Sri Lanka Transport and Climate Profile 2026

Outline

SRI LANKA

TRANSPORT AND CLIMATE PROFILE

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Background

Sri Lanka, a lower-middle-income nation with 23.1 million people and a GDP (PPP) of $342.6 billion in 2024, is at a critical point in developing its transport sector. In 2024, transportation activities emitted 10.5 million tonnes of greenhouse gases, making up around 28% of the country's total economy-wide emissions. Before the Paris Agreement, transport-related emissions grew at an annual rate of 3.9%, but this has slowed to 1.2% since then. Although progress has been made, the sector is still mainly reliant on road transport, which produces 98% of all transport emissions, while rail and domestic navigation together only contribute a small 1% each.

Data on emission intensity reveals a positive decoupling trend; the carbon intensity of Sri Lanka's GDP improved significantly from 63.3 gCO2e per USD in 2000 to 30.7 gCO2e in 2024. Despite this progress, Sri Lanka's intensity remains higher than the Asia-Pacific average (29.0) and significantly above the South Asian subregional average (20.9). This disparity underscores a systemic reliance on carbon-intensive mobility, further evidenced by the fact that 100% of transport energy consumption remains tethered to oil products, with biofuels and electricity maintaining a <1% share as of 2023.

The energy profile of Sri Lankan transport reflects a persistent dependence on fossil fuels, with total consumption reaching 101,875 terajoules in 2023. Although energy intensity per GDP has declined from 0.86 MJ/USD in 2000 to 0.32 MJ/USD in 2023, it remains notably higher than the South Asian average of 0.16 MJ/USD. This inefficiency is compounded by the external costs of fossil fuel subsidies, which, despite falling from USD 1.1 billion (2010-2015) to USD 794 million (2016-2023), continue to burden society through road crashes (89% of external costs), congestion (6%), and road damage (5%).

Structural challenges are worsened by fiscal policies and infrastructure weaknesses. From 2016 to 2023, transport-related fossil fuel subsidies totaled $794 million, down from $1.1 billion in the previous five years. These subsidies still cause substantial external costs, with 89% of social costs linked to road crashes. Additionally, Sri Lanka's transport system is highly vulnerable to climate-related hazards. Since 2000, 78 natural disasters—mainly flooding (68%) and storms (21%)—have caused damages exceeding $5.6 billion. With a National Road Vulnerability ranking of 38th globally, the country faces annual transport infrastructure damages of approximately $24.1 million. Under a 4.5°C warming scenario, over 63% of road and rail infrastructure would be susceptible to extreme rainfall, and 3% of the population in low-elevation coastal zones remains vulnerable to sea-level rise.

The motorization rate has climbed to 345 vehicles per thousand population, surpassing the Asia-Pacific average of 317. The vehicle fleet is characterized by a high concentration of two-wheelers (53%) and three-wheelers (17%). While electric vehicle (EV) imports reached 116 million USD by 2024—constituting 46% of road vehicle import value—these are primarily light-duty vehicles (71%) and two-wheelers (27%). Crucially, zero-emission technology has yet to penetrate the public transport fleet; <1% of bus trade between 2017 and 2024 was electric. This lack of modernization is reflected in urban accessibility, where 63% of urban centers suffer from poor public transport access, with 80% of residents lacking convenient proximity to transit services.

To address these systemic issues, Sri Lanka has integrated climate targets into its latest policy frameworks, including the NDC 3.0 published in 2025. The country aims for carbon neutrality by 2050, with specific targets to reduce transport-related GHG emissions by 4.9 million tonnes (conditional) and 2.3 million tonnes (unconditional) between 2026 and 2035. Financing for this transition has seen a shift toward multi-sectoral investment; official development assistance (ODA) for transport rose to 2.3 billion USD between 2011 and 2023, while public-private partnerships (PPP) reached 1.3 billion USD, almost exclusively focused on ports. Despite having 17 relevant policy documents, only 27% of measures address climate adaptation, highlighting a significant gap in resilience planning compared to the 85% of measures focused on mitigation. Priority remains centered on road expansion, railway electrification, and modal shifts to balance economic mobility with environmental sustainability.

Sri Lanka's "Avoid" strategies aim to disconnect mobility from heavily carbon-dependent travel by using combined spatial planning and digital innovation. The country's National Transport Policy focuses on aligning land use with transport planning to fix spatial disparities, helping to cut down trip distances or travel frequency. This approach is supported by the Sustainable Sri Lanka 2030 Vision and Strategic Path, which requires all cities over 100,000 residents to develop transport plans that enhance walkability and manage traffic levels sustainably by 2025. Additionally, the Haritha Lanka Programme's National Action Plan encourages the adoption of ICT to replace physical passenger and freight transport. The Updated Nationally Determined Contributions - LKA also explicitly targets reducing travel needs through systemic measures efficiencies.

Shift: Sri Lanka is aggressively pursuing a modal shift by revitalizing its railway network and enhancing the quality of public bus services to recapture market share from private vehicles. The Sri Lanka NDC 3.0 targets an increase in the public transport share (bus and rail) from 35% in 2025 to 50% by 2035, supported by the Public Investment Program 2021, which prioritizes the expansion of railway tracks and the modernization of the Kelani Valley and Coastal lines. To facilitate this shift, the Updated Nationally Determined Contributions - LKA and the First Nationally Determined Contributions advocate for the implementation of Mass Rapid Transit (MRT) and Bus Rapid Transit (BRT) systems, alongside the expansion of "Park & Ride" facilities to five systems by 2030. Complementing these efforts, the Climate Prosperity Plan sets ambitious targets for non-motorized transport (NMT), aiming to have NMT account for 30% of all vehicle trips by 2035, supported by 26,000 km of dedicated infrastructure.

The "Improve" pillar emphasizes the swift transition to electric vehicles and strict enforcement of emission regulations. A key element is the 2018 Budget Speech, which set a goal for all vehicles in Sri Lanka to run on non-fossil fuels by 2040. This goal aligns with the Sri Lanka NDC 3.0, which includes converting 500,000 internal combustion engine (ICE) three-wheelers to electric by 2035. The Updated Nationally Determined Contributions - LKA proposes fiscal incentives for electric and hybrid vehicles, mandates Euro 4 emission standards, and enhances the Vehicle Emission Testing (VET) program. Moreover, the Sri Lanka National Hydrogen Roadmap examines advanced technologies like green hydrogen for heavy-duty trucks and long-distance buses. The National Action Plan for Haritha Lanka aims to improve fossil fuel quality and introduce biofuels, further reducing the sector's environmental impact.