals an unexpected pattern: domestic navigation dominates with 70 percent of transport PM 2.5 emissions, while road transport contributes 29 percent, and domestic aviation accounts for just 1 percent. Rail transport is absent from Bhutan's transport matrix. Notably, the share of road transport in total transport PM 2.5 emissions declined from 43 percent in 2010 to 29 percent by 2022, while domestic navigation's share surged from 55 percent to 70 percent over the same period.

Within the road sector, the distribution of emissions reflects Bhutan's vehicle fleet characteristics. According to IIASA estimates for 2025, motorcycles contribute 44 percent of PM 2.5 emissions from road transport, light-duty vehicles account for 36 percent, heavy-duty vehicles represent 20 percent, and buses contribute negligibly. An increasingly significant component of road sector emissions comes from non-exhaust sources: by 2022, resuspended dust, brake wear, and tire wear contributed 32 percent of road sector PM 2.5 emissions, nearly doubling from 19 percent in 2010. This shift highlights how emission reduction strategies must address not only tailpipe emissions but also the physical wear of road infrastructure and vehicle components.

Beyond particulate matter, Bhutan's transport sector generates substantial emissions of other pollutants that affect both local air quality and contribute to broader environmental concerns. Nitrogen oxide (NOx) emissions from transport grew by 8.3 percent between 2000 and 2010, then decelerated to 1.8 percent annual growth between 2010 and 2022. By 2022, transport accounted for 32 percent of Bhutan's total NOx emissions, with road transport contributing 68 percent of the sector total, domestic navigation 28 percent, and domestic aviation 3 percent. In road transport, heavy-duty vehicles account for 62 percent of NOx emissions, followed by light-duty vehicles at 34 percent; motorcycles and buses each contribute 2 percent.

Sulfur oxide (SOx) emissions present a different pattern, with transport contributing only 4 percent of Bhutan's total SOx emissions by 2022. However, these emissions grew by 5.5 percent annually between 2010 and 2022, up from 0.9 percent in the previous decade. Domestic navigation accounts for 98 percent of transport SOx emissions, with domestic aviation contributing 2 percent and road transport essentially negligible. Black carbon (BC) emissions from transport grew by 3.4 percent between 2000 and 2010, then slowed to 2.3 percent growth through 2022. Domestic navigation accounts for 56 percent of transport BC emissions, while road transport contributes 43 percent and domestic aviation 1 percent. Additional pollutants including methane (CH4, growing 2.8 percent annually since 2010) and non-methane volatile organic compounds (NMVOC, growing 4.1 percent annually) remain predominantly road-sector emissions at 97 percent and 78 percent, respectively.

The transport sector in Bhutan remains almost entirely dependent on fossil fuels, with road transport accounting for 100 percent of energy consumption in 2023. Oil products constituted 100 percent of transport energy consumption, unchanged from 2010 and 2015, while biofuels and electricity contributed virtually nothing to the transport energy mix. This near-total reliance on petroleum products creates both environmental and fiscal vulnerabilities. Fossil fuel subsidies impose additional external costs equivalent to 25 percent of their value through increased local air pollution. Meanwhile, fuel tax revenues account for approximately 5 percent of total government revenue, posing a fiscal challenge as the country transitions to electric mobility.

The nascent but growing electric vehicle market in Bhutan offers a pathway toward cleaner transport, though progress remains limited. Between 2017 and 2024, electric vehicle imports reached $16 million, representing 12 percent of total road vehicle imports by 2024. The composition of these imports skews heavily toward light-duty vehicles at 86 percent, with goods vehicles and buses at 12 percent and two-wheelers at just 2 percent. However, the United Nations Environment Programme's E-mobility Readiness Index gives Bhutan a score of 65 out of 100, with technology and market scoring 10, policy at 15, energy infrastructure at 24, and financial instruments at 16. These scores suggest significant structural barriers to rapid electrification. Complicating matters further is Bhutan's rising motorization rate, which reached 171 vehicles per thousand population in 2024, up from 119 in 2000, though still below the Asia-Pacific average of 317.

EV in freight

EV mandates/ procurement

Vehicle restrictions (import, age, access, sale, taxation)

CIESIN. (2023). SDG Indicator 11.2.1: Urban Access to Public Transport, 2023 Release: Sustainable Development Goal Indicators (SDGI). https://sedac.ciesin.columbia.edu/data/set/sdgi-11-2-1-urban-access-public-transport-2023

EDGAR. (2025). GHG emissions of all world countries: 2025. Publications Office. https://data.europa.eu/doi/10.2760/9816914

Ember. (2024). Electricity Data Explorer [Dataset]. https://ember-energy.org/data/electricity-data-explorer

European Commission. (2024). Global Air Pollutant Emissions EDGAR v8.1 [Dataset]. https://edgar.jrc.ec.europa.eu/dataset_ap61#sources

IEA. (n.d.). Fossil Fuel Subsidies – Topics. IEA. Retrieved October 31, 2024 https://www.iea.org/topics/fossil-fuel-subsidies

IHME. (2026). GBD Compare. https://vizhub.healthdata.org/gbd-compare/

IIASA. (2025). GAINS Model Online—Greenhouse Gas—Air Pollution Interactions and Synergies. https://gains.iiasa.ac.at/models/

IRJ. (2024). IRJPro [Dataset].

ITDP. (2024). The Atlas of Sustainable City Transport. https://atlas.itdp.org/

Noll, B., Schmidt, T. S., & Egli, F. (2026). The electric vehicle transition and vanishing fuel tax revenues. Nature Sustainability, 1–5. https://doi.org/10.1038/s41893-025-01721-7

State of Global Air. (2025). Air Quality: Population Weighted Concentration [Dataset]. https://www.stateofglobalair.org/data/#/air/table

Trademap. (2025). Trade Map. Trade Map. https://www.trademap.org/Index.aspx

UN DESA. (2025). 2024 Revision of World Population Prospects. https://population.un.org/wpp/

UN Energy Statistics. (2025). Energy Balance Visualization [Dataset]. https://unstats.un.org/unsd/energystats/dataPortal/

UNEP. (2024). E-Mobility Readiness Index. https://ndcpartnership.org/knowledge-portal/climate-toolbox/e-mobility-readiness-index

World Bank. (2022). The Global Health Cost of PM2.5 Air Pollution: A Case for Action Beyond 2021. The World Bank. https://doi.org/10.1596/978-1-4648-1816-5

World Bank. (2024). Current health expenditure (% of GDP). https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS

World Bank. (2025). GDP per capita, PPP (current international $) [Dataset]. https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD