Residents of Mongolian cities have an extremely high per-capita use of heating fuel due to the combination of the harsh winter climate, heating system inefficiencies, inadequate metering and tariff structures, and poor building insulation. Until recently, energy efficiency had never been a priority. As a result of the large amount of coal being burned, Mongolian cities are among the most polluted in the world.

Prospects for easier living conditions and economic opportunities are attracting more than 10,000 newcomers annually to Ulaanbaatar. This trend is forecast to continue at least until 2030. Residents of these areas, usually living in non-engineered detached houses or in Ger (felt tents), lack basic infrastructure compared to residents of apartment blocks. Adequate roads, central heating, home water supply, and sewage systems are non-existent. Electricity is provided with limited power capacity, and water is provided through public kiosks. In 2019, 40% of the population in the Ger areas earned less than the national average, 100% earned less than the average of all households in the capital, and 38% of households lived below the national poverty line. Ger area dwellers spend more than 17.5% of their annual income on heating and pay seven times more per unit of heat for energy compared to people who live in apartments. Conditions in the Ger area are expected to worsen with an estimated 20% decrease in the average household income level due to the current COVID-19 economic crisis.

According to 2018 surveys, the energy consumption for a house in Ger areas of Ulaanbaatar accounts for 510 kWh/m2/yr, corresponding to a coal consumption for heating of 5 tonnes of coal per year, and 7.6 TeqCO2. Physiological thermal comfort remains low, at 17.4 °C on average.

Recognizing the need to tackle these issues, the Government of Mongolia has released and approved ambitious plans and strategies relating to greening the construction sector. The last development was an increased commitment under its updated Nationally Determined Contributions (NDCs 2019) to a 22.7% greenhouse gas emissions reduction by 2030, from an initial 14%, among which 0.8 g/t CO2 emission reduction is targeted from the construction sector. The Green Development Policy (2014) aims at reducing building heat losses by 40% by 2030 and increasing the share of expenditures for green development to 3% of the gross domestic product. For long, Ulaanbaatar had considered Ger areas temporary-only settlements and concentrated its efforts on promoting the construction of apartment blocks connected to the “trunk infrastructure” (heating, hot and cold water, sewage, and electricity). These policies have created a very dynamic market for higher-end estates but failed to provide enough lower-end housing options. Acknowledging this, Ulaanbaatar started considering improving living conditions in the Ger areas in its 2013 Masterplan 2020–2030. New initiatives and policies address this issue, but most remain promising pilots at best.

The most successful step so far for improving air quality is the raw coal ban implemented since May 2019. Since then, each household has been entitled to 6 bags of refined smokeless coal per week during the heating season, subsidised by 50% to 75%. This has already contributed to reducing the level of particulate matter PM2.5 in the city, but the air quality is not yet safe, and the more than 600,000 tonnes of refined coal briquettes burned in 2018 emitted about 1 million metric tons of CO2.

The Intervention “Switch-Off Air Pollution in Mongolia’s cities” is funded under the EU SWITCH-Asia Programme.