Lemon grass is commercially valued for its oil, which is used in the cosmetic and pharmaceutical industries. There are two varieties of lemon grass - the East Indian Cymbopogon flexuosus and the West Indian Cymbopogon citratus. The one that grows naturally in Bhutan is the East Indian Lemon Grass. It occurs as ground vegetation on approximately 50,000 hectres in association with Chirpine Pinus roxburghii forest in the eastern region of Bhutan.

Lemon grass production is an enterprise that was launched nearly two and a half decades ago and has so far benefitted many rural people in Eastern Bhutan. However, like any other nature-based enterprise or for that matter evern enterprises that are not nature-based, it is critical that environmental sustainability considerations are taken into account in the development of the enterprise.

Lemon grass oil distillation has proven to be a lucrative enterprise for the rural people of Mongar, Lhuentse, Trashigang and Trashiyangtse Dzongkhags. Poverty Outcome Evaluation conducted by UNDP showed that cash income from lemon grass oil distillation is the highest among all livelihood activities. A study conducted by the Social Forestry Division (SFD) and Renewable Natural Resources Research Centre (RNRRC) Wengkhar revealed that among villagers involved in lemon grass oil production activity, lemon grass oil accounted for 30 percent of the income share while work share was only 12.3 percent.

While there are no doubt aboutthe considerable benefits that the lemon grass oil production has for many rural people in Mongar, Lhuentse, Trashigang and Trashiyangtse Dzongkhags, there are a number of environmental issues that need to be addressed without losing much time to sustain lemon grass oil production and continually benefit the rural communities over a long term. These issues pertain to

1. High fuelwood consumption;
2. Increased incidents of forest fires; and
3. Depletion of lemon grass resources.

The Lemon Grass Co-operative is an organized body of lemon grass distillers, operating in various geogs of the four dzongkhags and the co-operative is formed to sustain the industry which is one of the most significant cash income generating activities in Eastern Bhutan.

The objective of the project is to demonstrate the reduction of fuelwood consumption during lemon grass oil extraction by using an appropriate technology, thereby bringing about a positive impact to deforestation, land degradation and green house gas emission.